The following is a Guest Post by CT, creator of Freelance PF, where he blogs about freelance work and personal finance.
“Rich gifts wax poor when givers prove unkind.” – Shakespeare (Hamlet).
“There is no benefit in the gifts of a bad man.” – Euripedes.
“What is bought is cheaper than a gift.” – Proverb, unknown.
When we hear the word “gift” it often comes with such a positive connotation. We think of loved ones and holidays; the benefits of gifts received as well as gifts given. Nostalgic feelings of that childhood bike or a wonderful concert with a loved one may wash over us. Along with alcohol, gifts are the main way that we celebrate.
It is how we recognize birthdays, anniversaries, and even religious holidays.
However, we often forget the potentially dark side of gifts. I believe it is Plato’s Republic that warns there are two major types of tyrants: those who exert power by force, and those who exert power through gift.
The Dark Side of “Service” Gifts
By now you may be wondering how this fits into personal finance. By the end of this post I will explain the high price that sometimes comes with gifts and how to protect your autonomy against gifts that, no matter how well intentioned, may in fact potentially be subtle or not so subtle exercises of control.
It is an admirable quality in any adult to attempt to be fully self-reliant. All too often, however, we allow ourselves to become too reliant on others. In doing so, we may be compromising our own ideals.
For instance, it is common for busy parents today to seek the help of our parents in raising our children. Child care costs are expensive and we are living in a world that is more reliant upon both parents working than ever. The solution: we turn to family members to help watch/raise our children.
Our parents or other family members are often outwardly happy to assist. Unfortunately, such an arrangement is not without risks, for either the gift giver or the gift recipient.
The gift giver may begin to feel he or she is being taken advantage of. They may even begin to resent the arrangement but feel guilty about saying anything or taking steps to change it.
Meanwhile, the person whose child is being watched may look the other way when the “sitter” does not watch the child in a manner consistent with the parent’s instructions/ideals. Whenever we are reliant on another person, we are in danger of selling out our ideals or being pushed into a corner by that person. As for the gift giver, as they say: “no good deed goes unpunished.”
The Dark Side of “Possession” Gifts
Recently I was given a nice house warming present. I did not ask for this gift, but I was at the time happy to receive it. However, the gift-giver (a family member) then proceeded to attempt to tell me where I should position this gift in my house. Being that the gift was heavy, I did not want to go along with the gift giver’s vision for my own home. When I held firm with where I wanted it, the gift giver later remarked that I was unappreciative to a third party and has not spoken to me since.
Taking the same issue from another angle, however, as a gift giver, how would you feel if you learned that the person you gave an expensive present too then turned around to re-gift or sell that gift?
I have a friend whose parents bought him a brand new car stereo. A year later he sold the car, stereo included. His parents would not talk to him for weeks, saying he was not “grateful” for the car stereo gift.
When you are in receipt of a gift, and particularly an expensive one, you will never truly “own” it the way you would an item you yourself purchased. This was why my wife and I made sure we did not need any help from our families for the down payment/closing costs on our house.
The Dark Side of Money Gifts
Money gifts can be particularly dangerous, especially if they are recurring. First, as a starting point, how many families have been ruined by unpaid loans? That is why many experts recommend doing away with inter-family loans entirely and simply “gifting” as much money as you are willing to give, if any. However, there is a dark side to this practice as well.
In today’s Great Recession economy, there are more and more people who are in need of financial assistance. Often times, people will rely upon their family members to make up for a tough financial stretch or a monthly shortfall. I see this in particular with recent college graduates who are still living with and/or financially relying upon their parents, hence the nickname “The Boomerang Generation.”
Oftentimes the gift recipient could learn to meet their financial obligations if they were forced to. They might have to give up cable or other such non-essentials, but it could prove to be a learning experience and an opportunity for self-growth. Moreover, if you are the gift-recipient you will feel guilty every time you spend money on a non-essential item. If your dad has just gifted you $1,000 for your mortgage and you then go on an expensive vacation, it is just simply a recipe for a confrontation.
In other words, you will lack a feeling of personal autonomy and dominion if you take money from others. If this can be avoided, it is probably for the better, even if you have to do without steak dinners or cable for a spell.
In the well-known personal finance classic The Millionaire Next Door the authors titled a chapter: “Affirmative Action: Family Style.” This chapter dealt with parents who propped up their children’s bad financial decisions to such a point that the children never gained the skills necessary to stand on their own two feet.
I have a family member who is 55 years-old and still lives with his mother. He has no money in the bank even though he has held decent jobs for long stretches at a time along with hardly any expenses. He spends his money on football season tickets and expensive vacations.
I often wonder if he would have been better off had his parents kicked him out of the house when he was in his early twenties following college? Perhaps that would have been a needed wakeup call and taught him the necessary skills to stand on his own two feet.
Instead, he has remained at home and never learned to be self-sufficient. The family often whispers about what will become of him when his mother, who is now in her eighties, finally passes away. The many gifts that were bestowed upon him over the years: such as the free room and board, the car insurance paid for by his parents, and much more, have weakened his financial immune system, to the point that he now lacks the strength to support himself despite having no real disabilities or encumbrances. That is the dark side of continued financial support.
The Dark Side of Gifts: Conclusion
Who hasn’t received a “gift” that made the gift-giver look worse because it was obviously re-gifted or too insignificant?
Who hasn’t been stressed out by receiving too large of a gift? “How can I ever repay them?,” you worry. While many gifts are given with the best of intentions, we have to keep in mind that personal sovereignty is in most instances the key to a happy life and a financially balanced existence. “Gifts”, whether from the government or from loved ones, often come with strings attached, whether we see them or not.
At the same time, we as gift-givers must be careful to not be taken advantage of or to harm another through the gifts we make. In doing so, we can avoid the dark side of gifts, and focus on the most important gifts we can give: our gifts of friendship and love.
Have you ever received a “Trojan Horse” of a gift? Please share your experiences with the dark side of gifts, both as a gift-giver and a gift recipient.
The above was a guest post by CT, the creator of Freelance PF. CT blogs on the FreelancePF company website about the nature of freelance work as well as personal finance. FreelancePF offers freelance writing, blog development, consulting work, blog creation, and other freelance services. FreelancePF specializes in personal finance freelance work. FreelancePF Blog Network also features other personal finance blogs created/run by CT. To inquire further or hire FreelancePF, you can visit the FreelancePF website.