Why ‘the bank of Mum and Dad’ isn’t helping anyone

A recent Daily Life article discusses the trend for parents to continue to give money to their offspring well into adulthood.

(You can read the full Daily Life article here)

From the article:


However, the ‘bank of Mum and Dad’ is no solution. Firstly, not everyone can afford to help out their children. Let’s not forget that both generations weathered the global recession of 2007 and with it redundancies, restricted borrowing and comparatively low interest rates for savings. Financial planner Claire Mackay agrees: “The big questions that clients have are ‘do I have enough money to retire?’ and ‘how can I help my children?’ But, there’s no point in helping your kids to the detriment of your own financial security – especially if by providing support, in a few years’ time you’re going to need your children to [help] you.”

Secondly – from someone who was routinely well-dressed and overdrawn three years into my first job – hand-outs don’t tend to foster good behaviour patterns.

“If adult children get into financial difficulty because they’re in debt or can’t support their lifestyle, then bailing them out isn’t a gift, it’s prolonging the issue,” says Mackay. “Every parent wants to give their child a better life than the one they had, but the best gift you can give your children is the knowledge of sound financial planning.”


(You can read the full Daily Life article here)


Claire Mackay LLB LLM BCom CA CFP CTA

I am a financial planner, SMSF expert and company director. I thrive on providing independent, expert financial advice to my wonderful clients. I was recognised as Financial Planner of the Year 2015 and Investment Adviser of the Year 2014.

To contact me, speak to my team on 02 8084 0453. Please feel free to connect with me on LinkedIn or on Twitter. You can also visit my personal website.

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About Quantum Financial

Quantum Financial is Australia's most awarded financial planning practice. We advise a select group of successful professionals, business owners and jet setting retirees. Our website is here

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