I trust you are not a parent. Because bringing kids into the world does create an obligation. Not to give them everything they want, but an obligation nonetheless.
We’re not talking here about giving cash to kids so they can party, but giving them money for an investment, either education or property, which will pay off for the rest of their lives.
Of course I am a parent. The financial obligation is to provide progeny with necessities until they are of age to obtain said necessities on their own.
I provide WAY more than that for my offspring and always have, but that is because I choose to, not to fulfill some imaginary contract I never agreed to.
I received plenty of help in life from my parents. They owed me absolutely none of it and I am grateful to them making sacrifices to help me. As a young single parent, I was loathe to ask for their help, but I had to swallow my pride and do so for my child’s sake. The idea of asking your parent to give you money to buy property is disgusting to me. The idea that their gifts to my sibling were any of my business is ridiculous. The idea that the money they may leave to you when they die is “your” inheritance so you should demand it now is runaway entitlement. They could be using that money as they please to enjoy the remainder of their lives–why the heck would you want them to give it to you instead?
Asking to borrow money from parents instead of a bank so they can get the interest instead is not unreasonable, and if they offer it as a gift instead, that’s their choice, but there is certainly no obligation to finance your adult children in any way whatsoever.
Don’t people have any pride anymore?
Your post goes to the question posed in the thread title, I think.
I think every (good) parent wants the best for the children. But even good parents can disagree on how best to accomplish this. I agree that parents have an obligation to help their children optimize their chances of having a successful life. But how does a parent distinguish a reasonable expectation from an unreasonable one?
It just seems like what is reasonable keeps changing through the generations. A parent who doesn’t contibrute anything towards college tuition is seen as borderline negligent nowadays. I’m wondering if we’re coming to the point where a parent who doesn’t contribute to their children’s downpayment (or other investment vehicles) will be seen the same way. That is, someone who is not meeting their basic parental obligations.
I have no doubt that my parents will save me in the case of emergency. They would say that their obligation to me is to catch me if I should fall–and that seems reasonable enough to me. But I’m sure it sounds like “bare minimum” to someone else. What do you think?
According to The Millionaire Next Door, adult children who continue to be financially supported throughout their life by their parents generally fare less well in life than those who are required to be self-sufficient.
We do not provide any ongoing financial assistance to our children, even though we could easily afford it. However, I see no harm in one-off assistance to give them a leg up. They got equal college funds sufficient to cover all costs if they stayed on schedule and maintained their state-provided scholarship. One graduated early, and got to keep the remainder of his fund. The other took an extra couple of years and needed student loans.
We bought some furniture for each when they got their first apartment.
When it comes to a house down-payment, I don’t know - haven’t thought about it yet. But if we do provide anything, it will be equal amounts to each.
Ditto, this makes my blood boil.
With my parents and my two siblings, financial assistance and gifts have always been based on:
- What my parents could afford at any particular time
- Needs at that time
My parents contributed what they could to each of our college educations, but I’m sure we all didn’t receive equal amounts of financial support (I’m the eldest, and my parents’ incomes increased substantially as the years went on). When I was unemployed for an extended period of time, my parents gifted me some cash to stay afloat. When one of my sisters was ready to buy a starter home, my parents helped out. When I was ready to buy a home, my wife and I had saved up enough and didn’t require assistance (I had been working for many more years before buying my first home than my sister, in higher-paying jobs overall). I didn’t need help buying my first home, so my parents didn’t help.
As far as I’m aware, no one in my family harbors any resentment, or is keeping score on who received what. For us, help is provided when it’s needed and the giver can comfortably afford to help.
I’ve heard frequently from my sister that I was/am the “golden child” while she had nothing. I know in some instances it’s true (my cousin and I, both being adopted, received monetary gifts from our grandparents, while my sister and non-adopted cousin did not; however, they were spared the “you bastard child” lectures and being treated like poor orphans by them, too). Overall, though, I think we were treated equitably by mom and dad.
Yes, our parents probably spent more money on me, BUT she had much more freedom and spent more time with them. She actually had a childhood. Some of it comes down to life choices - she opted not to go to college when she graduated high school. Instead, she married. Our parents paid for her wedding, bought all their furniture, and supported them off/on for quite a few years. I went to college, so they paid for a chunk of it. When she did decide to go back to school, they chose not to help her, stating she used her college fund when she married.
