The allowance trap - MoneySense

The allowance trap

Adult kids love their $25,000 a year — until they find out strings are attached.


At first glance, Sandra Reynolds, 33, appears to be a successful, independent woman. When she graduated from university a decade ago, she got a job right away, and quickly worked her way up to the executive team.

But the reality for Reynolds (her name has been changed to protect her privacy) is that her company belongs to her father, and he controls much of her life, both in and outside of the office. In fact, in order for Reynolds to get paid, she has to go to Friday night dinner at dad’s house, where he hands over her paycheque. If she doesn’t go, she doesn’t get paid. “My dad has always used money to control me,” Reynolds told Gary Buffone, psychologist and author of Choking on the Silver Spoon. “I’ve thought about getting a job with another company but that scares me. What if I fail?”

It’s not uncommon for parents to try to control their adult children through money — especially in wealthy families. Often it starts with a generous cash gift that comes with strings attached. “I see dozens of insecure, demanding parents who live vicariously through their children,” says Buffone. “They’re also the ones who put stipulations on their children’s inheritances and don’t release the money unless their kids do what they say — even after death.”

The child, however, is often just as much to blame. “They’re often prepared to sell out, and take on a standard of living that’s dependent on kissing mom or dad’s you-know-what,” says psychotherapist Eileen Gallo. “That’s never good.”

The situation can harm children by keeping them from developing the skills they need to meet their own needs. Plus, it can lead to resentment as kids abandon their own desires and dreams to please their parents.

What should you do if you think that your parents are using money to influence your behaviour? First, make a plan to become financially independent as soon as possible. If your parents offer financial help, have an open discussion about their expectations and weigh the decision carefully. If you’re not comfortable with the conditions, politely but firmly decline the offer. “Clarity and firmness are the only two things that ultimately make your parent-child relationship strong,” says therapist Elaine Cole. “The child has to take the lead. It’s the only thing that really works.”

That’s what Marie Foster found out. Her mother had given her $25,000 every year for several years with no strings attached, but two years ago, when Foster (her name has been changed) was house hunting, her mother changed her mind. “She told me that if I didn’t buy a home close to her, she would stop giving us the $25,000,” Foster told Gallo.

Foster knew that her mother just wanted to be closer to her grandkids, but ultimately she decided to buy the house that suited her own needs. “Mom was upset for a while, but then last year she started giving us the $25,000 gift again — no strings attached,” Foster says. “I think she realized that I could still have a close relationship with her and dad, even if we were an hour’s drive away. Now everything is fine again.”