Oct 17, 2024
Do children owe their parents for raising them? That’s the philosophical question Robert from Texas raised on a recent episode of The Ramsey Show.
He added that he put two kids through college and still pays for their phone bills even though they both earn six-figure salaries. Now, he wants them to assist with some of the debt he and his wife have incurred after a flood destroyed their two cars and damaged their home, and a fire destroyed their home. Robert was able to cash flow repairs to the home, and they purchased two new cars after the flood. His insurance was able to cover the losses from the fire.
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However, with economic pressures mounting, many Americans are leaning on members of their families for financial support.
Supporting elderly parents
Financially supporting your elderly parents isn’t unusual. Nearly 32% of middle-aged adults said they’re offering financial assistance to their elderly parents. In comparison, 42% said they expect to do so in the future, according to a 2020 American Association of Retired Persons (AARP) survey.
Meanwhile, 55% of Americans surveyed by Pew Research in 2023 said they have either a “great deal” or a “fair amount” of responsibility to provide financial assistance to an elderly parent in need.
Given the statistics, Robert’s expectation of financial assistance might not be unreasonable. However, 12% of adults surveyed by Pew said adults have little to no responsibility to assist their parents financially and Dave Ramsey is part of this cohort.
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Ramsey’s philosophy
Robert’s letter emphasized his children quoting Dave Ramsey when it comes to helping parents financially, “‘Well Dad, Dave Ramsey says, to allow you to sink or swim because your debt is your obligation. Are we wrong to ask them for help or are they interpreting your advice incorrectly?”
Ramsey admonished Robert for paying his adult children’s phone bills, and described his letter to the show as “dripping with disgusting entitlement.” He made it clear that if his children did not want to financially support him, they were under no obligation to do so, adding that children “are not in debt to you because you fed them”.
“That’s not how life works, buddy,” he told Robert. “Charity that is extracted through guilt is not charity. If your children want to be charitable towards you and give you something, that’s wonderful … But not because Mom and Dad think they’re entitled to their money.”
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Rachel Cruze, Ramsey’s co-host and daughter, had a more nuanced take. She said she believes the decision to assist your elderly parents depends on individual circumstances, family culture, relationships and maturity.
“There are so many elements of it that can go quickly one way or the other,” she said.
How to navigate this tricky situation
For those navigating a similar situation, author and financial expert Ramit Sethi offered his advice on his website.
He suggested that adults who are considering assisting their elderly parents should have an open and honest conversation to fully understand their financial situation. They should also ensure their finances are robust before offering help and set boundaries for their financial assistance so that their parents can use the cash boost to lower debt and make their financial situation sustainable over the long term.
Put simply, financial assistance should be empowering not enabling.
“Helping your parents get out of debt can be challenging, but it’s also a powerful opportunity to strengthen your relationship and secure a brighter financial future,” he said.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
Managing Money • 3h ago
