When Financial Incentives Aren’t a Big Enough Hook

Relationships and money can get complicated when emotions cloud financial decisions. To make the most of generational wealth, let the numbers do the talking.

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Q: I need some help for our family. My wife is so upset that our son, with his wife and our three little grandchildren, is planning to move to Alberta. They said they want to move because she has a sibling in the area and they want to get away from big city life. He’s our only child and we feel we’ll miss so much with our grandchildren so far away. We have talked to our son over the years about options to make living here more affordable, but it seems they don’t want our help. 

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A few years ago we gave them the opportunity to buy part of one of our rental properties. Sharing costs would have kept the mortgage payments within just our son’s income. They declined our offer because they wanted to buy an entire house on their own, rather than part of a home with us. We can understand that and helped them buy a townhome instead. Now with their family of five they are bursting at the seams. The other grandparents have offered to help too, going so far as to buy a large piece of land that can accommodate three separate living arrangements. Two of their three adult children were in agreement with moving there, which we supported as well, but our daughter-in-law changed her mind. We all want to help them now while they could use our help. Our son will inherit everything from us one day anyway, so we don’t understand their reluctance. Is there anything you can suggest? ~Walter & Emily

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A: Family relations can be complicated at the best of times, and things often only get worse when money is involved. Add in two sides of the family and your adult children are likely feeling pulled in every direction. When situations like this arise, communication is going to be key as you look to come to terms with the choices your son and his family are making. And they are not alone.

Many young families are facing extremely difficult circumstances these days. With the rising cost of living and economic changes impacting the real estate market, some have seen previously viable options for their future evaporate before their eyes. However, any significant family move will work out more successfully if it’s a move toward a brighter future, rather than away from a current circumstance.

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Motivations for moving

It is important for anyone who is contemplating a big move to carefully weigh their reasons for making the change. For your son and his family, it sounds like they might have several motivations for moving. In such cases, linking choices back to long term goals can help keep things in perspective for everyone. With that in mind, here are some things to consider:

City versus smaller town living

Many parents would like to escape the big city life and raise their kids in a more rural environment. But what does this idyllic notion mean in practice? Thoroughly researching towns before the move will help ensure that they will meet the anticipated needs.

Look into access to schools, employment opportunities, health care facilities, airports, shopping, recreation, and any other services you deem important. Routine transportation will impact lifestyle choices as well, such as whether it’s necessary to drive yourself/your children everywhere or if public transport is an option. It can help to spend holiday time in several towns before making a decision that will impact your lifestyle and finances for years to come.

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Alternatives to Make Home Ownership Happen

Achieving financial goals 

A big motivation for moving is likely financial, and it can help to speak with various professionals, such as a realtor, financial planner, accountant, non-profit credit counsellor to understand what impact your choices will have on your goals and future financial decisions. For instance, would selling a townhouse in a larger city allow you to buy the home you want in a smaller town? If you did that, would your debt level stay the same, or would selling leave you enough to pay off any debt you might have? If living costs are less in a smaller town, would that help you get your spending and budget under control? Contact a realtor in the town you’d like to move to for a more accurate look at their housing prices before pulling up your roots elsewhere.

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Why Messing Up Financially Might be Good for Your Adult Kids

Career and income decisions

Many financial decisions will come down to your income level, so moving to another province needs to include careful consideration of how your job will be impacted. Have you worked your way up in the industry or company where you work? Do you have some job security and is the benefits package adequate? Could you keep working for the same company or would you need to look for work in your new hometown? Call around and look at labour market information to determine what your income level would be if you made a move.

Also consider carefully if the family’s main breadwinner is happy with their current job. We spend a lot of our waking hours at work. Changing jobs without moving to a different province is stressful enough, the last thing you want to do is create unneeded stress and upheaval in your home.

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The 5 Most Important Things Young Adults Can Do for Their Finances

Estate and inheritance planning

While those considering the move are the ones who need to be asking themselves a lot of these questions, when there are close family members with some means to provide additional options, it makes for wise estate planning to consider all viable options sooner than later. Open and honest communication around what can be a sensitive topic is key so that hidden debt and costly lifestyle choices in any household don’t derail plans.

When parents are able to help their adult children, without jeopardizing their own future financial well-being, it paves the way for the younger generation to benefit from generational wealth much sooner. Receiving part of an inheritance during the years when they would most benefit from it allows adult children to launch themselves into the next stage financially. It gives them the freedom to really save for their future, set money aside for their children’s education, max out TFSAs, top up RRSPs, and not just scrimp and save when they can.

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Adult Kids on a Spending Spree? Why Not to Bail Them Out Financially

Maintaining family connections

It is every parent’s dream that their children grow up and do well for themselves on their own. And it’s only natural for kids to spread their wings and fly. During the family building years it’s easy for parents of the youngest generation to overlook how important it is for children to have connection to family or community members of various ages.

Life gets busy and it’s often not until we have gained insights that come with age and experience that we realize how vital it is that we connect with other generations. But those connections might not happen the way we had always envisioned. Understanding how to meet younger generations where they’re at is something the older generation must learn to balance if family divisions are to be avoided.

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The bottom line on paving the way for generational wealth

As you look to gain insight into the decisions of your family members, it can be easy to let your thoughts and emotions cloud your ability to listen with the goal of understanding, rather than reacting. And you can’t want something more than they do. When it comes to our adult children, choose which conversations to have just with them, and which need to involve their spouse or partner as well. Ultimately, they will live most intimately with the decisions they make, so good or bad, they are the ones who must make them.

Related reading:

Should Adult Kids Living at Home Pay Rent?

The Best Way to Handle Credit Card Debts and Repayment

Top 5 Money Principles Every Child Needs to Learn

Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email, check or call 1-888-527-8999. 

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