The Dangers of Financial Dependence

According to some, adulthood is the time to find one's own path and walk alone. But some parents and children find it really a strenuous job to break the financial ties that bind and the financial dependence continues well into traditional adulthood.


This is an unsafe path,troubled with many challenges, some of which aren’t obvious at first glance. If you are a parent with a dependent adult, or an adult who relies on financial support from your parents to get by, keep the following in mind:


It makes saving for retirement and long term care difficult for the parents.
 If someone is still spending a significant amount of money each month supporting an adult without investing for retirement, they have to remain in the workforce longer and would become a financial burden upon their children late in life.  As Investors are taking control of their retirement & Superannuation, Self Managed Super is becoming more & more influential.


It reduces the parents’ standard of living.
At a period when parents should be enjoying the fruits of after-retirement life, they are still saddled with a serious financial commitment which reduces their security and their quality of life in the present.


It creates a sense of entitlement in the relationship.
As time goes on, parents start to expect financial support from the children. Children begin to support financially and begin to live a lifestyle beyond their means. They begin to feel entitled to this support. It is a natural occurrence; any repeating event soon becomes an expected one in a person’s life, like watching 24 on Monday evenings.


The longer the relationship continues, the more emotionally devastating ending the tie becomes.
As the financial connection becomes constituted, it becomes more difficult for both to cut that tie. The parent is often consumed with unnecessary guilt when the thought occurs, while the child becomes more reliant on that financial support to sustain their lifestyle.


The key to settle such ties is to do it as early as possible. When a child is able to walk alone, let the child walk alone. It allows healthy relationship between parents and children who aren't  tied to a financial situation, reduces the impact of emotional damage, and allows the parents the financial freedom to plan for their future.