Parental financial help for adult children...

[Sliver]

For adult kids who accept money from their parents for "life extras" (vacations, fancy cars, houses above the station you yourself have earned, aggressive savings, etc.), do your parents just slide money into your bank account? Do they give you a cheque? Are you their "employee"? Is there some other way?

I think the ways it has been to your advantage are obvious, but in what ways do you feel it has not been to your advantage to accept the money? Does it make you feel like a child to get money from your parents? Do you think they would be more proud of you if you said "no thanks, I want to do it on my own"?

Has anybody ever been offered money and turned it down in order to do it on their own?

Do you think it feels better to do something on your own - say buy a starter home with your own money versus buying a move-up or estate home with parental help?

I didn't accept much help from my parents growing up (paid for my own car, paid to move out, paid to travel, etc.) in spite of their willingness and offers of help/money; however, they did pay for my university education, so it's not like I can get too high on my horse.

Now as a parent, I really want to be able to help my kids buy their first house, pay for their schooling, pay so they can travel more than I did, etc. So I'm kind of doing a 180 now that my kids are getting older - I used to kind of think adult children who accepted parental financial help to holiday, buy cars, etc. weren't "real men" or were "spoiled" (and I still do to a degree in some situations), but I think there must be a happy medium where kids and young adults can earn a sense of self worth, pride of ownership, etc. by doing things on their own, while still receiving some help to do things that they wouldn't be able to afford otherwise.

Anyway, I'm in the process of reworking my philosophy on the whole thing. If anybody wants to discuss this, let's do it. Would love to hear other thoughts on the subject from kids and from parents.

[pseudoreality]

I got about $1500 total in help from my parents throughout my university and felt really bad about it. I then got an old beater vehicle as a graduation present worth about $1000. I feel like that's what I might do with my kids. I wouldn't pay for vacations though. No need to give them expensive tastes. Help them when they need a hand for a step up, but that's it.

My parents are now both retired and have offered me an interest free loan for house upgrades, but I've turned them down. I know my siblings have received help for house down payments.

Sent from my Galaxy Nexus using Tapatalk 2

[GP_Matt]

I received money from my parents twice as an adult.
The first time they told me that they would pay for my second year of University. I think they just paid the school directly and bypassed me.

The second time they offered to help out with my wedding. The in-laws were paying for the hall and food and my parents were going to contribute a similar amount to help with the other expenses. For the hall/food the in-laws paid the hotel directly while my parents wrote me a check for the other stuff as it was all small little things and would have been a pain to give them all the bills.
Help with a wedding makes a lot of sense to me as a big chunk of the guest list was written by the parents and we were not at a place in our lives where we could afford to host that many people.

I think it would have been weird for my parents to help me out with something non-essential that was for my enjoyment. I think if you do it, it makes more sense to plan a vacation and invite them with the understanding that you will pay for all or a portion of their trip. Giving them cash to travel seems odd to me.

As a student though I doubt I would have turned down the money.

[AltaGuy]

One thing I've noticed, as someone who has done a fair amount of education, is that the "spoiled brats" are the ones in all the graduate programs, who end up with most of the better jobs - which seems to defeat the myths around "doing it on your own" etc.

It was absolutely astounding to me when about three quarters of my law school class had no student loans about six months after graduation because either their parents had paid them off, or they had none to begin with. This was on top of vacations, cars, houses, and many other things paid for by many of their parents.

I'm not sure where I'm going with this, but I think the expectations of these kids' parents have a lot to do with it. The kids are certainly not lazy by any stretch of the imagination, and they are expected to achieve a certain level of material and personal success and it seems that they mostly do.

I suppose what I'm saying is that you can pay for whatever you can for your children without worry, but make sure you have accompanying high expectations of them. Also, try to help them leave as many options open as possible by helping with debt, etc.

Law school was really an interesting experience to me in this regard.

[Cowperson]

As someone who deals with high net worth individuals I can tell you the general philosophy seems to be parents will 1) take care of themselves first and 2) they will not waver from that thought, even if it means a lesser estate or no estate for their kids.

However, if the parents are in a position in life where they have ample excess assets, they will start gifting those excess assets to children prior to their demise, but only to the point where they are not jeopardizing their own security.

I don't often see parents sacrificing to help adult children make ends meet. I occasionally see adult children trying to pressure parents into giving up money. I've seen a few cases of adult children bullying parents for money.

Cowperson

[GP_Matt]

Originally Posted by pseudoreality

My parents are now both retired and have offered me an interest free loan for house upgrades, but I've turned them down. I know my siblings have received help for house down payments.

