How do I tell my parents to ditch their outdated money habits?
People like to whip out that nostalgic phrase “old-fashioned values” to praise the (better?) way things used to be. But when it comes to money behaviors, members of the older generation aren’t always right. Many people complain to me that dear old Mom and Dad’s outdated financial habits are driving them up the wall—and often hurting their parents’ bottom line.
A few examples I’ve heard people complain about:
- Paying too much for a financial advisor and/or managed funds. You may know that low-cost index funds are a cheaper and more sensible way to invest—with relatively low fees and returns that compete with and often exceed managed funds—but your parents have been throwing money away for years on the advice of “experts.”
- Cheap tipping. You dread the arrival of the bill when Mom or Dad takes you to lunch, knowing the waiter will be left only a couple bucks.
- Letting Dad manage the money. For certain generations, gendered purse-string holding is as common as apple cider in the fall. If you hear that old “let me ask your father” routine one more time, you’ll scream.
OK, you get my drift. Now, what should you do about it?
First of all, remember that, with few exceptions, your folks’ finances are their own business. Unless they have formally asked you to handle their money, or they’re hitting you up for seed money to start their own (less-than-promising) business, most of this stuff might bug you, but it usually isn’t going to make or break the family finances.
My first suggestion is at once the easiest and the hardest: Ignore it. If it makes Mom and Dad happy to pay Lisa the financial advisor a little too much to manage their investments, so be it. If your mother can’t buy a new dress without consulting your father, you won’t change this decades-old dynamic by haranguing her. And that meager gratuity? It’s annoying, but your dad is the one who bought you lunch, so the amount he tips the waiter is his business. If it really sticks in your craw, you can say, “Since you’re buying lunch, let me get the tip.”
But what about those habits that threaten to do real damage—to them and to you? Say their mounting debt has reached a crisis point. Or your mother really is completely in the dark about their finances, and you’re worried about what will happen if your father predeceases her. Then it really is time for a good old-fashioned family meeting.
Some of your parents’ habits might not be as ingrained as you think.
The key in any of these conversations is to remember that parents are used to doing all the talking when it comes to money matters. If you go in with a dossier of economic studies and a 10-point plan, you’ll likely be met with resistance—or evasion. True story: A friend once brought up assisted living with her mom and got this response: “You shouldn’t have bought that cheap mixer. I don’t know how you even make cookie batter with that piece of junk.”
Instead of lecturing, show you care. If you’re thinking about who will handle the bills when Dad passes away, you can be sure your mother is, too. Try something like: “It must be stressful not knowing what’s going on with the finances. Would it be better if Dad showed you the ropes in case you have to take over some day?”
Some of your parents’ habits might not be as ingrained as you think. They could simply be unaware of how much the financial world has changed. If your mom whips out her checkbook to pay for everything like a blackjack dealer slapping down cards, she may be thrilled if you show her that she can pay online through her bank. You might even help her set up online automatic payments for monthly bills. If Dad’s on the phone to his broker twice a week yelling “buy” and “sell” like he’s auditioning for Wall Street 3: Dad Is Good, it could be time to introduce him to Fidelity or another online discount brokerage firm, where he can do the deals himself. While you’re at it, send him an article about the merits of index funds. Maybe he’ll give Lisa the boot.
Finally, consider this: Some of that old-fashioned advice from your parents can be on point. My own parents instilled in me some bedrock values, like a solid work ethic and the importance of living within your means. Maybe your parents’ “don’t get a credit card” advice sounds crazy, because you could use all those sweet rewards points for this winter’s trip to Peru. But they don’t have any credit card debt, and you’ve been paying interest every month on a balance you can’t seem to pay off. That’s crazy like a fox. Maybe you could learn something from your parents’ old-fashioned financial ways after all.