Financial Enabling is Help That Actually Hurts

This is part two in CreditCards.com's five-part series about different money disorders (see our main article, " Is it time to consider financial therapy?" Although most people's financial issuers aren't serious enough to warrant classification, we all battle some unhealthy money attitudes, and these articles can help you spot and address your own weaknesses. Coming next week: financial dependence, those whose habits of relying on others for their lifestyle cripples their ability to make it on their own.

If you're repeatedly giving money to an adult child who is not learning from his mistakes, he may not be the only one with a problem. You probably have your own money disorder, financial therapists say, one called financial enabling.

Financial enablers are those who give money in a way that keeps the receiver from having to take responsibility or become independent. Most often, it's parents supporting their adult children. "Generally, parents like to think they're altruistic and doing what's best for their children, but it's really satisfying their own needs," says Gary Buffone, a psychologist and author of "Choking on the Silver Spoon: Keeping Your Kids Healthy, Wealthy and Wise in a Land of Plenty." "Research shows that the more financial support that parents provide, the less productive their kids become," says Buffone.

Financial therapists say financial enabling is among the most common money disorders, and the numbers seem to be growing. That's partly because many children of baby boomers are used to a middle-class lifestyle, but their starting salaries don't allow for that, so they turn to mom and dad for help. The recession has exacerbated the problem by making it even harder for young adults to find jobs.

While there's nothing wrong with offering a little assistance, enabling sends a message to the children that they're not capable of doing things on their own, psychologists say. As a result, the children of enablers typically lack ambition and purpose, and they are often diagnosed with a money disorder called financial dependence.

Here are some signs you may have crossed the line from generosity to enabling:

*You have given so much and so often that your loved one is no longer trying to make it on her own.

*You give money to others even though you can't afford it, or even though it harms your own financial stability. For example, you stopped contributing to your retirement fund or took out a home equity loan.

*You're buying your clothes at Walmart, but your grown child is buying $100 designer jeans with your money.

*You feel a sense of resentment or anger about giving the money, but don't know how to say "no."

Neil Ellington with CESI Debt Solutions, a nonprofit credit counseling agency, said he had one client in his 70s who had everything going for him. "He had his pension and his Social Security, his car was paid off and his house was paid off, so we couldn't figure out how he was in debt," Ellington said. "We eventually learned that he had eight family members -- all grown -- living in his home, and he was pretty much supporting all of them."

Like a lot of elderly people, Ellington says, the man still viewed his children as children, rather than as grown adults. "He had a lot of fear about where they would go and what would happen to them if he stopped."

Guilt, fear as motivating factorsFear isn't the only emotion that turns people into enablers, experts say. Some feel guilt or shame for not being a better parent over the years, and they're unconsciously trying to make up for those mistakes with money. Others want to give their kids a lifestyle that they never had themselves. And a lot of parents believe "if they say no, they won't have the relationship with the child," says Eileen Gallo, a Los Angeles psychotherapist and co-author of "The Financially Intelligent Parent."

Therapy can help financial enablers work through the bigger issues that are making it difficult for them to say no. "The real struggle for parents is to face their own intolerance of pain for their kids," says Kenneth Settel, a psychiatrist, psychoanalyst and a consultant to executives in the Boston area. "This desire to protect is deeply held. They have to learn that what they think is a kind of protection is actually disabling of their kids."

Therapists also recommend the following small steps:

*Hold a budget summit. Sometimes receivers have no idea of the sacrifices you're making to give them so much. So ask them to sit at the table with you the next time you're budgeting, and get their thoughts on what you should cut.

*Set a time limit. Create a plan to gradually reduce your support over three to six months, and share it with the receiver. When the cutoff time comes, don't waver. Therapists who have walked clients though this type of weaning say no child has ever ended up homeless.

*Think about whether each gift will help or hurt. The next time you're asked for money for something, decide if it will make the receiver more independent or more dependent. "Things like education, therapy, medical insurance and career counseling move them toward independence, so go ahead and say yes," Gallo says. "But bailing out their credit card debt or giving them money to go on a trip is not helping."

• Get them career help. Career counseling and vocational training can help lost young adults find their way and find a job. "I've suggested vocational training to three different families," Gallo says, "and it's worked really well. The children are either already independent or heading in that direction." Marveta Mason of Gastonia, N.C., said she and her husband always paid for everything for their daughter, Courtnee, because "we just didn't want her to go without." But after Courtnee graduated from college, she didn't get a job and kept buying expensive clothes and jewelry with her parents' money. Mason and her husband got so fed up that they nominated Courtnee for a 2010 VH1 reality TV show called "You're Cut Off," which featured spoiled women whose families were ready to cut the financial cord. Courtnee was selected, and she and eight other women had to go through a rehabilitation program and change their ways in order to be taken back by their families. Today, Courtnee, 26, has a part-time job, and she's paying for a lot of her own expenses. "The show helped her, but it helped me, too," Mason says. "It used to be that when I was out shopping, I'd see something and I'd say, 'That would look great on Courtnee. I've got to buy it.' Now I've realized, 'OK, this has got to stop.'"
• More from CreditCards.com:
•   10 expenses to cut to help pay off credit card debt You found someone's debit card. Do you pick it up? 5 credit card urban legends and why we fall for them
• 10 expenses to cut to help pay off credit card debt
• You found someone's debit card. Do you pick it up?
• 5 credit card urban legends and why we fall for them