Someone I went to college with had their parents put up the down payment on a home. Of course it was the midwest and the home was about $40,000, so that is what, 2-4k?
I lived with my parents after graduating which helped me out immensely. I was able to put most of my earnings into paying off debt instead of rent/utilities/food.
I suppose helping your kid with a down payment is much better than having that kid (and his/her partner and/or children) move in with you, as my dad has allowed my idiot brother to do for a decade.
Better to just hand them $10K or whatever for a down payment on a starter home and tell them to suck it up and adult.
I will say, that if parents decide to help one kid like that, they should be prepared to help ALL of their kids like that. Otherwise, either the star or the fuckup get extra-special treatment, and that’s not good.
I’m so happy I’m not a parent, because I don’t know how I would deal with sibling inequities.
Let’s say you give one kid $10K so they can buy a modest Midwestern house. But another kid lives in NYC, where $10K will get you a parking space. Do you just give them $10K and hope no hard feelings?
Or let’s say you help one kid with their Ivy League college tuition, while you watch in awe as his kid brother propels through school on a full-ride scholarship. If you help the latter kid buy a $300K house after graduation but say “sorry charlie” to the other, are there going to be hard feelings?
Do these kind of gifts foster feeings of entitlement?
If this is a trend, it could be that older parents feel as though helping their kids out with the mortgage is a way to redistribute affluence to their less fortunate offspring. And this makes sense to me. Times are economically harder than in previous decades.
It used to be if you did all the “right” things (go to college, live frugally, networking, etc) you had a high chance of eventually getting a well-paying job and a nice house within comfortable commuting distance. Now, in general, you can’t count on getting those things with the same amount to effort. You have to hustle a lot more or be satisfied with less.
So I imagine a lot of parents feel guilty when looking at their adult children who are doing all the “right” things they did (and plus some), and yet have a lot less to show for it. And this guilt will cause them to feel more obligated to throw a few dozen thousand their way. It’s their way of evening the scale a bit. Most parents don’t want their kids to turn out poorer than they started in life.
I see no reason to think parents are going to start bankrupting themselves.
If something were to go horribly wrong and I accidentally had kids, here is what I’d like to think I would do:
Leave tuition and books up to my kid(s). Buy a house in the college town where kid got accepted. Let my kid live there rent free, but charge his or her friends a reasonable rent so the house pays for itself. When said kid graduates, sell the house and let kid have the proceeds.
My dad sometimes says he wishes he’d done that and I sure wish he’d have done that.
Not the least bit new. I didn’t ask my parents for help, they wouldn’t have anyway, but even though my mother-in-law did not have much she gave us a little money to help build up the cash we would need at closing. I can only think of a few people who didn’t receive help from their parents that I know of in my lifetime and in each case they were either financially well off at the time or their parents had no ability to help.
Perhaps what is happening is that we are still in the midst of the second decade of a disastrous economy and fewer parents are able to help their children. I recall young people who’s parents were of modest means helping them in their first house purchase in the 80s. With higher down payments now required, and much higher costs there may be fewer middle-class parents able provide enough assistance to their children to get started in their first home and only those at the higher end of the economic scale can afford it.
If I were that kid living in NYC, I would take that $10K and be gloriously happy about it. Living in a city with a high cost of living is no one’s fault except my own, and I wouldn’t expect my parents to bleed themselves dry on my behalf.
I* wish* my unborn hypothetical kid would have hard feelings if I gave them $10K instead of what Midwest $10K amounts to in NYC dollars.
I’m not saying you’re wrong (I’m incined to feel the same way). But I can also see why this would foster resentment. Sure, living in NYC is a choice. But if one can’t get a job anywhere else but NYC (or other pricey areas), then it really isn’t a “free” choice.
There’s also the primacy effect at play. Say it’s NYC Kid who gets help with buying a house first. Mom and Dad gives her $50K so that she can buy a condo. Are they obligated to give younger bro the same amount, even if he chooses to live in Nutbush, TN? Should his own financial situation factor into the equation?
I think parents should administer their generosity wisely, with the understanding that any big disparities between siblings will likely foster resentment. To this end, financial need should be a major determinant of how much is given.
But sometimes opportunities present themselves out of the blue, and I don’t think there is anything wrong if a parent chooses to help one kid out with some cash but doesn’t immediately give the others kids comparable sums. I mean, if you asked our parents for 10K to close on the house you just bought or else risk being outbid, I would have cared less because I’m lucky enough to have my own house.
Really?
Because I’m a be straight-up honest. If our parents cut you a check for $10K with no strings attached, just because you want to upgrade to a bigger house and they’re feeling generous, I am going to feel negatively if there’s no gravy left over for me when I have a burning desire for something equally luxurious. I’d feel hurt, jealousy, anger, and sadness. It doesn’t matter if I’m happy enough with what I have. Gifts are a reflection of love and affection, as well as a response to neediness.
I mean, I can see the difference in putting one kid through Princeton and another kid through Cal State. The price tag is different, but they are getting similar (enough) experiences. But to give one kid a big boost into the middle class and say “sorry charlie” to the other just because the first kid raised his hand first strikes me as unfair. I don’t care how you slice it.
