Holidays Bring -- Family Spats Over Money

Harry Smith and Dave Ramsey
CBS/The Early Show
We tend to see a lot more of our families around the holidays, which means there are more opportunities for -- conflicts to arise, particularly over money!

On The Early ShowTuesday, financial author and radio show host Dave Ramsey discussed three such conflicts he sees a lot in families, and gave advice on how to handle them.

Specifically, he addressed kids of college age and older who ask parents for money, grandparents who spoil their grandkids with too many gifts, and parents who "misbehave" with their own money.

ADULT KIDS WHO ASK FOR MONEY

When it comes to families and money, this one is a doozey. As a parent, you're in a tough situation: Of course, you want the best for your child, and in many ways you feel guilty not giving him the cash he requests or co-signing on that loan, whatever the case may be. However, says Ramsey, by giving her the money or co-signing on a loan you're being a classic enabler. "Enablers are nice people and they want to help the people they love," Ramsey says, "but you need to define 'help' carefully. Don't just give them the fish, give them a pole and fishing lessons." He says under no circumstances do you want to ever give a family member a loan. For starters, anyone asking for a loan is clearly in financial trouble and you don't want your name officially linked to theirs. After all, the lender wouldn't require a co-signer if this person weren't risky. There's a good chance you would ultimately be forced to take responsibility for the loan in order to protect your own credit history. More importantly, loaning money to a family member can result in hard feelings and permanently damage a relationship. So, if your child asks for a loan either say no, or just give them the cash outright. But, as mentioned above, Ramsey doesn't think simply handing over cash is always the right way to go, either. Consider some sort of cash-matching agreement: They pay off $1,000 in debt, you' give them the same amount to put toward the debt; they save $500 in their 401(k), you' give them the same amount for their savings.

GRANDPARENTS WHO SPOIL THEIR GRANDKIDS
Grandparents are practically required to spoil their grandkids! But how many parents groan when they see Grandma and Grandpa coming up the drive, arms piled high with gifts that the kids truly don't need at all, gifts that effectively take care of the entire Christmas list in one fell swoop? You might be surprised by Ramsey's advice on this one: He says parents need to lighten up! "Parents need to just enjoy Grandma and Grandpa," Ramsey says. "Sometimes, we are just a wee bit too intense about these details!" However, if it truly is a problem in your household and you feel the situation is turning your child into a brat, then you need to talk to the grandparents. The key here: If your parents are the problem, then you -- not your spouse -- need to do the talking. Never send the in-law in to do the dirty work. Obviously, you don't want to have this conversation in front of the kids, either.

PARENTS MISBEHAVING WITH MONEY
What do you do when you go visit your Mom for the holidays, and realize she's spending money she doesn't have, or acting financially irresponsible in another way? "This one is tough," Ramsey admits. "It's hard for Mom and Dad to hear advice from their kids. You could have an MBA and Mom would still not want to hear your opinion about her money, especially if she's misbehaving." Of course, before you really try to tackle this problem, take a step back and make sure you're helping, not interfering. Is your parents' behavior truly hurting them, or are they just handling things differently from you? Remember -- there can be multiple paths to the same goal. Being stupid isn't a crime, Ramsey is fond of saying, and adults are allowed to do stupid things. Because you love your parents, and because you don't want to inherit their financial problems down the road, you do need to try to approach them on this issue. You canNOT be condescending. Point out that you've made mistakes with money and you're afraid they're going down this same road. Make sure they realize the conversation you're having is based in love. Unfortunately, you need to be prepared for disappointment, and not be surprised if there's a backlash from your parents. There's a good chance they aren't going to appreciate your advice or concern, at least not right away. You simply have to know that you've done all you can do, Ramsey observes.