Are parents partial to one child over the other? This question led to a long and heated debate among friends recently. Parents try their best, said those that wanted the argument to end. But the number of instances of partiality that surfaced was staggering.
We might have travelled some distance from the traditional favouritism towards male children in Indian homes. Paternalistic authority is quite alive even in many educated urban homes but women thankfully have increasingly bigger roles to play. What are the personal finance aspects that modern parents must take care of, so they are protected from the accusation of partiality?
First, consider the explicit and unfortunate differences between your children and negotiate with them to help them understand why differential treatment may be justified. A child with a disability or handicap needs more attention; a child with a disadvantage to pursue opportunities for growth might need support; a child that faced unfortunate life events might need different treatments and so on. Siblings resent these differences as kids but grow up to understand why it is so. Keep an open conversation that helps everyone understand the differences and accept them, even if gradually.
Second, as they grow older, the differences between otherwise normal children are even more visible. The bonding as siblings may be strong or weak, but the differences in their successes academically, financially and in life itself might be stark. Make sure that you do not allow the merits of their personal situations to impact your decisions with respect to finances. Spending for one’s education over the other; enabling one’s business over the other; and so on. They should know that they have equal access to the parental funds and support in their upbringing and that their merit or lack of it would not make it different.
Third, do not allow your biases to modify how you spend or support a child. Some parents tend to favour children who live their parents’ dreams. They like compliance and the satisfaction it provides. Others favour the lazier and wayward child over the other justifying it as based on need. Children recognize what is unfair and unjust. Parents are emotional about successes and failures of their children and their biases can sometimes be implicit. They are unaware of their behaviour but the others see and perceive it.
How to make the best use of inheritance money
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The risk profile, preferences, needs and attitudes towards money differ significantly across generations. If the elderly like to keep the capital protected and earn an interest income, even if it is modest, the younger generation that inherits it will have enough time on hand to seek growth out of that money. They may be able to take risks to make it appreciate in value.
A large …….