My kids will graduate with degrees debt free. We bought them each modest but reliable starter cars – a 2001 Honda Accord and a 2001 Mazda Protege, so that they’d have transportation to and from school and work. We did this ONLY because we could afford it.
Does this mean that we’re “good” parents? My goodness, no. So much of what we have boils down to luck. To be honest, the title “Parents helping adult children buy homes: Raising the bar on good parenting?” actually makes me bristle. Since when does splurging on our kids equate to good parenting? I know tons of GREAT parents who could never afford to gift a sizable DP on their kids’ homes, let alone fund 100% of their college.
Good parents teach their kids to live within their means.
Good parents teach their kids right from wrong.
Good parents teach their kids to own up when they’ve done something wrong.
Good parents teach their kids how to operate a washing machine and make simple meals.
Good parents hug their kids when they’ve gotten their heart broken.
Good parents teach their children how to lose gracefully.
Good parents teach their children how to WIN gracefully.
Good parents know where their kids are and who they’re spending time with, whether in person or on the internet.
Good parents teach their kids how to shake someone’s hand and carry on a basic conversation.
Good parents teach their kids how to read a map, change a tire, and read road signs.
Good parents teach their kids to be kind to people who look different and act different.
I mean, I could go on and on and on for days before I’d ever get to “Good parents buy their kids a house.” And if I were to hope for anything for kids, it’s not that their parents will earn enough money to buy them a home, but that the job market improves so that the kids coming into the workforce have good job prospects…so that they can buy their own homes and raise their own families.
Parents of multiple children frankly can’t win in practice no matter what steps they take. You learn quickly that fairness as a parent doesn’t mean everyone gets the same sized piece of cake - sometimes one of your kids doesn’t get dessert because of their actions. Sometimes one kid doesn’t like the kind of cake you made - but its the other’s favorite. And that extends to college tuition and helping out when they are adults.
I have a son who isn’t interested in a four year university, does that mean I shouldn’t pay for my daughter who is interested? (No) Does that mean he should be able to use his education savings for something else? What if that something else involves marrying an addict and helping her feed her addiction? (I should let him use his college savings for something else, but I get to approve that something and addiction isn’t on the approved list, buying a house might be.). Because they are very different children, the way I help them get to independence - financially, emotionally - will be very different. And therefore, no matter what I do, I could be accused of being unfair.
Which doesn’t absolve me of the ethical responsibility to try to treat my children fairly, but its up to me (and my husband) to determine what that means, even if that means one of our kids feels slighted.
And I bet you know, as I do, a few lousy parents who tried to buy their way into good parenthood - with cars or clothes or college or houses (or when they are younger, with toys and trips). It doesn’t work that way.
I’ve known many lower/working class as well as middle class people. I think there is maybe one middle class couple I can think of who did not get help with a down payment on their home either through outright parental charity or inheritance. Actually, that couple is a blue collar, thoroughly working class husband and a middle class wife.
Among blue collar people I have known and know now, a good portion inherited their house and many rent because that is the only option. Most blue collar people I know would help their kids pay for college - your situation seems unusually harsh.
It seems to me like this is becoming more common as well, though I haven’t seen studies to confirm it. One thing that I’ve noticed in talking with people who do this is that they’re all emphasizing the value of real estate as an investment. While that’s not exactly new, the idea of real estate as a speculative investment is fairly recent. I know one guy in particular who cashed out almost all of his 401k to buy houses for his three kids, planning to sell them after four or five years, and expecting profits from that. People increasingly justify these kinds of decisions as investments.
That said, I’m not sure it is so smart. One of the problems that the 2008 crash brought us was regional unemployment with people tied to houses that were underwater. Renters could afford to move to find jobs and homeowners were sometimes stuck. I think a kid who isn’t stable enough to have saved up their own nest egg is probably not stable enough to be picking a permanent residence either. A little extra mobility is not such a bad thing at that stage of life.
I think this is one of those little things-- like getting a car at 16, or having a college fund, or being able to stay on a parents health insurance – that we don’t really categorize as “privilege”, and yet which had an enormous impact, taken all together, on our lives.
It’s is absolutely normal for a lot of people. But it is unusual-- and maybe impossible, for many others. It frustrates the hell out of me that America doesn’t have a way of talking about class, which makes it hard to really discuss these kinds of topics.
When I bought my first house in 1980, my grandfather loaned me $7000 against closing costs and initial setup expenses. I agreed to pay him back at a specific rate, with interest, but my grandmother thought it was terrible that he’d charge me interest and made him rescind that part of the deal. In return, I paid him back lots faster than our original agreement.
We forgave a rather large debt of our daughter’s so she could get a house. But she decided to move out of state and share a house with an old friend. Now that we’re retired, there’s no way we can afford to help her buy. Unless her no-load boyfriend gets a job, she’ll just be renting the rest of her life - or until she inherits this house, assuming we don’t sell it before we die.
