Parental Bailouts
April 3rd, 2009 by Ken Kaye
Different kinds and degrees of debt demand different kinds of intervention. But let’s begin with the general question: Is it wise to bail our adult children out of trouble they got themselves into? Or should one let them bear the consequences, so they learn?
Unless this is a long-term chronic problem, grab your bailing bucket. Absolutely. The lessons taught by overwhelming debt aren’t taught any better by letting a bad crisis become hopeless. Debt isn’t like water standing three feet deep in a basement, which has ruined the books and games stored there but will eventually flow away again and leave the owner with some cleaning up to do. It’s a rising flood, threatening to carry off the whole house—literally. Left alone, it doesn’t go away, it just gets deeper.
Projecting the Impact of Debt
April 3rd, 2009 by Ken Kaye
Although Jack would like to renew the lease on his studio apartment, he is facing the fact that he is broke, and needs parental EMT: Emergency Money Treatment. He has an invitation to move into a cheaper one-bedroom apartment, sharing the rent with his younger brother. He already owes his parents $400. He owes his girlfriend, Anne, $600. He has a small monthly car payment and a moderate student loan payment, but the big problem his parents only just learned about is a growing MasterCard balance.
Attention Money Disorder
April 3rd, 2009 by Ken Kaye
A group of young people who often run into the kinds of difficulties we’re talking about are those with attention and impulsiveness problems. Such problems may be connected with specific learning disabilities (LD) that lead them to avoid thinking about financial subjects, such as analyzing their income versus expenses, or managing a bank account. It’s not that they aren’t capable of the simple math those tasks involve. It may be that the way numbers are displayed on a bill or bank statement distracts them with too much digital information competing for their attention. Or the problem might be one of impulse control. Or, poor test performance may have convinced them they’re “no good” at math.
What’s The Deal?
April 3rd, 2009 by Ken Kaye
“Trust me,” my younger son said–sincerely. Yet there were countless mishaps with money, related to disorganization and unreliability. The freelance web design job that was going to earn him $750 for ten hours’ work turned out to take sixty hours—and then weeks more before the clients finally paid. His optimistic rent check, mailed to a landlord in expectation of being able to beat it to the bank with a promised payment from a client, bounced. Cell phone and internet were cancelled at various times for nonpayment, leaving him—unless rescued hastily by his mother or myself—without a way for prospective clients to reach him. Time and again, we found reasons to keep the wolf from his door—usually extracting nominal assurances that he’d learned a valuable lesson. Our son’s “trust me” had long since acquired the opposite meaning to us: a red flag.
MBAs in Denial
April 3rd, 2009 by Ken Kaye
I overheard two young men in the locker room. One said, “I’m going to have to get my limit raised on my VISA.”