Sent from my Galaxy Nexus using Tapatalk 2

That is a good point too. Helping one sibling and not the other will most likely breed a bit of resentment, even if the other sibling doesn't need the help.

[East Coast Flame]

My parents are quite well off and were very generous to me, so it has been a definite effort to ween myself off of their support as I grew up.

I had my university paid for by my parents, which I am extremely grateful for.

These days, the only time I accept anything from them is when they buy me plane tickets home for Christmas(they live on the east coast). Otherwise, I probably would stay out here.

[corporatejay]

I guess a lot of it depends on what its for.

On the holiday issue, let's consider this for a second. (this is a future hypothetical)

I'm in my 50s and my wife and I want to go to Hawaii with my son, his wife and kids for christmas.

My son clearly can't afford it but it would mean a lot to me for us to spend this holiday together since I get to see my grandchildren etc... Why wouldn't I pay for that if I have the financial means to do so, it is after all, for me.

I see this totally different from "Hey son, here's 10 grand, go to paris".

[Puppet Guy]

A little over two years ago my parents sat me and my sister down and told us that they're willing to help us financially when we need it. A few months after that I hit a dry spell at work and needed a boost so I could make a mortgage payment on time and my dad spoke to me like I was an irresponsible teenager. That was the last time I asked for help, and it'll be a cold day in hell before I ask for his help again.

[bizaro86]

My parents paid for my university degree, the portion of it that wasn't covered by scholarships. They paid it directly. They also helped me out with a downpayment/cosigning on my first house (definitely fit the definition of a starter home). Subsequently, I turned down them paying for trips (Hawaii for Christmas with extended family) that I couldn't afford at the time, and so didn't go.

I think it's worked out reasonably well. A bunch of my financial success wouldn't have been possible with student debt/without my first house, but I've definitely worked for it as well. I think it probably depends on the person, whether they'd just take the money and coast or not.

[Phanuthier]

I don't have the link handy, but I recall a few articles saying cost of living (rent, food, school, etc) is harder this generation then last generation. As AltaGuy said above, as long as the kid is working hard, its a lot of pressure off a kid to get help from their parents. Not so much in Canada, but in the USA, going the "cheap way out" via education, insurance or even food can be detrimental long term.

So, in that respect - School: yes. House? No (or loan for down payment). Vacation? No. Car? No. At least my opinion.

[Derek Sutton]

I grew up on a farm, we were not poor but not really well off either. My parents never were not really able to help out 4 children untill we were all grown up and they were able to sell their farm and made out like bandits . Anyways as a way avoid some income tax at the time, us kids were "paid" a good chunk of money which we had to claim as income. We were all working Joe's by then but really appreciated the money and therefore used it sensibly. I used mine for a down payment on a house and my two bothers paid off their vehicles etc... We all looked at it as money we earned while we were growing up, yet was not available at the time.

[CaptainCrunch]

By the time that my parents had put my kids through school there was nothing left for me money wise, plus at the time my dad's relationship with me was completely toxic and we wouldn't bother making time for each other.

When I left the army and returned to school I was fortunate enough to be able to afford it with some generous donations from the federal and provincial governments. I took a great deal of pride in being able to pay those off.

When I was a teenager and wanted a car, I was given the choice of split costing with them but I would share the car with my mom and with my sisters, or I could find a way to buy my own car and insure it and gas it, so I worked paving in the summer and bought the crappiest cheapest car possible. But again there was a certain point of pride that I didn't need help.

My mom tried to help me out in school under the table, but it wasn't much, my parents had lost their business and their retirement savings in the great hate of the NEP program, but I made sure I paid them back.

I think that its great that you want to give a helping hand to your kids, its actually very admirable.

However there's a definite tough balancing point.

A leg up is sometimes not a leg up, its actually an ankle chain.

A assist on a down payment on a house is fine if they are ready to buy a house. To me its a point of principle that a kid saves for his damage deposit and that indicates that they are mature enough and smart enough to buy a house.

A leg up on an expensive car to me is really stupid, same with an expensive vacation or a travel around the world. There's a sense of accomplishment to earning those things and taking the time to make it really special.

I have a cousin who's parents bought them nice cars and houses and trips, and it actually in the long run really devalued these milestone events.

Just my 2 cents

[mykalberta]

My savings/work and student loans paid for my education. My parents cosigned and gave me a 10K downpayment for my condo - which I repayed. At the time of purchasing the market was on the upswing and I only qualified for 225K on my own.

