‘I’m not embarrassed’: Pocket-money Millennial responds to backlash

A Millennial who asked her parents to control her finances after she racked up thousands in debt has released a book advising other Millennials how to save for their own property. Emily Power, 35, is currently editor of Domain magazine, one of Australia’s highest circulating property publications.

While she still hasn’t purchased her own home, she has plenty of advice for others in a similar situation. In 2016, Power gave her parents full control of her pay packet, which saw them ration out pocket money to help their daughter out of the $14,000 debt she’d racked up over several years. Each fortnight, Power’s mum and dad would give her $400 pocket money to spend on food and outings. 

Writing a column about her unique situation at the time, Power faced backlash from people confused as to why a person in their 30s would need their parents to control their finances in the first place.

“My critics sound like they are embarrassed for me, however, I am not embarrassed for myself,” she tells Starts at 60. “It’s very important to discuss money openly, without judgement, because mismanaging it or not seeking counsel if you are not naturally able to manage it well can be a life-altering disaster, and for me, it greatly impacted my mental health and wellbeing, as much as my bank balance.”

While some have previously accused Power of spending her parents’ money, she insists that was never the case. 

“The ‘pocket money’ is all my own money,” she explains. “My parents, who are both 63, do not financially support me in any way and I live out of home, renting.”

She says their role is as her “financial champions” and that rather than enabling her through the pocket money strategy, are actually helping her make smarter financial decisions.

“I am fortunate that I have a close, warm and supportive relationship with my parents in which we can discuss the brutal truths of finances, and one in which they are willing to take an active interest in my intensive financial re-education,” she adds. “And when I take control of the back account, in preparation to apply for a home loan, I will not fall off the band wagon and return to my previous poor habits because I know the level of sacrifice that it takes to build that deposit. I respect and value the effort behind every dollar.”

While Power’s situation by sound dubious to those of an older vintage, she’s far from alone. A 2016 survey by Australian credit bureau and data insights company, Experian, found Australian Millennials have more credit debt than any other age group and are experiencing the most financial stress due to poor budgeting decisions.

“On average, Millennials with a mortgage, credit card or personal loan are $428,000 in debt, owing $146,000 more to credit providers than the average GenX and Baby Boomer,” David Grafton, managing director credit services and decision analytics at Experian, said at the time.

Millennial’s are also far more willing to use credit to purchase goods even if they could not comfortably make the repayments.

Power says the pressures of the modern age are forcing young Aussies to live up to certain standards, even if they can’t afford them.

“I feel that in an age in which Instagram and social media is putting pressure on for us for portray an enviable, aesthetically pleasing lifestyle, we are putting pressure on ourselves to look and act a certain way,” she says. “None of this is conducive to frugal habits. Marriage and children is also coming later in life for us, and there is not the same urgency and impetus to get our finances in order and plan for the future that seemed to exist for our parents.”

When asked why she’s released a book, titled How to Buy a Home, despite not yet securing a deposit for her own home, she says it’s to show other Millennials that their mistakes can be corrected.

“I also realised that sound financial management, and having the confidence to understand finance for your future, needs to start before you even begin searching for the property – it’s a habit that should start from the genesis of the idea of saving.”

What do you think? Should parents of adult children manage their finances? Do you still help your children out with money issues?