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Financial Backbone Round Up and Uncommon Money News

November 2, 2010

Posted by Roshawn Watson under Uncategorized

12 Comments

By: Roshawn Watson

Although it may not be intuitively obvious, a financial backbone is important to your wealth. It is typically challenging to prosper or stay prosperous while everyone has their hands in your wallet. We are constantly under siege with every conceivable opportunity to spend money. Additionally, just because you have something doesn’t obligate you to heed to every one’s requests. It’s okay to say NO! No is not a bad word, is a complete sentence, and often requires no additional explanation. Otherwise, your friends, in-laws, marketers, store clerks, and grown children may all expect you to freely dole out economic support without respect for your feelings, budgets, or values.

Last week, I read an article by Kris from Everyday Tips and Thoughts (link below in Personal Finance) that I found quite disturbing. A prosperous couple were being asked to finance an extravagant wedding for their daughter and her fiance. The problem is such an elaborate event ran contrary to their values. They decided to write into Kiplinger for advice, and the Kiplinger authors suggested that they “offer to give the couple a one-time significant financial gift to start them off in their lives together” and let the children choose where they allocate the funds.

While I know this advice may seem innocuous, I personally found it very troubling for many reasons. First, it is money they have accumulated, and they have every right to refuse to underwrite something that they find objectionable or irresponsible. Second, it sends the wrong message to the grown children (the engaged couple) and the family. It says that financial boundaries do not matter. As long as we put enough pressure on them, they will bend. Personally, I think this is exactly the opposite of what they should be communicating. Clear boundaries prevent a lot of confusion later. At least, Knight Kiplinger and I agreed on this point: do not become their bank in the future. Third, I think a “forced” gift is not much of a gift at all and leads to regret and resentment. For example, it’s hard to maintain your respect when your “broke” child and her fiance are making decisions you find unwise. Trying to finance a platinum wedding when you don’t even have a permanent place to live, an emergency fund, paid for vehicles, etc. just makes you look stupid. Lastly, I feel if both these parents aren’t careful, they may rob their grown children of independence.This is a big deal for the young couple because it is probably the quickest and most likely way they can be in the same financial position as their parents. Not only is inheritance not guaranteed (i.e. multiple children, charities, taxes can all affect the size of an estate), but wealthy parents prefer providing financial support to their grandchildren more than to their wealth-oriented child and spouse (Dr. Stanley). Thus, unless they can come to an agreement with their family, I think that the best decision for them is to do something that they feel comfortable with, even if it makes them unpopular.

For more, see The Problem With Being Budget Minded Is Other People

Thought Questions: Why would (or wouldn’t) you support this extravagant wedding?

Now, it’s time to do the weekly Uncommon Money News and Yakezie Round Up.

Uncommon Money News and Yakezie Round Up

In preparing to write my posts, I often come across noteworthy and sometimes bizarre financial and business news. Below are links to some of these sites. Enjoy!

To my readers: I am so honored by your support. Together, we are telling thousands of the importance of financial literacy. I absolutely could not do it without you: you are vital! Thank you sincerely.

Personal Finance (Yakezie and other PF bloggers)
Would You Pay For An Extravagant Wedding? at Everyday Tips and Thoughts– Kris weighs in of the difficult money dilemma: do you violate your frugal values to appease a family.

Diversity Leads to Innovation at First Generation American – Sandy discusses the advantage of bring diversity into projects and the workplace.

Make More Money By Working Two Jobs at Money Reasons – Money Reasons discusses the advantages of having additional income sources. Diverse income is typically a very good thing.

What’s Wrong with This Picture at DIY Investing – Robert discusses how misleading advertising for investments can dupe most readers. In this example, he discusses the differences between total return and yield.

Business News
Six Monopolies That You Didn’t Know Ruled The World

Nokia Outsells Apple iPhone 2 to 1

Ford Rebounds with Record Profit – Auto giant adding 1,200 Michigan jobs

Economy
More are living off tax revenues, and fewer are providing them

US GDP: economists predict faster growth

Economics In One Lesson at Invest It Wisely – Kevin reviews Henry Hazlitt‘s insightful book from 1946, which eerily attempts to forewarn us of so many financial mistakes that we have recently made. Get free PDF here.

