No family is immune to money conflicts, no matter how much they love each other. Here's what to look out for.
KEY TAKEAWAYS
- It's no wonder The Notorious B.I.G. once said blood and money don't mix — money is one of the most common sources of conflict within families.
- From poor communication between parents and children to bitter sibling rivalries, money can divide families in many ways.
- Here are some common ways money causes problems in families, as well as some expert-backed strategies to help ensure money never becomes a major issue between you and your loved ones.
by David Cotriss
If you don't want money issues to come between you and your family, it's important to prepare yourself for them ahead of time. We'll run through the primary ways money causes problems in families, along with strategies to ensure it never becomes an issue in your family.
Why money matters to families
You might think that something as seemingly shallow as money wouldn't affect you and your family. But you'd be surprised. Money can spark strong emotional reactions, especially when families are dealing with an abundance or shortage of money. And when you factor in the number of people in the family and consider potential conflicts of interest, it's no wonder it often causes division.
Healthy communication about money can stop resentments and misunderstandings from brewing below the surface. In cases where family members are reluctant to compromise or communicate, special care should be taken.
With that in mind, let's run through the main issues people encounter (inheritance, parenting, and aging relatives), before giving you some tips to avoid division.
Parenting
How and when to teach children about money is a common concern of parents, according to Cara Gardenswartz, PhD, a psychologist with Group Therapy LA.
Gardenswartz recommends giving young children a small but consistent allowance so they can learn the fundamentals of saving and spending on their own, with some light guidance from parents. Once children enter high-school ages, it's good to have them balance their budget, which will give them the skills to transition to budgeting in college.
"Give children a debit card and check usage, making sure spending is pre-approved and monitored," Gardenswartz says. "This builds trust between the parent and child regarding money, and children will be better off later in life due to this teaching."
It's important for parents to be mindful that problems can arise when one child is treated differently than the other, even if it's for good reason.
"Common drivers of tension are sibling rivalries," says Robert Selsor, a fiduciary litigator at Kirkland Woods & Martinsen. "A golden child might get more [money or financial support] in childhood, which can cause problems and lead to resentment later."
Healthy families understand that everything can be discussed, Gardenswartz notes, and that no topic, whether related to finance or not, needs to come with shame.
"Avoiding open discussion can lead to denial and other issues," she says.
Indeed, poor financial literacy can make a child more likely to rack up debt later in life. Or, they may simply become too entitled — 46% of parents say their kid has used their card without permission, after all.
Inheritance
Disputes and division related to inheritance is a tale almost as old as time itself, appearing as a common theme throughout the Bible and classic literature. In fact, 15% of siblings have argued about the fairness of inheritance.
When it comes to dividing money, or assets in a parent's estate, one sibling may feel they deserve more because they helped their parents more (e.g., giving up their job to care for them). Or they may feel that a particular sibling deserves less because they received more financial support from a parent earlier in life.
Giving everyone equal amounts of the inheritance is always a good idea.
"There's no such thing as deserving. Money should not be used as a reward or to demote someone," Gardenswartz says, adding that not giving equal amounts to everyone can cause resentments between family members.
Most families never discuss inheritance due to feeling uncomfortable or not wanting to think about it. A study from Ameriprise found that only 21% of parents planning to leave an inheritance told their children how much they would receive.
As a result, many are in for a nasty surprise: Most people who receive an inheritance get less than $100,000, even though about 75% of those people expected to get more. Sometimes, parents have financial difficulties or debts their children are unaware of, which affects how much parents can ultimately pass on...
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https://bigthink.com/sponsored/how-to-avoid-family-fights-money/
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