While meeting with a Grant and Susan* a few weeks ago, we were reviewing their spending and one of the biggest items was the amount they were spending on their daughter’s rent. To be fair, their daughter was in second year university in a pandemic, but this rent payment was going to be a big component affecting when Grant and Susan could retire. So, I pointed out that she had a lot more time to pay down a debt gained during school than they had time to recover to fund their retirement.

As parents, guardians and grandparents, we often have this desire to support and help our children. We want them to be successful and are willing to go above and beyond to do so. But what if, the above and beyond, was setting you back and you didn’t even know it. Some parents have a desire to help their kids through school and beyond. Tuition, living expenses, help with grandkids, the lawyers for the divorce, the never going to fail business idea. This desire to help, if not made in the context of a complete financial plan, means that most parents do not actually know the implications on their finances. That it may push their retirement back for years or make retirement a very sparse time.

It feels like there has been a switch. Where we want to do everything for our kids and not let them do things on their own – accumulate debt and maybe fail at things. It is important to understand that this cycle of growing up, pursuing education, getting a job, starting a family, having their own kids and sending them off to college is a very common cycle. You went through this yourself.

The truth is, if you are going into debt, or into your savings to support your children financially, it is a lot harder for you to make that up – because your timeline to when you will retire is so much shorter than your kids.

If your child goes in debt to fund their education or other large purchases, they have a lot more time to get out of debt and save for their retirement. Not to mention, your kid will learn to be much more responsible (hopefully) with their finances when they understand the value of a dollar.

If you do really want to help them though, here is a list of other things you could do:

• Send them a care package
• Co-sign a student line of credit
• You can send treats, a book, maybe even a picture of a fun place from their childhood
• Prepare their favorite meal
• Stock their freezer with chili or shepherds pie and other easy to thaw and heat meals
• Help them prepare a realistic budget
• Offer to babysit

All being equal, maybe you can help out more monetarily, we are just encouraging you to make sure you understand any potential long-term effects on your situation and how always being available to help may be affecting your children’s resiliency.