Contributed by: Sandra Adams, CFP®
As parents, it's not uncommon for us to want to give our children more than we had when we were growing up. Whether that be more or better extra-curricular experiences, the camps our parents couldn't afford to send us to, the Florida senior trip with a friend, or the international summer travel experience or internship in college that we missed out on when we were young. Kids now seem to have so many opportunities that weren't available to us when we were growing up. Not only because they may not have been offered back then, but also because we're willing to help pay for them to give our children those experiences now — but at what cost?
As a financial planner, I work with clients annually to determine if their goals to give their children these valuable experiences fit within their ongoing cash flow and don't impact their long-term financial goals. As you can imagine, the real risk is trying to provide every opportunity to your children that you may have missed out on (and maybe even those that you still wish you could do yourself) and potentially compromising your financial future. And besides the financial aspect, you also risk having bad feelings towards your children without realizing it. When they're doing the things you always wished you could do, you may run out of time or money to do those things in your own retirement. As one client said to me in a meeting, "One day, I thought in my head – "Hey, step off my bucket list!"
There's always a fine line between what we do for our children now and what we save for our own financial futures later. Our job is to give our children a good education, our love, and a solid financial start to their future. Our next biggest job is to make sure that we've saved enough to support ourselves so that we don't have to rely on our children at any point in time. If we've done both of those things, we've done our jobs as parents. And, if we've provided some enjoyment for our children and saved some bucket list items for ourselves to enjoy — even better!
Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.
Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.