Financial discrimination between your children can be detrimental
Raising a child is a lifelong commitment that certified financial planner Sydney Sekese compares to the financial and emotional obligation of paying off a 20-year bond. Add one or more children to the mix and it’s easy to see how a parent can feel overwhelmed emotionally and financially.
Certified lifestyle financial planner Trudy Luthuli ofLuthuli Capital says: “The problem with feeling financially overwhelmed is when you find yourself using your finances to reward or punish you children, sometimes leading to financial discrimination among the children where one is seen benefiting more than the other.”
In an article on the types of prejudice children face at home, psychotherapist and founder of Mind Factory, Dr Vihan Sanyal, describes financial discrimination as the unjust treatment of children on the grounds of appearance, gender, aptitude, skills and family expectations.
“This behaviour is usually observed in parents who choose to focus on children who exhibit greater skills, aptitude and talent,” Sanyal says.
Nomfundo Nxumalo* recalls how growing up, she and her sister felt less loved by their mother who seemed to put all her emotional and financial energy into their younger brother.
“When we were kids, my sister and I would get an inexpensive gift for our birthday for example, but our brother would get whatever he wanted, which was usually the latest, most expensive toy or gadget. That carried on until adulthood where he received more help from our parents than we did, like our parents bought him his first car and apartment but we had to work for them ourselves,” Nxumalo recalls.
Viwe Dyasi, head of relationship banking at Standard Bank warns that at this point, children stop being equal in the eyes of the parents and siblings alike, causing a drift in relationships, sibling rivalry and even financial irresponsibility in their children’s financial future.
Nxumalo says it was only when her parents faced financial ruin and when she and her sister refused to bail their younger brother out of a bad situation that the family sought professional help to develop their personal financial boundaries without discriminating among each other.
Gerda van de Linde, executive director at the Institute of Behavioural Finance says children should start being prepared to stand on their own from a young age by getting them financially literate.
“Having regular open discussions with your children from a young age makes it easier to explain why a specific child’s needs may be met at a specific time and not another,” she explains.
Sometimes it happens that an adult can find themselves needing their parents’ assistance more than their siblings, as Ntobeko Shezi* discovered.
“It’s just my brother and I at home and our parents treated us pretty fairly most of our lives. But my brother took a wrong turn at varsity. I, on the other hand, always tried to make my parents proud but my brother always seemed to reap the benefits.” he says.
Sekese says it is important to know when to take a step back as a parent in these situations. He says you need to assess when a situation is an emergency needing immediate assistance or if it’s an opportunity for you to teach your adult child a financial lesson or two.
“If you had started early by, for example, rewarding your children with pocket money for completed chores, you can continue when they are young adults by requiring them to take care of some of their own living expenses,” he says.
David Thomson, certified financial planner and senior legal adviser at Sanlam Trust, says kick-starting an understanding of money in your children will help them appreciate what it can do for them from an early age.
“Aside from teaching them how to effectively balance their needs and wants it also teaches them to be more empathic to financial constraints you may face from time to time, making negotiating how family finances are spent an easier task,” he says.
Sekese argues that it is important to know when to take a step back as a parent in these situations and cut the financial cord. He explains that you need to assess when a situation is an emergency needing immediate assistance or if it’s an opportunity for you to teach your adult child a financial lesson or two.
“If you had started early, by for example, rewarding your children with pocket money for completed chores when they were younger, you can continue when they become young adults by requiring them to take care of some of their own living expenses,” he says.
Thomson insists that establishing parental boundaries and sticking to them is important when trying to be financially fair to all your children.
Van de Linde echoes Thomson’s views and reiterates that keeping the lines of communication open and clear with all your children will leave little room for your financial intentions as a parent to be misunderstood.
“For instance, if one child in matric is struggling with maths, the entire family needs to understand why we need to focus on those needs first before, say, another child’s need for the latest Xbox game.”
Dyasi encourages parents to have a last will and testament where a children’s trust is created for minor children in the event of your death. The trustees will then manage, invest and distribute the assets to the minor child according to the terms of the trust.
She says a will is important even if you have adult children. Should you die without leaving a will, legislation will determine how your assets will be distributed.
*Not their real names