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5 basic principles to follow when giving adult children money

<p>The link between money and relationships is undeniable. Money issues can break couples apart, destroy relationships between siblings and cause tension between parents and adult children.</p> <p>Parents have an important role in ensuring their children are not only financially literate but are able to make sound financial decisions and act responsibly with their money.</p> <p>There is big difference between financial literacy and financial capability. This means parents have a continuing role to guide their children past childhood so they not only understand money concepts but know how to put them into practice as they face major decisions and events in their adult life.</p> <p>However, different attitudes towards money and expectations about parental responsibilities can cause serious issues for both parents and adult children.</p> <p>To what extent should parents interfere with or criticise their children's financial decisions and behaviour? Is it reasonable for adult children to expect financial assistance from their parents at times of need? At what point should parents expect their children to be self-sufficient?</p> <p>Every parent wants to see their children succeed but there are different philosophies about how best to help children get ahead in life. Some parents feel the best way to help their children is to give them a hand through gifts of money or interest-free loans. Others think it is only by children pulling themselves up by their own bootstraps that they will learn how to be successful. These deep philosophical differences can be problematic when one parent has a different view from the other and when children have expectations of parents which are not aligned with their parents' philosophy.</p> <p>Parents give money to their children because it makes them feel as though they are being better parents. It is good to give to others, especially your own family, but there are dangers involved. Giving too much or too often can lead to financial dependency, lack of responsibility, repeated poor financial behaviour, enablement of problem behaviours such as addictions or over-spending, delayed retirement or increased financial risk for parents, and resentment from siblings if one child is seen to be receiving more assistance than the others.</p> <p>There are some basic principles which will help decide how and when to support adult children:</p> <p><strong>Decide how much you can afford to give</strong></p> <p>Every financial decision has long-term consequences. The more you give to your children, the less you will have later on to pay off your mortgage or save for retirement. Make sure you are financially secure before helping others, or financial strife will simply transfer from them to you.</p> <p><strong>Set clear expectations</strong></p> <p>Have conversations with your children about what you are prepared to help them with and to what extent. If you are providing ongoing support, set a time limit for how long this will continue. Expect your children to make a contribution rather than giving them all of what they need.</p> <p><strong>Act like a banker</strong></p> <p>If your adult children went to the bank to borrow money they would need to fully disclose their assets, debts, income and expenses so the bank could decide whether to lend or not. You need to do the same. Make sure you understand why your children are in the situation they are in and what behaviours they need to change to avoid being in the same situation again. If you expect money to be repaid, you need to know how likely it is that this will happen.</p> <p><strong>Get legal advice for large sums</strong></p> <p>It may be necessary to have written loan agreements for large sums to avoid disputes later. If your adult child has a partner, you will need to consider what might happen to a loan or gift to your child in the event that the relationship ends as it may become relationship property.</p> <p><strong>Consider your other children</strong></p> <p>Be upfront with your other children about what help you are giving and why. Sibling rivalry is natural, and children can feel deeply hurt by being treated unequally unless they understand the reasons. Equality can be achieved in the long run by making adjustments to how your estate is divided, taking into account prior assistance.</p> <p>It is good to help your adult children but in many cases, teaching them how to make better financial choices is more beneficial than handing out money.</p> <p>Do you agree with this advice?</p> <p><em>Written by Liz Koh. Republished with permission of <a rel="noopener" href="http://www.stuff.co.nz/" target="_blank"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>.</em></p>

Retirement Income

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5 key principles to stay mentally healthy after 60

<p><strong><em><span style="text-decoration: underline;"><a href="http://www.drrosswalker.com/" target="_blank">Dr Ross Walker</a></span> is a leading integrative cardiologist, endocrinologist and author, specialising in the field of preventative cardiology.</em></strong></p> <p>The 60s and beyond – it is often during this period of our life that we are slightly winding down and for the lucky ones, heading into retirement. One of the issues here is the "use it or lose it" principle. We need to keep our brain active for the rest of our lives and there are five key principles in doing so:</p> <p><strong>1. Keep working or maintain an interest in your profession</strong></p> <p>If you are able to do so, working in your current profession is one of the best ways to keep your brain sharp and active. Although the work may be overly familiar by now, you are at least tricking your brain into different tasks.</p> <p><strong>2.Challenge your brain</strong></p> <p>You can do this through the use of techniques such as crosswords, pseudo Q, and brain training. People who are learning new language or are bilingual have a less chance of experiencing Alzheimer's disease as they age. If you’ve always wanted to learn a musical instrument, pick it up if you have the time once you have hit 60! Do adult training courses, and read challenging books. There are number of ways to keep the brain active and as the Nike commercial says-just do it!</p> <p><strong>3. Change</strong></p> <p>They say that death and taxes are the two guarantees in life, but another constant is change! Open yourself up to the idea of change. Try something different, do different things using other methods, travel to new and exciting places, discuss issues with people who have opposing views. Never be afraid to challenge yourself.</p> <p><strong>4. Interact and spend time with optimistic people</strong></p> <p>Surround yourself with friends, families, and loved ones. Even if you don’t feel like it, interacting with these people will keep you happy and content, and it gives your brain a break from its normal routine. Volunteering to help kids and animals is also a sure-fire way to surround yourself with positivity.</p> <p><strong>5. Be optimistic yourself</strong></p> <p>Getting older might be scary, but there is also something incredibly rewarding about this achievement. Not only does it give you more time to do the things that you love, it gives you the opportunity to spend more time with grandchildren or loved ones, and do something you never thought you’d see yourself doing – like taking up a new hobby.</p> <p>Is there a hobby that you have always wanted to try, but have never had time to take up until now? Let us know what it is in the comments below.</p> <p><strong>Related links:</strong></p> <p><a href="/health/body/2016/08/myths-of-modern-health/"><em><strong><span style="text-decoration: underline;">Debunking 5 myths of modern health</span></strong></em></a></p> <p><a href="/health/body/2016/06/4-ways-to-reduce-stress-on-your-heart/"><em><strong><span style="text-decoration: underline;">4 ways to reduce stress on your heart</span></strong></em></a></p> <p><a href="/health/body/2016/01/cardiologist-tips-for-better-heart-health/"><strong><em><span style="text-decoration: underline;">5 tips from a cardiologist for better heart health</span></em></strong></a></p>

Mind