“Parents rarely let go of their children, so children let go of them. 
They move on. They move away. 
The moments that used to define them are covered by 
moments of their own accomplishments. 

It is not until much later, that 
children understand; 
their stories and all their accomplishments, sit atop the stories 
of their mothers and fathers, stones upon stones, 
beneath the water of their lives.”

― Paul Coelho

Dear parents,

As parents, you will probably be disheartened by the following post of a university student published online in Chinese just over a month ago.

“I am utterly disappointed in my parents who are both senior staff in their companies, but end up being ‘poor’ parents. We used to take family trips to Europe when I was young, and my parents drove a Porsche that they bought for $800,000. Together they now make about $2.5 million a year, but we had been renting until they finally decided to buy a three-bedroom apartment for $11 million three years ago. To my dismay, they have little left in their savings account and still owe the bank a few million dollars for the mortgage. Now in their fifties, they say they can’t afford sending me overseas for vet school and are expecting me to give them $20,000 a month to help repay the mortgage after I graduate from university as they have spent a lot of money to provide the best environment for my upbringing.  But I indeed have no clue they have managed their money so poorly.  Why didn’t they buy a flat earlier?  Why did they overspend on luxury items and now expect me to repay?”

Are the demands of the parents legitimate?  Should parents expect their children to provide for them?  Have they been wrong to overspend to provide the best environment for their child?  Is the child being ‘selfish’ when he whines that the parents should have managed their money better and not expect him to repay?

“Raising children so that they can provide for you when you are old” is a traditional Chinese notion that has slowly gone because it is simply unattainable.  In most of the surveys among teenagers, more than half of them take parental support of their university education for granted but expect their parents to be financially independent when they are retired. Most grown-up children prefer to move away after they have got married, but many expect their parents to help take care of the grandkids.  As you can imagine, given the high cost of living, many of these couples may struggle to provide for their own family and the two families of origin.  Different from previous generations, many adults now in their thirties or forties have no or only one sibling, making it even harder for them to shoulder the financial burden if their parents are financially dependent on them after retirement.

Ideally, both the retired parents and grown-up children are financially independent but maintain a close emotional link so that they can take care of the physical and emotional needs of one another.   Of course this is easier said than done, and takes a lot of discipline and planning.

First, you should aim to be ‘good enough’ rather than ‘extravagant’ parents.  While striving to provide a good environment for your children’s growth, you mustn’t smother them to an extent that they misunderstand that your financial resources are unlimited, thereby lacking the motivation to be financially independent.  If the family finance is tight, you needn’t send your child to costly overseas exchange tours.  Unless the child has exceptional talent and passion in a particular musical instrument, it may not be worth taking lessons from first-rate musicians who charge hefty tuition fees.  All in all, don’t spend more than you can afford and expect your children to repay you when they are grown.  Manage your finances so that you don’t have to put additional burden on them in the future.

As for your children, they must learn to manage their finances. They will learn not to overspend if you don’t.  They will learn to save and delay their gratification if you tell them to save their pocket money to buy a high-priced toy. 

In my view, wealth management should be made a compulsory subject at school but I don’t see that happening in the near future.  To avoid the predicament faced by the university student described earlier, we must strive to be ‘money smart’ parents.