How much (monetarily) will you help your kids?

[GP_Matt]

My parents paid for my second year of University and let me live at home rent free with plenty of home cooked meals in the fridge to reheat. I also had a few Canada Savings Bonds from birthday money over the years that helped cover the first year. They also gave us some money for our wedding. (It was a simple wedding but large guest list written by both sets of parents)

I plan to max out RESPs for my son but we will see how that goes as live has a way of getting in the way of well reasoned plans.

[DoubleF]

After conversations with the wife and what I received from my family...

- Allowance will be very low up to grade 12. I expect them to get jobs to supplement the allowance. I'm literally thinking approx $10 a week. They will be fed and all necessities paid for, plus will have input into groceries, what else do they need cash for at that age?

One thing my parents did with me was to often offer to add 50% to what I put down on a big purchase. When I saved up $50 they would top it up to $75 for a birthday purchase of a game boy cartridge or something. After a while, being the sneaky kids we were, my brother and I often loaned each other money for video game and movie purchases while my parents then responded by completely quashing that top up deal forever. We were never paid for doing chores.

- We will set up a solid RESP for the kids. Minor living allowance while in school ($100-200 per month). Need more? Get a part time/full time job. Wife and I will heavily insist kids to do a co-op.

- Car? I will offer my borrowing power at whatever my rate is +1% to a max of $20k. I will aid financing. I am not adding to a down payment. IMO that just encourages them to buy beyond their means. Use the dealership's financing if it's better than mine, but I suggest you buy a $5,000 Civic on Kijiji rather than finance a brand new one. Their collateral on this "loan" would also tied into my housing aid (see below).

Wedding. Cash $10k. I will also generously add elbow grease.

House. Cash $10k. However, with my parents, what they did was charge me market rate rent + extra for food ($550 a month IIRC) as soon as I finished post secondary and when I bought a place, they gave me that money back for my down payment. I didn't get $10k cash from them or anything like that. I received a rent rebate for 8-10 months of living at home.

We will never openly offer cash to the kids for big purchases. We will pay completely for education, but for anything else, we're scrooges. We will pour generously into education, but Bank of Mom and Dad/Chateau mom and pop will be running a loan shark operation if extra money is needed.


Slightly off topic...
My parents also had a weird fear I'd get up to no good if I had excess cash lying around.

Within months of starting work, they booked me an appointment with an insurance broker and essentially forced me to buy whole life insurance. After seeing the rates that are out there now, I'm glad that I got a solid 5-6 year head start on it.

My dad also dragged my butt out to an investment broker halfway through post secondary (pre-online trading days) and matched a $1500 deposit I made. I promptly lost a large chunk of money on my investment choice. But after taking a tip from my dad, I made bucket loads years later after converting everything I had into a tech and bank corp which I dumped into my down payment on a place after I finished school.

[polak]

I'd always want my kids to have a better life than I did (which was a lot better than what my parents had). If I can't give them that then I won't have kids.

Stressing about money is the worst. You don't asked to be born and forced to grind out some menial existence working from the time you're 15, saving every second penny so you can check all the pleb boxes society tells us you have to check before you can finally retire when you're a tired, old person whose idea of fun is RV'ing through Colorado and eating crab legs in Halifax...

[Hack&Lube]

It all depends on the attitude, personality, responsibility, and initiative of the child. I know that my parent's help with my car, schooling, down-payments, etc. have massively contributed to my well-being and given me enormous kick starts in life that have led me to having opportunities to invest money I would have otherwise not have into wise investments and opening several small businesses in addition to having a professional job, home, relationships, skills, artistic abilities, etc. that I would not otherwise have.

Money in terms of "instilling an appreciation for hard work" and avoiding spoiling the child is a very black & white way of looking at it. It's not a "lesson" to teach. Money is an instrument to position your child in the most optimal starting point and advantages in life. I think that's a very cultural difference that I've always seen between Asian and Western families. That might explain why Asian families will spend enormous sums enrolling and paying for their their kids to get into all sorts of things so that by the time they are an adult, they have an advantage over their peers. I've always had friends who said they were put out at 18, paying rent to parents at 18, made to work summer jobs, etc. That's totally fine but honestly, aside from the value of "the lesson", if I have the capacity to pay for my child to have an education and spend the time enriching their life and knowledge and experiences rather than force him to flip burgers to pay me rent or pay his tuition, I'll always choose the former!

I've had friends who became depressed after highschool because they were forced to slave away at depressing pizza joints where their other friends were learning music, learning languages, going to foreign exchanges, making relationships, and having new experiences, etc. Those formative years are vitally important and that attitude of making them work and pay for everything on their own can be a serious waste of time and hold them back against their peers who are given advantages they weren't. The majority of part-time entry level jobs available to teenagers and young adults are a serious waste of time and don't teach them any valuable skills. I'd rather sit down with my kid and brainstorm an online start-up business or partner with them to do something actually meaningful and that generates a good return. Rather than the idiot manager at McDonalds teach my kid the value of hard work, I'm going to pay for their education in something and teach him them value of hard work myself.