This thread has been quite eye-opening. I grew up in a very middle-class home (two cars, one vacation a year, cable TV but no premium channels, etc.), and it would never have occurred to me that my parents would help me with buying a house. I would definitely have put that in the category of “rich kid” thing.
This is not to say that my parents have not been generous when they could be. They helped me out with college, for example (though I had loans as well). Whenever I see them if we go out they’ll usually treat for dinner. When my grandmother died they wired some money into my account to help pay for the plane ticket for me to come to the funeral, though I told them they didn’t need to. But a house? Noooo…
Yes, this would be difficult. Example: my parents never gave me a car, and I never asked for one. (When I was in college they offered to help buy me a bike, but I said no need and I walked everywhere.) They gave my little brother a car, though, and while this surprised me I figured maybe by that point they could afford it. What really steamed me, though, was when I asked my brother if I could borrow the car for a weekend (we lived about half an hour away from each other, and I still did not own a car at that point - I relied on public transportation) and he refused. I’d assumed that it would be a joint car for the two of us since we lived nearby and could both use it, but no: he insisted that it was his car and his alone. When the issue came to my parents’ attention they washed their hands of it, saying that yes, they had signed it over completely to him and it was his choice.
Of course, I blame my brother’s selfishness more for that than my parents - though it did annoy me that they couldn’t even tell him, “For god’s sake, let Rodgers use the car.” :mad:
In my case, my parents aren’t wealthy (retired schoolteachers). They offered to help my brother and I with college - by which they carefully explained that they meant we had best plan on playing the whole shot ourselves by any means we could devise (scholarship, loans, etc.) and they would help as they could. As it turns out, they just paid my brother’s tuition (he went to in-state school, but had no scholarships and minimal loans) and helped me pay off my student loans (my tuition was mostly covered by scholarship - the loans were primarily for room and board and books and so forth). I sincerely doubt the dollar amounts worked out evenly - I was a much better student than my brother, but went to a more expensive school. However, neither of us feel like we got short-changed, either. We both had to do some stumping to get through school - and both of us damn well had jobs while we did it.
When my brother got married (some years before I did), my parents - as a wedding gift - helped him build his first house (actually, it was a duplex - they rented out the other half). By that I mean literally they went to the town he was living and my dad (who is a professional carpenter) and my mother (who can follow directions given by a carpenter) and helped him build the house. They actually did most of the non-plumbing or electrical work and paid for a portion of the materials. My brother and his wife helped out evenings and weekends. The result is that my brother got his first house for a vastly smaller amount than if he’d had one built (or bought one ready-built).
When I got married, my parents informed me that when I was prepared to purchase a house of my own, they would be presenting me with a cash amount that was “equitable”. They were no longer really physically in a position to do the construction themselves at that point, and knew it was likely to be a few years before I was looking to buy a house. When my husband and I were at a house-buying position, my parents did, in fact, present us with a cash amount. It was not the same as what they spent on my brother’s house - it was bigger actually. My mom decided what she thought was fair and gave us that much - we were (and remain) deeply grateful to my parents. I believe they also made a fairly substantial wedding gift of cash to both of my half-sisters upon the occasion of their respective marriages - although I’m not actually sure, because my sisters are quite a bit older than I am and got married when I was not at an age to give a rat’s ass about such matters.
As it happens, given market conditions (both the overall real estate market that crashed between when my brother bought his first house and when I did) and the respective locations of our first houses, I was able to buy my house outright in full, where my brother had a mortgage on his. Neither of us feel like we were treated inequitably - and both of us were (and remain) deeply grateful to my parents. It so happened he bought his first house at basically the height of the market in a fairly robust (but not ridiculous) market, and I bought my first house at the absolute bottom of the market in one of the hardest-hit markets. Approximately the same cash had very different buying power.
My mother (who handles all the financial transactions in my parents’ household and always has) viewed this as essentially paying us our inheritance at a point when it’s more useful to us than when they pass. Since the youngest age of marriage among my siblings was 26, she was fairly sure that by the time they died, we would quite likely be at a point in our lives when a large capital investment would not have anywhere near the same beneficial impact as we were at the time we got married. Her thinking was essentially that a head start on home ownership was highly likely to be a good basis for future prosperity. Thus far, she’s been correct about that - even with the housing crash and economic downturn.
She also informed both of us that if their financial picture had changed and made either of the house-buying gifts (or the college education for that matter) not financially prudent for them, one or both of us would have been out of luck. She still expects us to be financially prudent and responsible - and wouldn’t have given us a thin dime if she had a thought that we wouldn’t be both of those things. She taught us how to manage our money.
So the TL;DR version of this is basically that my parents handled both college and home buying assistance as a GIFT (i.e., something we had no right to expect) and as a form of early inheritance that came at a time in our lives that was more useful than my parents’ eventual death.
Lots of people are talking about class, I’d say a handful of people are listening; of that group I’d say it is a fairly small portion that understands.
I wish people would just stop tying so much of their self worth into their accomplishments and then making sweeping judgments about others. I’ve seen it do little good and just drives a wedge between people.