Unraveling the Web: Understanding Financial Enmeshment Bias and the Difference Between Helping and Enabling
As some of you may know, I have a love for Psychology. Learning how the brain works and why we do the things we do has always captivated me. It was even my major in college. While I knew it wasn’t necessarily a career I wanted for the rest of my life, I still find it fascinating 20+ years later. I love reading psychology articles and books. The mind is a wild place! The reason I’m mentioning this now is because I recently learned about a topic that’s not only pertinent to what I do for a living, but also to what I do as a mother. I’m talking about financial enmeshment bias.
Financial enmeshment bias occurs when the finances of parents and children are inappropriately commingled. This tends to happen most often with adult children. As parents, our natural inclination is to help our kids, but it’s crucial to understand the fine line between lending a hand and enabling dependency. I’ve been thinking about this more and more as my girls get older. Especially with Ella being so close to getting her driver’s license. If she can drive, how much should she pay for things like gas, insurance, and car payments and how much should I pay? I want her to learn to become independent, but I also want to help her because she works hard at school and cheer and doesn’t have a ton of free time to work a lot of hours.
While I have time to work on this with my teen, here are some examples of financial enmeshment with adult children - continually bailing out your child who is often finding himself/herself in financial trouble without addressing the root causes or encouraging responsible financial habits, neglecting to encourage adult children to develop financial independence, or funding your adult child’s lavish lifestyle.
Financial enmeshment can also occur when parents involve their young children in adult financial matters before the kids are cognitively and emotionally ready to cope with the information. Examples of this would include telling your child you can’t afford to get him braces because his father didn’t pay child support, making your kids answer your phone and function as intermediaries for debt collection calls, or gathering your kids around, sharing your fears and anxieties about money. It’s too much information for them and will only cause them to be anxious and feel insecure.
What are some of the consequences of financial enmeshment bias?
1. Stunted Financial Growth: Enabling your adult children may hinder their ability to develop crucial financial skills. They may become reliant on their parents, stunting their personal and financial growth. When financial responsibilities are constantly shouldered by parents, the motivation to learn and grow independently can be compromised. This can lead to a cycle of dependency that persists well into adulthood.
2. Strained Relationships: Unhealthy financial dynamics can strain the parent-child relationship. Resentment may build on both sides. Adult children may feel controlled or stifled, and parents may feel burdened by the ongoing financial support.
3. Retirement Challenges: This is one I have seen time and time again. Prioritizing your children’s financial needs over your own retirement poses a risk to your financial future. It's crucial to strike a balance between helping them and securing your financial well-being.
What are some ways to prevent financial enmeshment? The number one thing to do is to set boundaries. For young children, you have to think about their age and only share appropriate information with them. You need to emphasize it’s nothing they need to worry about and make sure they feel secure. For adult kids, you must clearly define the extent of your financial assistance and stick to it. Establishing boundaries will help both you and your adult children understand the limitations of the support provided.
You can also foster independence by encouraging your adult children to take responsibility for their own finances. Offer guidance and support but allow them to make decisions and face consequences. That’s the hardest part. No one wants to see their child fail, but sometimes it’s necessary in order to learn the lesson. You can also educate your kids on financial literacy. Help your adult children understand the importance of budgeting, saving, and investing for their future.
In navigating the delicate balance between helping and enabling, it's crucial to prioritize both your financial well-being and that of your adult children. Recognizing and addressing financial enmeshment bias can pave the way for healthier, more independent financial futures. Remember, a supportive hand is powerful, but an enabling grip may hinder the growth both you and your adult children need. If this blog hit home and you have concerns that you might be entangled in financial enmeshment with a family member, feel free to reach out to me at Jennifer.jenkins@bluestonewp.com.
