Welcome To The Bank Of The Baby Boomer Parent

Are you the bank of baby boomer parent?

Slicing into the inheritance - “give while living” - seems to be the done thing these days. But, how do we know what the future holds for baby boomers as they approach their business peak if the money they have saved is going to pay the way for their adult children?

Lorraine Pirihi, a specialist baby boomer coach, asks “How can we possibly know how much we will need to live a comfortable life in the future? These are all the questions that should be running over in our heads before digging into the wallet/purse. We know ourselves business is unpredictable, and so is life,” she said.

“As parents we want to ensure our kids do not suffer or miss out. As parents we want our children to avoid hardship and prosper. But, sometimes in life, hardship is one of the driving mechanisms to a better and more fruitful future.”

Whether it is staying at home rent free to save money for a deposit on a house to borrowing when out of cash – children can treat baby boomer parents as an easy option – an endless flow of money instilling no sense of responsibility or work ethic. 

Lorraine said it is only natural, as a parent, to want to help financially. “But now days, there are so many demands financially to help our children, starting with university,” she said.

“Once children leave high school, many flock to university to get an undergraduate degree followed by a year or two traveling the world. Then comes the master’s degree – finally followed by a low-paid internship or job ... or they may not get the job they really want.

“Then, if we look at the harsh lending requirements and increased rents, it is difficult to move into the “buying a house” market. Other ways in which we help financially is the buying of groceries, first car, new clothes, paying the deposit for rented accommodation – the list is endless. But is it all necessary? What problems are we potentially creating?”

Being the easy option for our children puts baby boomers’ future financial security at risk, without even knowing it at the time. This, in turn, can put strain on relationships too. It can also cause rifts and jealousy between siblings and also set a precedence. What child one receives, child two, three or four will expect the same treatment, leaving the bank balance looking unhealthy but also, most importantly, it will not teach your children how to be self-sufficient.

Lorraine said “Think of it this way -  the more baby boomers give away, the less we have for ourselves when it matters. And, although every parent on this planet will see right by their child, it is about finding the right balance and the fine line between helping out when it is needed and not just when its expected or because their friends have one.

For those baby boomers in business, financially providing for adult children can have a significant impact on their business.

Lorraine said this is especially so if the man is the sole provider.  “Remember we are dealing with a different generation, with different values towards family responsibility. Also when you are in your 50s and 60s, you are starting to think about winding down – how do you do that if you know you have to support your adult children?” she said.

“So many baby boomers I work with are tired, worn out and over it – their health is suffering and there is a grudging resentment towards everyone. They feel they have spent all their life providing and now they have to keep going.

“The opportunity to finally do something for themselves is lost.”

So what does this mean for our kids?

Lorraine said if baby boomer parents keep giving, it teaches their children bad money management. “It makes them dependant on you which will have a knock on effect in later life. They will not learn how to be self-sufficient, how to look after themselves or how to stand on their own two feet, or the real art of a great work ethic,” she said.

“How will they know what hard work really is if mum and dad keeping digging deep into the pockets? We have created a Peter Pan generation – young adults who know they have a fall back. Now that does not mean all baby boomer children are like this but in my work coaching baby boomers in business, it is a real concern.

“Whatever the reasoning behind us helping our children, prolonged support is squeezing, even the most affluent baby boomers. They are feeling the pinch.”

www.relaunchyour life.com.au