The hidden costs of family financial dependence—and how to strike a balance

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Subscribe to enjoy similar stories. In India, family is often seen as the core unit of social and financial security. Families frequently pool their resources to meet collective financial needs.

While this approach strengthens family bonds, it can also give rise to financial enmeshment—a situation where the lines between individual and family finances become blurred. Financial enmeshment can lead to a lack of autonomy, particularly among younger members, and strain financial relationships across generations. Financial enmeshment occurs when family members are overly involved in each other’s financial matters—a situation with nonexistent boundaries.

Historically, the joint family system in India fostered financial interdependence, where multiple generations lived together and shared resources. However, as modern families shift towards nuclear structures, these traditional expectations persist, creating tension between collective and individual financial goals. Financial enmeshment is particularly evident during important life transitions, such as when young adults begin earning or middle-aged individuals end up supporting both their children and ageing parents.

For young adults, financial enmeshment can limit their ability to make independent decisions, such as saving for retirement, investing, or purchasing a home. Instead, their financial priorities are often dictated by the immediate needs of the family. This dynamic can delay the development of crucial financial skills, such as budgeting, investing, and managing debt.