Our parents helped both of us purchase our first homes. Sis is still bitter, 20 years later, as she never liked the home they helped her buy. She claims she didn’t have a choice in the matter (her apartment building was being razed, she futzed for 6 months looking at homes until it became “You will be homeless unless you choose something”). I wasn’t a fan of my first place, either, but I was thankful for their help. She lucked out in that our parents actually allowed her to live in her first home without being treated like a clueless idiot. I still have to remind our mother that this is MY house, not hers.
It’s a give and take - they assisted her without strings attached. I was friggin Pinnochio.
I want to help my child leave the nest not having to struggle. I’ve heard over and over again how you appreciate what you earn if you’ve struggled for it. Life can be struggle enough when you’re young. If you can afford to help your child not leave college $50K in debt, why wouldn’t you? If you can help your child live somewhere safe and warm, why wouldn’t you?
My daughter knows I cannot help her like my parents helped my sister and me. It’s just not financially possible. I chose to help with her student loans and I allow her to live her rent free (although she pays half the utilities). She has friends whose parents have paid for everything (tuition/apartments) and those whose parents basically said “You’re 18, have a nice life”. Life is fairly miserable on both ends of the spectrum, from what I can tell. Those whose parents pay for everything have to dance to their parents tune, which can suck greatly. Those whose parents booted them out after graduation are struggling to make ends meet - only a few have been able to go to even community college.
Darwinistically, isn’t it in your self-interest to pass on as much of your assets as possible to your descendants?
I can think of a lot of good reasons. Like, maybe you, the parent, does not think this is good investment and thus don’t want to lend any support to it.
Maybe you can afford $50K. But then you realize that your elderly parents would do well with home nursing care instead of you rushing over there every other day. Maybe you decide that your kid’s job prospects are good enough so that $50K worth of debt won’t cripple them too much. While your quality of life would be improved tremenduously with that money (and if mama’s quality of life isn’t good, no one’s is).
I don’t have kids. But if an imaginary kid came to me and said, “Why won’t you give me $50K so I won’t have to go into debt?”, I’d probably laugh at them. I don’t know why, but it would just rub me the wrong way.
Depends on the kid and the parents. And what they see as important. We have two daughters, and when they got married they got a reasonably small amount of money as a budget and could do whatever they wanted with it. If there was money left, they could keep it. It worked out great. My boss, on the other hand, spent a fortune on culturally required weddings, money it is not clear he had.
No parent should into debt for any of this stuff. No parent should risk their retirement. But I’d rather give some money to my kids now for important things than to have them inherit it when they are 60 and don’t need it.
If my kids wanted money to go to party schools and goof off, that’s one thing. But they both went to top colleges and worked their asses off and made the best use of their opportunities. And I wish it were only $50K. They didn’t have to ask for tuition - they always knew it was available. Now they are in good shape and can get on with their lives without a crushing debt burden hanging over them.
My sister paid for the part of my niece’s college that wasn’t covered by scholarships (probably $40K/yr) and upon graduation offered her a down payment for a house in the town she was moving to for her job, or a fabulous trip to Europe, maybe staying in Italy or France and taking cooking classes, or something of that order. My niece chose the house, a nice, turn-of-the century home with 4 bedrooms. She married a year after graduation, she and her husband are on a strict budget to have all their debt (mortgage and his student loans, mostly) paid off in three more years (five years from graduation). My sister did tell her daughter that now that she’s well started on her adult life, she’s responsible for herself. My niece is an only child.
StG
I think one other thing factors into this
and that is status.
Some people who are at the upper income levels help their adult children because they want them to look good.
If you are living in a neighborhood of multi-million dollar homes you may not want your kids living in a lower neighborhood. So the parents will help the kids out to keep up appearances. What will the neighbors think if your kids aren’t living in the right zip code? The kids may get the benefit but it’s more about the parent’s egos. They can say look at me, look how much money I have. Not only do I live in this neighborhood but I could afford another house for my kid. Or look how successful my kid is, (s)he could afford a house in this neighborhood.
