In the United Arab Emirates, most of the parents support their adult children financially.
According to the HSBC report issued in 2017, UAE tops in the list of countries where parents support their adult children financially.
UAE has the highest proportion of the population where parents are still supporting grown-up children.
In UAE it is very common that parents support children even in adulthood. All parents want their children to stand on their own feet financially.
Providing financial support to an adult child comes at a cost. Here we provide you a list of actions that you need to take, which will help you to be prepared to face the future.
Catch them young
Parents should teach their children the value of money. The perception of children towards money can be greatly enhanced with good financial habits.
- Give your child piggy bank and ask them to save money.
- Open savings accounts and ask them to see how money grows with interest.
- Give your child money and ask them to manage little household expenses.
- Make children understand the importance of money by asking them to invest in a savings account.
- Share your money management experiences with your children.
- Talk about the financial plans you have made for their future.
- Tell them how you saved your income to make any big purchase.
- Tell them about the financial mistakes you have made and the lessons you have learned.
- Answer your child’s questions on money, it helps them to develop financial knowledge.
Financial lessons from an early age will help children to use money effectively. Remember the age-old saying ‘It is easier to curve a sapling than a tree’.
Identify your Priorities
Identify your priorities in life as old age is the factor you cannot avoid. Give importance to your goals as you should have already planned for retirement life.
Discuss with your children and have a financial plan that addresses you and your family’s needs. Keep your discussion focused on the future and ask them
- If they have debt, what are the plans to pay off?
- Convince them to take education loans.
- Agree for partial funding of fees
- Convince them to work and study
- Ask children to make a contribution from their savings
Identify your own priorities and discuss with your children and make them understand your priorities and work with coordination.
Make an action plan
Involve your children in your planning. Guide them to take the right steps which are for mutual benefit. You can take steps such as
- Consult a financial professional who can align your future goals
- Set up a budget with your contributions
- Pay off any high-interest loans and any pending loans before you take an education loan
- Savings and investment money can be a great help. Ask your children to plan early for their savings and effectively use them.
Help them during setbacks
Adult children are unwilling to talk about money needs during their financial crisis. Support your children during difficult times.
Your support to adult children could be critical in overcoming financial difficulties. Sometimes a word of help can be a support. Being involved with your children will make them comfortable about their future.
Be sensitive to adult children as they are reluctant to have money conversations. Listen to your children and encourage them to have conversations.
Many problems can be solved with mutual understanding and conversations.
Take away
Parent’s love for their children cannot be measured with money but the goals of life are associated with money.
Money is a sensitive subject and getting your adult children on the financial right track is the greatest gift you can give them.
Everything begins with a conversation and happens only with mutual understanding. Talk to your adult children, express your opinions and provide your financial support.