Changing attitudes have left some parents at odds with their adult children about money, but Baby Boomers are being told: If you don’t like how your kids handle their finances, you probably have yourself to blame.
Baby Boomers themselves are becoming more confident about splashing out – sometimes on the back of years of capital gains.
An Australian study has found almost one-fifth of Baby Boomers were travelling using their kids’ inheritance.
But financial adviser Liz Koh said that was probably because travel had become so much cheaper, not because Baby Boomers were less worried about leaving money to their kids.
“For as long as I have been in financial planning, which is about 17 years, most people have had the aim of leaving the kids the house and whatever is left of their retirement capital after they have used it to enjoy their retirement,” Koh said.
“Air fares are so much cheaper now – I was reading on the weekend that Flight Centre were promoting return flights to London for $1099. At those prices it is very hard to resist.”
David Boyle, group manager of investor education at the Commission for Financial Capability, said changing attitudes to money had left some parents in dispute with their adult children.
“In my day, as children, we physically got money,” he said. “We usually worked for it, doing chores around the home or in a part-time job. We got an envelope with some money in it and we had to put that money in the bank.”
He said that was a foreign idea to younger generations, who now had much more access to readily-available cash, whenever they needed it.
“When I was young, if you really wanted something, a bike or whatever, you had to save up for it yourself. You had to wait. Families didn’t have credit cards, they didn’t have access to personal loans. Access to credit has changed behaviour and the timing of when you get stuff. “
He said it was harder for some people to determine between “needs” and “wants” because it was so easy to take out a loan to get the things they wanted. “There is a lot of replacing being done, not because things are broken but because they want the next thing. It’s a lot different.”
But he said before parents jumped on their kids for being bad with money, they needed to consider how they discussed it as their children were growing up.
“There is probably not enough talk in the family home.
“That’s what I would try to encourage rather than trying to meet all their needs, as parents you want to do more for your children but that environment [where you get them what they want] and the easy access to credit has diluted the value of money. You don’t have to work as hard to get it. Don’t get me wrong, you still have to pay it back but it’s a lot easier to get.”
Parents should try to talk to their kids about the value of the money they were spending, and help them see the time and effort that went into earning it, he said.
“The people who make me grumpy are the ones who complain kids don’t value anything but they’re the ones who created that environment in the first place.”