When Financial Help Hurts

I’ve spoken to several parents recently who have found themselves in financial difficulty for what seems like the very best of reasons.

Their adult children are struggling and they desperately want to help.

Maybe it’s an overdue mortgage payment, a credit card bill, a car that needs replacing or simply everyday living costs.

I get it. As parents, our instinct to step in can be incredibly strong, particularly when grandchildren are involved.

And I’m not suggesting we should never financially help our adult children.

But perhaps the question isn't, “How can I help?”

It's “What kind of help would be best?”

Because they’re not always the same.

When helping becomes rescuing

Now before I get lots of nasty comments about the current economic situation, I want to make it clear that financial difficulty isn't always caused by poor money management.

Redundancy, illness, relationship breakdown and rising living costs can put enormous pressure on families.

Sometimes one unexpected bill becomes another. Then there isn’t enough for Christmas, the car breaks down or the credit card needs paying again.

But when the Financial Conduct Authority's Financial Lives research found that one in ten UK adults had no cash savings, while another one in five had less than £1,000 available for an emergency, the question needs to be asked:

Is this purely due to external circumstances, or is there lack of financial skills?

Often it's a mixture of both.

Imagine your daughter has a £2,000 credit card balance she cannot pay.

If the debt happened because she lost her job, helping may be exactly the right thing to do.

But if she regularly spends more than she earns, paying off the card removes today's anxiety without changing what created it.

Six months later, you could be having the same conversation.

So before stepping in, ask whether this is an unexpected crisis or a repeating pattern.

They need very different kinds of help.

Our role as parents needs to change

When our children are young, we're providers. But as they mature, our role needs to move towards that of a cheerleader, mentor or coach.

That might mean resisting the urge to immediately fix things and instead asking, “What have you thought about doing?”

Perhaps they can cancel some expenses, sell something they no longer need, speak to a debt adviser or take on some extra work.

Finding their own solution builds something handing over money can't, the belief that “ I can do difficult things.”

And that's important because managing money isn't only about knowing what to do. It's about developing the confidence and capability to make decisions, solve problems and recover when things don't go according to plan.

Sometimes struggle teaches us something

This is probably the hardest bit.

We don't want the people we love to struggle, but it's important to remember that discomfort isn't the same as harm.

Maybe the expensive holiday doesn't happen this year and the family goes camping instead.

It's helpful for children to see that sometimes families can't have everything they want, and they can make decisions, change plans and recover.

That's a valuable money lesson.

Instead of learning “Someone will make the problem disappear when money gets difficult,” they can learn “Sometimes things are difficult, but we can work out what to do.”

But what happens when their discomfort becomes ours?

This is the bit I think we talk about far less.

Sometimes giving money isn't only about taking away our child's discomfort.

It's about taking away our own.

Because saying no might mean watching your daughter cry because she can't afford the holiday, her children have been looking forward to.

It might mean knowing your grandchildren won't have what their friends have

Your son might get angry with you, and you might lie awake wondering whether you're a terrible parent because you have savings in the bank while they're struggling.

Giving them the money makes all of those uncomfortable feelings disappear.

For a while.

So before giving, it can be helpful to ask yourself:

“Am I giving this money because it's genuinely the most helpful thing for them, or because I find it difficult to tolerate what happens if I don't?”

There's no judgement in that question.

It's simply about understanding whose discomfort you're trying to solve.

Money can change relationships too

Repeated financial help can quietly change the relationship between parents and their adult children.

If you're regularly contributing towards the mortgage, car, holidays or grandchildren's activities, it's very easy to start feeling that you should have some say in how money is being spent.

You might find yourself thinking, “Hang on, I gave you £1,000 last month and now you're going away for the weekend?”

Your adult child can then find themselves in the strange position of being grateful for your help while also resenting the influence that comes with it.

And if one sibling receives considerably more financial help than another, resentment can spread through the wider family too.

Nobody deliberately sets out to create this dynamic.

But money has a habit of bringing expectations with it.

Don't forget your own finances

Parents and grandparents can feel enormous responsibility to solve the problem, particularly when the thought creeps in:

“If I have the money and they're struggling, how can I possibly say no?”

But caring about someone's financial situation isn't the same as being responsible for fixing it.

If helping means dipping into your emergency savings, reducing your pension or compromising your future care, you may simply be moving the financial problem from one generation to another.

Before agreeing to anything, look at your own finances first.

Can you genuinely afford to give this money away?

And I mean give it away.

If you're calling it a loan but know deep down that you're unlikely to ask for it back, it's probably better to be honest with yourself about that from the beginning.

Caring doesn't always mean fixing

Watching your children struggle financially is one of the hardest transitions we make as parents.

Our adult children still need our love, encouragement and sometimes our financial help, but they also need opportunities to make decisions, experience consequences and discover that they can navigate difficult situations themselves.

In my opinion, the world our grandchildren will grow up in will have more uncertainty in it than any previous generation has faced. The need to grow our adult children and grandchildren's awareness and ability to handle uncertainty has never been so great.

So perhaps the question isn't simply, “How can I make this problem go away?”

But “How can I help them become stronger financially tomorrow?”

Sometimes caring means giving.

Sometimes it means practical help.

Could you sit down together and look through their bills?

Could you help them find free debt advice? (See references)

Could you provide childcare for a few months while they increase their working hours?

Or rather than repeatedly clearing debt, perhaps you could offer to match what they save.

They save £50 towards an emergency fund and you add another £50. Now your money is helping them develop the habit of saving rather than simply removing the consequences of spending.

And sometimes the right thing absolutely will be to give them the money.

If you do, be clear about what you're offering. Is it a gift or a loan? Is this a one off or something you're prepared to do again?

Because clarity protects both of you.

Sometimes caring means giving.

Sometimes caring means helping.

And sometimes caring means having enough faith in the person you love to say:

“I believe you can work this out, and I'll help you while you do.”

What to do next?

Carolyn Whitehouse is a Money Psychologist helping business owners create financially healthy businesses and happy families.

If you've enjoyed this blog, please pass it on to someone else who might benefit and connect with Carolyn on Linkedin and Instagram

(The author appreciates that families from collectivist cultures may have different values around money, family responsibility and caring for adult children)

Sources and further reading

Financial Conduct Authority, Financial Lives 2024 Survey.

MoneyHelper, Money and Pensions Service.