She wanted some advice because her 28 year old daughter had asked for help to buy a property, but the amount being requested concerned her. She felt uncomfortable because she didn’t think she could afford this, and was worried about the long term impact on her own financial position.
I thought I had a pretty clear idea of the situation at this point, but what she told me next was completely unexpected.
It turns out her daughter was trying to buy a new property with her husband. Both she and the husband owned investment properties, but they didn’t want to sell them in order to buy their new home. Unfortunately they didn’t have enough equity in their existing properties, and their income wasn’t high enough to allow them to borrow all of the money they needed.
So they decided to hit up the ‘Mum Bank’.
They also had a trip to Europe planned for later in the year and that was completely out of the equation unless mum helped out.
I was absolutely flabbergasted that they could even consider asking for money. But I also felt sorry for her because she felt guilty that she hadn’t automatically handed over the cash to help them.
Their problem was not that they weren’t in a good financial position, but rather that it wasn’t good enough to allow them to do everything they wanted to be able to do.
They haven’t yet learned to prioritise and make trade-offs in order to get to a position that allows them to do the things that are important to them.
My concern for both her and them is that they are trying to overextend themselves, and also that despite being in a good financial position they are not yet independent.
I am sure the advice I gave her won’t please them because I told her not to give them any money at all, but hopefully it will give them a sense of reality and they might start to grow up.
What would you do if your children put you in this position?
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