Entertainment Money News

Tiger’s $50 Million Bachelor Pad — Par for the Course

Vujacic proposed to Sharapova with quarter-million dollar ring

Carnivals

Carnival of Personal Finance at Consumerism Commentary – Toyota Millionaires vs Mercedes Millionaires
Festival of Frugality at Magical Penny– The Problem With Being Budget Minded Is Other People (Editor’s #1 Pick)
Carnival of Financial Planning at The Skilled Investor– Economists Blame ME for the Slow Recovery and Why Is Debt Really Decreasing?’ and 7 Surprising Facts About Millionaires

Round ups that linked to posts from this site

Kevin at Invest it Wisely – Weekend Reading- Halloween Edition
Mich at Beating The Index – Weekend Edition: Orange, Black, & Green Halloween
Kris at Everyday Tips and Thoughts – Trick or Treat and Reading…
Money Reasons – A Look Back

Side Note: Make Your Vote Count Today!

12 Responses to Financial Backbone Round Up and Uncommon Money News

everydaytipsandthougNovember 2, 2010 at 1:28 pm
watsonincNovember 2, 2010 at 2:29 pm

Yeah, that article certainly invoked a strong response. It always amazes me how many people have the nerve to insist what others should do with their private property.
First Gen AmericanNovember 2, 2010 at 3:43 pm

The fact that a kid would be demanding money would be a red flag that it should not be given freely. i'd love to help my kids when the time comes, but since it's my money, I would want a say as how it would be used.

I'd pay for a nice honeymoon before I spent on a big stupid wedding. Some people love big weddings but they're not for me, nor would I spend my money on them for anyone else..just like I won't buy cigarettes for a smoker.
My recent post What Babci Taught Me About Aging
Money ReasonsNovember 2, 2010 at 9:33 pm

Great point! In finance, it makes sense to go against the grain, or trend!

Say, reading your post enabled me to come up with my post for tomorrow 🙂

I'm make sure to reference you back like you did with Kris 🙂 Great idea!
My recent post Pros and Cons of Blogging
watsonincNovember 2, 2010 at 10:53 pm

Being different can certainly enhance your likelihood of achieving your financial goals because so many people make poor financial choices, which is undoubtedly your point.

I'm happy to have inspired a post and cannot wait to read it!
AdamNovember 3, 2010 at 1:43 pm

Happy to give you my Editor's pick -you have a great site here. No doubt see you around.
My recent post Festival of Frugality 254 Magical Penny’s Kraftwerk Edition
Invest It WiselyNovember 3, 2010 at 6:28 pm

I also enjoyed Kris' post, and I also found the scenario and the recommendations to be disturbing. A platinum wedding does not a happy couple make (perhaps it will make the other parents happy, but we shouldn't be concerned about that).

Thanks for mentioning my book review!

P.S. I checked out your links and I am also no friend of Monsanto!
watsonincNovember 3, 2010 at 11:20 pm

Thanks Adam! It's always great to here feedback. You have a very interesting and nice site as well.
watsonincNovember 3, 2010 at 11:22 pm
watsonincNovember 3, 2010 at 11:22 pm

Thanks for covering the book! I love that you are promoting financial literacy with discussing the debate and this book. Your efforts are much appreciated!

P.S. When I went Monsanto's headquarters, I truly appreciated just how big and powerful they really are!
My recent post Financial Backbone Round Up and Uncommon Money News
Smart MoneyNovember 30, 2010 at 6:11 am

Kids shouldn't be demanding money off their parents. If the kids were financially irresponsible then the parents should call them over one night and have a good chat about how to manage their money. The best option probably would be to provide the funds as a deposit for their house rather than paying for the wedding. Maybe stipulate that if they can save up for the wedding, then the parents will help contribute to the housing deposit.
My recent post Australias richest woman – Gina Rinehart
Nike DunkMarch 4, 2012 at 2:08 am

Hmm it looks like your website ate my first comment (it was super long) so I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog. I too am an aspiring blog blogger but I’m still new to everything. Do you have any tips and hints for first-time blog writers? I’d genuinely appreciate it.