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It is the desire of every parent, to educate their children and to see them move on to become self-sufficient. With today’s challenging global economy, however, there is a huge increase in the number of grown ups having to depend on parents when the real world becomes too tough to cope with. Described as ‘the worst job market in a generation’, huge numbers of graduates face more economic uncertainty than their parents who were born at a time of relatively greater opportunity and promise.

A challenge of 21st century parenting is the sheer number of dependent adult graduates. The question is, have today’s parents raised a generation of spoiled young people who are unable to cope with the real world? Are we perpetuating the ‘Boomerang Generation’ phenomenon, which has seen parents welcoming adult children back home after university, paying off their debts, keeping their mobile phones funded, and paying all their bills? Or, is today’s world just so difficult that they are unable to make their way without our assistance?

What stage are your children at? Have they completed their education? Are they looking for jobs? Have they started work? How much do you continue to support them? Do you give all that they ask for or just a part. Will the money help them to become more self-sufficient or will it just lead to more and more requests for help? The answers will vary from family to family. Consider these scenarios and see where you fit:

• You feel that your financial obligations end when your children graduate

• You support your children financially, and expect to do so for the rest of your life

• You will give your child the first few month’s rent and a security deposit for a new apartment and then they are on their own

• Your child can continue to live at home rent-free and doesn’t need to contribute to any of the household expenses.

• You will set them up in an apartment which you will fund until they are on their feet

• You have educated your child and will not give any further financial support, either because you cannot afford to, or you choose not to.

When should you step in and when should you hold back?

Take the time to analyse the request carefully, particularly if a significant sum is required. Is there a genuine need? If they desperately need the money for an important, legitimate need and you can afford it, then there is no harm in giving or lending as the case may be. Most parents would not mind stepping in during a true emergency, such as if a child or grandchild needs medical care, or school fees must be paid to keep children in school.

The implications for your retirement

It is wonderful to be able to support your children but, at what cost to yourself? For many parents, continuing to financially support adult kids who return to the empty nest could have serious consequences for your financial future, particularly your retirement. If you sit down to actually assess the numbers in terms of how much longer you must continue to earn, it puts it into perspective. Remember you need to look after yourself so that you do not become dependent on them in later years.

Family dynamics

Every child is different. Take a good look at each of your children’s money personalities. In the same family, you will discover that various children deal with money matters differently. You find one child has been frugal from their earliest years, whilst another who is a spendthrift and extravagant, feels that you owe them a living. Some children are simply unwilling to accept that they may need to take a step down on the economic ladder when they leave home. Indeed, many young adults seek to imitate their parent’s lifestyle that has taken nearly a half-century to build.

Emotional and psychological aspects of financial aid

Be aware of the emotional repercussions for the whole family, of financial aid. If the handouts are jeopardising family relationships and family finances, then things need to change. When adult children constantly demand and receive money, there may be feelings of dependency that this creates, which can lead to resentment. Parents too may feel resentful, about being constantly pressured to provide.

The psychological dynamics get even more complicated if some adult children are getting help while others aren’t. You find families where for example two self-sufficient sons deeply resent the hundreds of thousands of naira being given to their spoilt sister; the brothers may have concerns that they are being penalised for being financially responsible.

Does helping do more harm than good?

There is a fine line between helping and spoiling your children. How much are you really helping by keeping them dependent on you? If your children know that they can always come back to you for a bail out, they may never learn how to deal with financial setbacks or how to manage their own money. Studies show that the more dependent children are on their parents, the less able they are to be economically self-sufficient.

Of course it makes smart economic sense for a child to move back home where life is comfortable and rent is usually nonexistent. But by allowing adult children to live at home free of charge so they can spend more money on travelling and eating out is not teaching them financial responsibility. At a minimum they should be encouraged to cover some basic expenses whilst putting away some savings to prepare them for the realities of starting out on their own.

Help your child to be self-sufficient

Even if money is no object for you, make an effort to wean your child off you financially, and consider ways to help them become more self-sufficient. If you are going to help a child pay off mobile phone or other debt, put something in writing clearly stating the terms including interest and repayment schedule. Clear expectations and definite limits are always better for all parties involved. Adult children also need to know in advance when financial aid will begin to be withdrawn and may eventually stop.

Saying no is one of the most difficult things for a parent to do, but sometimes you have to step back, take a deep breath, and let whatever happens, happen. Even if some pain results, your child may just learn some valuable life lessons before its too late. They might not appreciate it now, but remember that your efforts to make them financially self-sufficient will ultimately result in more balanced, more purposeful and more empowered adults; the alternative can be grim.