I saw it with cars when I was growing up. I know a guy who got a corvette for graduation. He didn’t want the corvette (yeah I know what teenage boy doesn’t want a corvette? but he wanted to fit in with his friends), his father wanted him to have it. It gave his father bragging rights, look how successful I am, I can buy a corvette for my son.
Other parents I know help their kids out and then complain about it. Stealth bragging, poor pitiful me, I had to spend $10,000 on the wedding and then had to give them another $25,000 down on a house.
No you didn’t, you wanted to, and now you get to brag about having $35,000 to give away.
Or they get to play the martyr, look how much I sacrifice for my kid.
I’m watching a friend do it now, although the numbers are much, much smaller. I’m not impressed, I want to smack her.
For some people appearances are everything, and that extends to the kids.
So here is my deal on parents and paying for children - and its going to be judgemental, but - hey.
If your income is going to screw your kids on the FAFSA, you have an obligation to save for your kid’s college. My kids would get screwed on the FAFSA, therefore we’ve skipped some vacations, some nicer or newer cars, my house is in bad need of carpet, my basement is unfinished. None of these are burdensome sacrifices.
If you raise your kids with the expectation they can go to college anywhere - you have an obligation to save for your kid’s college. They probably won’t get those free ride scholarships (if they do, awesome) and federal need aid is scanty.
If your income is small, and saving for college would be a sacrifice, then that is why there is federal aid and need aid and private grants and scholarships. Your kid will probably still have debt where someone with wealthy parents might get through without loans, but you can only be expected to do what you can do.
If you raise your kid with the understanding that a second choice school that offers a great aid package, or two years worth of community college, or four years worth of State School while living at home (or with Uncle Jim who lives 20 minutes away from campus) is what they should expect - and if they end up with that free ride to small private school that’s awesome - and that they’ll likely graduate with a few loans, you are off the hook for college savings.
The people that combine the first two (his and hers BMWs in the driveway traded in every two years, kids who expect to go to $50k a year private colleges and Mom and Dad encouraging that expectation) who don’t save who push all my judgemental buttons.
The arguments for home ownership don’t make a lot of financial sense to me. Most of your monthly expenses do not go to principal. They go to interest, upkeep/maintenance, taxes, fees, etc. I guess it depends on where you live. If you rent for less than ownership and take the money you would’ve spent on home ownership and invest it instead you’d probably break even or come out ahead. But again it depends on the cost of rent and ownership where you are.
Is there a way to rent that doesn’t include forking out for maintenance, taxes, fees, and probably the owner’s mortgage, too?
Often there are economies of scale. My large rental building had a salaried handyman on the premises, and my share of his salary was probably what it’d cost me to call the plumber once now.
My building has also been owned outright for probably the last 50 years, so anything above expenses for them was pure profit, and they weren’t too worried about pinching the pennies.
Sure, these things are baked into the rental payment. But if you’re paying $500/mo for an efficiency apartment, you’d be hard pressed finding a better deal in a house, especially without forking over a big down payment.
When do you think Mom and Dad should start splurging on themselves and not worry so much about their kids?
After my twin and I finished college, that’s when my parents started living life to the fullest. They bought themselves newish cars, moved into a dream house out in the suburbs with big screen TVs in every room and a swimming pool out back. I tell ya, it was a jarring transition for me to watch because all while I was growing up, my mother had convinced me that the family didn’t have a lot of money and that we should make requests very sparingly. It was like for 30 years, they’d been holding themselves back on having a good life. With the babies gone, they could finally let loose and put themselves first for a change.
If you knew of a couple who seemed to be doing quite well for themselves, but their adult children were in various stages of struggling, would you think bad things about the parents?
Were they holding back or were you holding them back? B/c kids are not cheap, childcare alone can be very expensive. Housing in good school districts are more expensive than bad school districts. My parents were able to upgrade to a bigger house and travel more simply because plane tickets cost less for two people during off seasons. Not to mention most people get raises as they mature in their careers. A couple in their 50s would make more money than couples in their 20s.
How badly are adult children struggling? I know I would judge the parents badly if the kids were living off them still, with no income of their own.