It’s not just the cute little family money traditions like allowance or graduation gift cards that you pass along to kids. Sadly, lots of the bad financial behavior modeled by parents can set kids up for a lifetime of money issues. One that’s fairly common was called “financial incest” and then toned down to “financial enmeshment” by psychologist and financial planner Brad Klontz. The icky name may describe it best, but even the gentler term identifies problematic actions parents may not even realize are bad. The sooner you reign in this bad behavior, the more likely your kids can avoid bad outcomes from compulsive gambling to poor decision-making skills. But before you can do better, you need to understand the psychology behind financial enmeshing:
Why financial incest is as awful as it sounds
If you grew up witnessing a dysfunctional marriage, enmeshment behaviors may not even seem that odd. What does it look like? The same way a father might ask a child to pass the potatoes at dinner when the mother is sitting right in front of the bowl, enmeshed parents may ask kids to pass messages about finances. This can happen in intact families or become the norm right before a bitter divorce. It can carry through after the two households have split, too. Adults without appropriate boundaries may also simply share too much financial information with their offspring. A parent may be oblivious when he does this. Or the parent may be trying to make herself feel better or trying to explain to a child why life is going to suck moving forward. (“I didn’t pay our bills and now they’re going to sell our house right out from under us.”)
Regardless of the thinking behind the action, it’s self-indulgent on the parent’s part, according to Klontz. “You’re basically using your child as a therapist,” he told HuffPost. “You’re going to probably feel better because you just got it off your chest, but it’s the wrong audience. And what you’ve done is created a terrible mess for those children who are going to feel anxious and insecure.”
How enmeshment plays out in adulthood
Just the same as a kid will repeat the one curse word you said in three hours of conversation, children are very likely to imitate their parent’s bad financial behaviors. But continuing the cycle is only part of the problem these TMI-type behaviors create. A 2012 study showed that college students who witnessed parental arguments about money tended to carry more credit card debt, for example. The missing boundaries and parent-child role reversal can also keep a child from developing coping skills or a sense of individuality. According to Kansas State University researchers, “without these skills, children may internalize or externalize problems and concerns, leading to higher levels of depression, anxiety, or aggressiveness.” Indecision, particularly about careers, is also a lifelong legacy from financial enmeshment. Children raised in a financially enmeshed environment also have difficulty distinguishing their net worth from their value as a human being.
As far as the strictly financial repercussions, there are plenty of those, too. According to Klontz and Britt’s 2012 study, kids raised by parents with these negative financial behaviors are more likely to be compulsive gamblers, hoarders and workaholics as adults.
If you can see that you’re already on the path to inflicting enmeshment and all its woes on your kids, that’s an important first step. To move from recognition to establishing proper boundaries may require counseling, though. But if you’re in the early days of parenting, it’s easier to prevent financial enmeshing. First, learn all you can about what information is appropriate for different age kids. And make it your mission to reassure your children when life gets tough. “You have to make them feel secure and not transfer your anxiety and fear onto them,” Klontz told HuffPost. Just succinctly and believably let your child know that financial difficulties are yours to worry about, and yours to handle. Practice makes perfect here. And remember, any steps you take will benefit all your family’s future generations.