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Financial Codependence

Financial Codependence

The goal is to be financially independent, right? By “independent,” we mean: not dependent on another person or another entity for our financial well-being.

When we are children, we are financially dependent on our parents. At 16, some teenagers will get jobs and achieve a degree of financial independence, although that is less and less common. Most children remain financially dependent through high school and into college, where parents are chipping in for tuition, room and board, and even living expenses.

It doesn’t end at graduation. Lots of young people are getting financial assistance from their parents well into their twenties and thirties, even after getting married and having children of their own. The adult children never achieve financial independence—they remain wholly reliant on their parents, well into adulthood. That’s unfortunate.

I will tell you a story. The main reason I went to the United States Coast Guard Academy for college is because it was free. And that mattered, because in my senior year of high school, my divorced mother told me point blank that she wasn’t going to pay for college (above and beyond in-state tuition for the University of Connecticut).

So, at age 17, I took matters into my own hands. I set myself on a path where I would never be financially dependent on another person again.

Yes, the service academies are free—but not really. The old joke about the Coast Guard Academy is that you get a $200,000 education shoved up your ass a nickel at a time. It was arduous. It was not fun. I went through a lot to get a free education. And I carried a resentment against my mom for years. But you know what?

It was the best thing for me.

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I have been successful. I am not stupidly rich, but rich enough to have outdoor speakers playing my favorite house music when I am out in the pool in the summer. That makes me feel rich. My success has been entirely my own success. Nobody had a part in it. It is an indescribable feeling, doing it all yourself, without any help. I take a lot of pride in it.

It wouldn’t feel as good if I had parents who were paying for everything along the way.

So the goal is to be financially independent. And that’s a good goal because of the feeling you get when you get there. It feels great to do it all yourself. Financial independence is true independence—you don’t owe anybody anything.

When You Owe Somebody Something

Things are different nowadays. You have a lot of parents who are deeply financially entwined with their children.

I see parents do this to their own detriment. They give money to their kids that they can’t afford to give, wrecking their own financial well-being in the process. You ask them why they do this, and I have heard the answer more times than I have seen Ocean’s Eleven. They say: “Well, my kids will be taking care of me when I get older.”

That isn’t financial independence. It is financial codependence. In this lifetime, you get one shot to be happy. If you are guilted or coerced into financially supporting your parents in retirement, then you missed your shot.

Codependent relationships are dysfunctional relationships. The term “codependent” comes from the world of addiction treatment. The Wikipedia definition is: “A dysfunctional helping relationship where one person supports or enables another person’s addiction, poor mental health, immaturity, irresponsibility, or underachievement.” 

It’s a system where nobody experiences the consequences of their own actions. If the child spends like an idiot, there are no consequences. If the parent spends like an idiot, there are no consequences.

I am a big fan of people experiencing the consequences of their actions. Otherwise, nobody ever learns.

So what is acceptable? Is it acceptable to pay for your kid’s college education?

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The answer is: only if you doing it unconditionally. And even then, not a great idea.

But I’m willing to entertain the thought that the world has changed and that children are not truly emancipated at 18 anymore—adulthood doesn’t arrive until age 22. Is it unfair to foist four years of a mountain of college debt upon a young person, when financial aid decisions are made based on the parents’ income and assets? It probably is.

Pay for college for your kids if you like. Tuition, room and board, books, but not living expenses. And your obligation ends there. If you’re cutting checks to your 28-year-old underachiever, it’s not just financial stupidity, it’s emotionally unhealthy.

The best gift you can give to your children is the ability to succeed on their own.

One Year On

This week last year, the very first issue of ETF 20/20 was published. At the time, I said the point of the newsletter was to help people become successful, long-term investors using ETFs… and to get rich in a slow, deliberate and sustainable way.

I’m happy to say we’re nailing that mandate. I believe that ETF 20/20 is hands down the best ETF portfolio service out there, and that it takes care of your core portfolio needs. To all the ETF 20/20 subscribers reading this—thank you for your support.

In many ways, the launch of ETF 20/20 was one step in what I’ve always wanted to do: help individual investors. The shift to personal finance in The 10th Man has been a second step. But I’m working on another big step right now, this one for those of you looking for a more active, aggressive service. The adventure continues. 

Some changes are coming—good changes. Stay tuned.


We welcome your comments. Please comply with our Community Rules.

Oct. 18, 2018, 5:42 p.m.

Jared,  Your article on codependence really hit home with me.  I, too, went to the USCGA, Class of 1964.  I was raised by my mother, but she also had three kids of which I was the oldest.  My mother could only afford to send one child to college and it had to be local.  I decided to be independent and went to the Academy which allowed my brother to take advantage of the funds from my mother.  It was indeed grueling, but talk about converting boys to men in a hurry, that it did!  I am forever grateful and am a strong financial donor to the USCGAAA.  Also, I subscribe to your ETF 20/20.  I love both, but have not yet stepped up to The Daily Dirtnap!  Semper Paratus!  Allen
Oct. 18, 2018, 2:49 p.m.

“The best gift you can give to your children is the ability to succeed on their own.”
This statement is the reason I paid for all of my two kids college expenses.  Being in debt at the starting block of your adult life does them no good. Both also knew that they were on their own in year five.

Jim Johnson 34645
Oct. 18, 2018, 10:58 a.m.

Here!  Here!  Bravo!!  “Starvation is a great incentive” is what I tell my congress-lady.  Not sure if it has soaked in.  I did not get a football scholarship to MU so I joined the Army 3 days after turning 18.  Worked (often 40 hours a week) and used GI bill for BA and payed as I went for MA.  I am retired and today I am not rich, but owe “nobody nutin.”  It still feels weird not paying a mortgage (taxes and insurance balance out that void).  Just had solar installed and am looking forward to much reduced electrical bill.  We always tried to stash the equivocal of a car payment.  Only purchased 3 new cars in my life and 15 years ago had enough saved up to pay cash for the Town Car (looks and runs fine).  (dog loves the leather seats)  There are lots of ways to do it, but one can get ahead using ones head and some frugality. 

jack goldman
Oct. 18, 2018, 9:41 a.m.

My fear is the computer credits and debt notes make me co dependent on humanity. I have to worry if those legally counterfeited debt note computer credits will be worth ANYTHING at all when I need help. It’s all codependent because I have to hope, in faith based computer credits, that are not printed into oblivion. The US public debt is raging at trillions of dollars, computer credits, and could collapse. This is why I have 10% of my net worth in gold and silver, a claim on the past, as money insurance. We are in uncharted waters when the central bank can repress interest rates to ZERO for ten years. I was not in stocks and was cheated in my retirement fund as many pensions have been cheated with low to zero interest rates. We are all codependent, always, unless we have gold and silver and real wealth in real things. I do enjoy your articles. I like how you think. Thanks for the advice.

Rick Julien
Oct. 18, 2018, 9:27 a.m.

Have really enjoyed your responsible and thoughtful “personal financial” series that helps people think about being responsible and achieving Financial Independence - you are spot on 100% correct in your “advice.”
Had a little conflict going on (Vietnam) and no money my senor year in HS…. my recently divorced mother had no money either so I enlisted in Navy nuclear power program against her wishes - I was good in math/science thing I ever did for my mom and myself.
Parents need to raise children to think beyond themselves and be thankful for their blessings and to be a greater blessing to others (they learn to be and are independent and their parents can be independent in their retirement years)

Jared, the one addition I would make to your independence 10th Man is we all need to be thankful to God for the opportunities He put in our path toward Independence and helping others (i.e., as you are doing with you writings listening to outside music speakers at your pool)
Keep up the Great work,

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