How to Handle Inter-Generational Financial Obligations

Preparing for Family Financial Responsibilities Across the Generations

WESTPORT, Conn.–(BUSINESS WIRE)–The MetLife Mature Market Institute has released a series of planning tips, Preparing for Family Financial Responsibilities Across the Generations, to help Americans navigate family financial relationships. A follow-up to the organization’s recent study, Multi-Generational Views on Family Financial Obligations, the document, available for download online, helps people determine how their sense of responsibility or desire to help children or parents translates into action. Can you or should you help your children or grandchildren financially? When do you stop supporting an adult child? Do your parents need financial assistance?

“We’ve prepared these tips to help people prioritize their family responsibilities and to learn how to meet them,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “In our study, we determined that people provide financial assistance to family members out of a combination of love and need. There is agreement that parents should support children through their college years, help with tuition (90%) and step in to provide financial assistance during an emergency – not of the child’s doing. But, they stop short at paying all college tuition costs if they’re particularly high. There is also a consensus against bailing adult children out of debt when the debt is from overspending.”

“How do individuals determine when to help others and when to allow them to be independent? We found that people must examine their own financial status and make decisions about how to assist their family members based on their ability to do so, the real needs of their parents and children and a look down the road at how each party will be able to deal with change and unexpected pitfalls,” said Timmermann.

Among the tips listed in the publications are the following:
– Begin with an understanding of where you are in your life. Knowing your own assets, income, existing debt and obligations for the future will help you determine if you’re in a position to help others.
– Start with taking care of your own needs first. It is helpful to pay down debt and secure your retirement income before endeavoring to provide assistance to family members.
– Reassess as you go along. Changes occur; be sure to continue to monitor your own financial picture.
– Don’t just give more…give for. If you decide you can give, do so with a stated goal or objective, especially those that are practical.
– Make your legacy a family conversation, not a family secret! Open communication among the generations goes a long way toward avoiding feelings of suspicion, anxiety and resentment.

Click here to download a copy of Preparing for Family Financial Responsibilities Across the Generations or visit The full study, Multi-Generational Views on Family Financial Obligations, is also available for download online.