Navigating Family Power & Financial Delegations
Updated: May 24, 2022
My father was born in the year of the tiger. Growing up in a Chinese family in Singapore and Malaysia he was one too many tiger for the family, so as a child he was called “little pig” to reverse the bad luck. Humble but heroic, he eventually refused to answer to anything but the English name “Robin”, as in Batman and Robin. As we move into February, the start of the lunar year and also the month of love, I wanted to talk a little about financial roles in your family. When I was young, my dad set me as an authorized user on his credit card and let me buy gas, school supplies, and groceries with it. This set me up to have good credit by the time I turned 18, though I didn’t know it at the time, and I didn’t know the hurdles that others would face trying to get their first credit card, phone contract, or apartment. My dad is also a financial advisor, and he helped me to get a start in life. That’s not always the case. Many of our parents never rose out of poverty. When it came to helping us make financial choices, they might have lacked the knowhow or simply been silent on the topic of money.
The role of the parent is to guide and protect a child. And many children trust their parents implicitly. Many families act selflessly toward each other and share resources, sometimes prioritizing the wellbeing of their family member equally or above their own interests. There are many sections of IRS code specifically geared to tax family members like a fluid entity knowing that family members will often shift property between them to avoid taxes. That shift only happens when there is implicit trust. In queer community there is an aspiration of “queer family” born out of widespread family rejection and I do think that queer people put a lot into community in general. But that doesn’t often rise to the level of combining finances with friends or paying for another’s expense the size of college or a house. Romantic partnerships are sometimes the only additional instance where finances become fluid. When couples share finances, managing finances may be taken up by the most experienced partner. I’m not a stickler for complete independence—I think the consensual adoption of roles can be very liberating. And coupling people with divergent skills devoted to helping one another for free is great, but it may cause problems down the road if the skills or awareness of the less involved partners decline over time. Without awareness of their own financial situation, some individuals find themselves in trouble. This may be due to separation or death, or it may be due to mishandling of finances by the person in charge. Without a second opinion, financial mistakes could be left unchecked. The less involved person may be in the dark for years, not knowing how much money they have or what lines of credit are open in their name.
Money translates into power in the world, into an accumulation of your life’s efforts. And the patterns carved in loans and cards in your name build up into a FICO score that stands in as your reputation. It impacts everything you do. So there is nothing more crushing than putting your trust into a family member and having them gamble away your savings or ruin your credit by opening accounts with your information. If you have some time, read this haunting and eloquent piece about a woman dealing with the aftermath of her mother's identity fraud. Kids can’t protect themselves from theft, but as we mature we can take a look at the kinds of financial delegation we may we doing. I’m not saying that we should suspect our partners, but as an adult sharing your financial load with others, make an effort to have an overview of awareness. The same can be said of our relationships with our parents or others who may handle money for us. They may serve as a trustee in a trust for which you are the beneficiary. Get clear on what your legal rights are and what is in your name. Do they simply hold the passwords to an account you actually own, or are they the authorized signer? Do they hold something that they say is for you, but is held in their name? Did you put something in their name on purpose, expecting them to give it back when you say so? If you don’t have a legal right to something, you may never see it again. Trust your loved ones. But know what it is you’re trusting them with. And if you don’t want to be the little pig, you don’t have to be.
P.S. How are we doing with those resolutions? Please check out this exciting article in Forbes Women where I am interviewed by Virgie Tovar. Retire ‘Tightening The Belt’: Why Fatphobia Doesn’t Belong In Your 2022 Financial Goals.