They are also funding 1/3 of my future wedding. 1/3 my fam, 1/3 hers, 1/3 us - of course that really isnt free money as I wouldnt be having the type of wedding I am if I didnt feel the obligation to invite some more tertiary relatives.

Other than that the standard birthday/christmas present has always been cash ever since I was 16. I havent lived at home since 18 when I went to school so I cant speak to that.

[Phanuthier]

Originally Posted by Derek Sutton

I grew up on a farm, we were not poor but not really well off either. My parents never were not really able to help out 4 children untill we were all grown up and they were able to sell their farm and made out like bandits . Anyways as a way avoid some income tax at the time, us kids were "paid" a good chunk of money which we had to claim as income. We were all working Joe's by then but really appreciated the money and therefore used it sensibly. I used mine for a down payment on a house and my two bothers paid off their vehicles etc... We all looked at it as money we earned while we were growing up, yet was not available at the time.

smart thinking... pretty cool

[GrrlGoalie33]

I take a lot of pride in being able to financially support myself. There have been times where I have leaned on my parents for help as an adult (emergencies), but I have always paid back every single penny.

My parents have helped both my brother and I get our first houses. They loaned us the money for our down payments, which we had to pay back. The one they gave me was on a line of credit, so I had to pay interest. They also co-signed on both of our mortgages the first time.

When I look at some of my cousins and how reliant they are on their parents, I am so glad my parents raised me to be a proud and independent woman.

[Maccalus]

My Parents covered my Tuition and let me life rent free at home through University. This allowed me to graduate debt-free. They also let me live rent free at home for a year while I saved my down payment for my starter home. They have never covered my phone, bought me a car and only covered vacations for family vacations.

I think my experience is relatively average for a person my age (26). Some of my friends have had more covered, some have had less.

[The Yen Man]

I have Asian parents, so naturally they helped me out with part of my university education. I already bucked the norm by getting a part time job halfway through my degree and paying for the rest myself. I was alo able to live for free at home throughout my university years. Heck, I was also able to live at home after I graduated and only paying them $500 a month. That essentially helped me save my 20% downpayment for my house.

I can honestly say I don't feel bad to admit my parents helped me out financially. Not sure why that makes me less of a man in some people's eyes, but meh, it's not like I care how they see me. All I know is, I rather be in my financial situation right now than I would be without their help.

[Derek Sutton]

Originally Posted by Sliver

Now as a parent, I really want to be able to help my kids buy their first house, pay for their schooling, pay so they can travel more than I did, etc. So I'm kind of doing a 180 now that my kids are getting older - I used to kind of think adult children who accepted parental financial help to holiday, buy cars, etc. weren't "real men" or were "spoiled" (and I still do to a degree in some situations), but I think there must be a happy medium where kids and young adults can earn a sense of self worth, pride of ownership, etc. by doing things on their own, while still receiving some help to do things that they wouldn't be able to afford otherwise.

Anyway, I'm in the process of reworking my philosophy on the whole thing. If anybody wants to discuss this, let's do it. Would love to hear other thoughts on the subject from kids and from parents.

I think you need to start early, reasonable chores and an allowance. A portion of their allowance goes into savings, a portion into education fund and the rest is theirs. Make them physicaly put the money into separate accounts, or online transfer it anywyas. Say $80 a week, $20 into savings, $20 into education and $40 for spending. Just thorwing some numbers out there, I don't know what it costs to be a kid these days but I learned so much from being my own banker since I was 10 yrs old or so. This way you are really helping out long term in that they will have money saved that they earned, money to spend as they see fit and a basic understanding of how to save money and to not spend every last cent like most kids do when they have a $20 bill.

I have heard some cases where parents give a huge allowance and then take all the deductions off of it such as tax, utillities, rent, transportation etc... (you know like real life)and leave the kids with about $20 for the week and they just let them blow $20 on any old thing. I believe that does not teach them to save money or pay themselves first, just that you have $20 to get you through to next week

I don't know how old your children are may its a bit too late for this.

[Discoste]

Originally Posted by Sliver

Now as a parent, I really want to be able to help my kids buy their first house, pay for their schooling.

Obviously there's a range of how much help. I like the approach of lessening the burden. Parents helped me for the first 2 yrs of Uni offering to pay for books and supplies. For the house, I would buy some of the bigger ticket furniture items. That way they'll still have the hard lifting of "doing it on their own".

Nothing wrong with giving your kids the opportunity to succeed. Wanting to pay for Harvard? - that's cool. Buying them a Range Rover? - that's a bit of the silver spoon.