Financial Planning: The Art of Helping

Many parents feel responsible to help pay college expenses for their children, and may even tap limited retirement resources or cosign loans to fund these expectations.  However well-intentioned this may be, offering too much help can leave parents financially destabilized.  Students can also be limited in their development if less is required of them.  The American psychologist B.F. Skinner makes just this point when he states: “By giving too much help, we postpone the acquisition of effective behavior and perpetuate the need for help.”[1]  Overly generous parents may, in effect, inadvertently deprive students of significant learning experiences that are needed to help them acquire important financial management skills. 

In additional to any financial assistance they may offer, parents must also consider the role that they can play in helping their student to wisely assume responsibility for his/her own financial well-being.  One way to do this is to assume the role of a consultant.  An experienced consultant can help their client (son or daughter) identify goals, think about options and strategies, and guide them to reach their own conclusions about any best course of action.  They will do this without taking full responsibility for the student’s needs and concerns.  Progressively, as the student accepts greater responsibility, college can then serve as a time in which they will develop a working budget, establish good credit, and acquire financial management skills needed in their adult lives.

As you consider the role you can play, as a parent/consultant, the following ideas may prove helpful:

Share experiences –Give your student the benefit of your experience.  Sharing appropriate information about your experience with money management can help them develop a more realistic attitude about their financial circumstances.

Establish Parameters –Communicate clearly what part you can play, and be specific about the part for which they will be financially responsible.

Provide a Set Amount of Support –If you expect to provide some assistance, help your student learn how to live on a set amount of money for a period of time, similar to a regular paycheck.  If necessary, it is important to give your student the opportunity to struggle, a little, if they run out of money before the end of the month.

Reflect Real World Realities –Make your assistance conditional upon reasonable expectations and performance (subject to continuing adjustment and negotiation).  In some cases, it may be appropriate to base your support upon a minimum GPA, and minimum enrollment, or to draft an actual loan agreement if you lend funds.

We can help students to wisely assume responsibility for their own financial well-being as we carefully consider the impact our help may have upon their development, and offer support in ways that will foster greater independence and self-reliance.  As B.F. Skinner concludes:  “One has most effectively helped others when one can stop helping them altogether.”[2]

(parent as consultant concept contributed by my colleague, Cynthia Wong)

[1] Skinner, B.F., Century Psychology Series: Reflections on Behaviorism and Society, Prentice-Hall, Inc., Englewood Cliffs, NJ, 1978, pages 34, 35.

[2] Ibid