It has been three weeks since the board of the Asset Management Corporation of Nigeria (AMCON) was inaugurated. Since then, much of its activities have been shrouded in confidentiality. Apart from ongoing covert plans to recruit management staff which was not publicly advertised, the financial district for which the corporation is expected to provide succour, is in the dark as to the strategy for roll out. Since the inauguration, investors in the Nigerian capital market have lost a whopping N132 billion, while the market performance indices has reached its lowest level in six months.

AMCON portends good

Finance minister, Olusegun Aganga insists that the AMCON portends good for the economy. According to him, the aim is to remove obstacles in the banking sector and bring it to closure. “So that the financial sector and the economy can start moving again and there is liquidity in the market,” he told journalists at a briefing in Lagos last month.

Governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, is worried about the reluctance of banks to lend to the real sector. “Bank lending has not been growing as fast as we would like it to grow. Bank lending is a major worry because we would like to get more money into the real economy,” he told Reuters.

A major source of concern has been how the project will be funded. Mr. Aganga said he is taken a cue from other parts of the world where it has been done. “In other parts of the world where this has been done, the banking sector which you are helping contributes to the cost. The banks, the Central Bank and the ministry of finance have to agree. Banks will generate about N1 trillion towards the cost of AMCON. I want to do this at minimal cost to government,” he said.

Beyond funding

However, beyond the issue of funding, the apprehension among financial sector operators is how the toxic asset to be taken over will be priced. Emmanuel Moore, chief economist and head, Market Risk Management, Access Bank Plc said at a forum in Lagos at the beginning of the year that the pricing of the assets needs to be sorted out before AMCON begins operation. “They can adopt fair value accounting or mark to book value in which case the assets will be marked at current market value,” he said. He said if the assets are priced low, the banks may not be willing to sell to the AMCON and if priced too high, the banks may be unnecessarily rewarding the shareholders. “So this is going to be the most contentious issue,” said Mr. Moore.

Delay in AMCOM operations

More importantly, many see the delay in the take-off of AMCON as eroding the value of the banks it is supposed to rescue. Unity Bank and Wema Bank initially tied their recapitalisation plans to success of AMCON but are now looking beyond it in order to meet the September 30 recapitalisation deadline set by the CBN. Wema Bank company secretary, Oluwole Ajimisinmi said the N10 billion which the bank requires for its regional banking license is not solely hinged on AMCON. “We are raising N9 billion via a special placing offer which has been approved by the Nigerian Stock Exchange. We already have commitments equal to the amount on offer,” he stated via text message. Ndu Eke of the corporate communications department of Unity Bank said the existence of AMCON would give a boost to its recapitalization effort. “Our rights issue was successful from which we raised over N23 billion. Our success is not hinged on AMCON but it is going to be a boost.” He said the bank was well on its way to maintaining its national banking license.

Many operators are of the opinion that the longer the CBN and shareholders of the eight banks take to agree to sell the banks, the less attractive they become. This sentiment is shared by Dianna Games, the honorary chief executive officer of the South Africa-Nigeria Chamber of Commerce, who believes that the delays were affecting the performance of the Nigerian Stock Exchange (NSE).

“Problems at the NSE, and the possibility that due diligence of the ailing banks may show a worse situation than originally thought, may have eroded investor confidence,” Games was quoted as saying by Times Live, a South Africa based online publication.

No compromise

However, there are no indications that the CBN will reach a compromise with the banks’ shareholders any time soon. The minority shareholders still insist that the regulator has no moral standing to seek investors for institutions it does not own. According to them, the CBN should allow the existing shareholders recapitalize the banks while it supervises the process. On the other hand, the regulator maintains that the N620 billion which it injected into the rescued banks gives it no option that to hand the institutions over to new core investors, or in the alternative, hand the banks over to the Nigeria Deposit Insurance Corporation (NDIC) for liquidation.

Boniface Okezie, president of one of the shareholder groups said the insistence by the CBN to hand the banks over to a new group of owners was in the manner of riding roughshod over other interests.

“What we are saying is that the management appointed by CBN cannot midwife the handover of the banks. Up till now, the Central Bank has not told us how much is required to recapitalise each bank,” he said. According to him, aggrieved shareholders have sought legal protection by obtaining caveat from courts in Lagos, Abuja, and Ibadan restraining any investor from investing in any of the rescued institutions. Meanwhile, the search by the CBN for new core investors for the rescued banks continues.