All that being said, if my kid turns out to be a spoiled brat, it's totally my fault and I suck as a parent and I would send him to the Charles Dickens factory or to the army for sure.

Ultimately, every child is different. Some may respond better to the carrot or the stick and I can't predict what I would do until I get there but this is where my views generally lie.

[Hack&Lube]

Originally Posted by polak

I'd always want my kids to have a better life than I did (which was a lot better than what my parents had). If I can't give them that then I won't have kids.

Stressing about money is the worst. You don't asked to be born and forced to grind out some menial existence working from the time you're 15, saving every second penny so you can check all the pleb boxes society tells us you have to check before you can finally retire when you're a tired, old person whose idea of fun is RV'ing through Colorado and eating crab legs in Halifax...

LOL, this should be framed and put on a wall or put on a t-shirt.

[rayne008]

I would like to help out my kids with tuition and house down payments, but I don't see how I'll ever be able to - as it feels we are just squeaking by as it is. We have modest RESP and savings accounts, but that's about it.

And now as the kids get older, and September sports are starting, the bills are not going away. Swimming this and soccer that really adds up.

I got zero help from my folks, and having to work until 1am on weekdays in University just to eat really hurt my performance. Hopefully I can get my kids to live at home while they attend university.

[Dentoman]

Originally Posted by VladtheImpaler

All the way if they go to dental school.

Wish you would have been my Dad

[Cappy]

Originally Posted by Hack&Lube

All that being said, if my kid turns out to be a spoiled brat, it's totally my fault and I suck as a parent and I would send him to the Charles Dickens factory or to the army for sure.

Ultimately, every child is different. Some may respond better to the carrot or the stick and I can't predict what I would do until I get there but this is where my views generally lie.

I agree. I think the respect a kid has for his/her parents goes a long way to whether or not that kid turns into a little $%^%

[CliffFletcher]

Originally Posted by Hack&Lube

Money in terms of "instilling an appreciation for hard work" and avoiding spoiling the child is a very black & white way of looking at it. It's not a "lesson" to teach. Money is an instrument to position your child in the most optimal starting point and advantages in life. I think that's a very cultural difference that I've always seen between Asian and Western families. That might explain why Asian families will spend enormous sums enrolling and paying for their their kids to get into all sorts of things so that by the time they are an adult, they have an advantage over their peers.

There are definitely cultural differences at play. Canada has historically been very egalitarian, and the notion of using money to give your child advantages is looked at askance. Not only does it have the whiff of a class society, but it flies in the face of our notions of meritocracy. Canadian parents have historically been more concerned about instilling values and habits than in providing a material advantage, on the assumption that those values will serve a young adult better in the long run than money will.

Also, most of us do know people who were spoiled as children and young adults, and who ended up as lazy, dependant adults. Some people will always take the path of least resistance, and if their parents enable sponging, then sponging is what they'll get. And when the money runs out, it's too late at 42 to develop habits of thrift and discipline.

There's also the value of self-reliance. Many Canadians end up moving away from their families and hometown - far away - and starting their own families somewhere new, without support. When he was 20, my dad moved 700km away from his family. When he was 30, he moved another 2500 km away. The quality he needed above all others to sustain his family in a new province was self-reliance. There's a cultural belief that this kind of self-reliance is best taught in small doses when young, rather than crossing your fingers and hoping it will manifest at 30 when it's first put to the test.

Also, up until recently Canadian parents haven't had a lot of money or resources to pass on to adult children. My grandfather worked in a pulp mill. Keeping his family fed and housed was about the beginning and end of his financial capabilities. He couldn't have put up a down payment for my dad even if he wanted to.

However, most of this is changing, and Canadians are becoming more like Asians when it comes to families, class, and money. Even if we don't like it, and even if we won't admit it publicly, we're starting to recognize that family and inherited wealth will form the foundation of our children's fortunes as adults. And consequently we're seeing a class system develop in front of our eyes. On a positive note, we'll probably see multi-generational households make a comeback.

[Phaneufenstein]

Originally Posted by Hack&Lube

I think that's a very cultural difference that I've always seen between Asian and Western families..

I think this point also applies to Eastern European families like mine.

I came to Canada in my mid-teens and was shocked to find out that some kids in high school were already living on their own and paying rent.

I agree that providing a springboard for your child financially is what will contribute to their long-term financial success the most.

[bizaro86]

My parents paid tuition for school (but not living expenses) and bought me a car that was older than I was. (Filling the tank taised its value by 50%). They also cosignes and covered a downpayment. That allowed me to buy an entry level place about three years earlier than otherwise. Given that the three years in question were during a boom, that boost gave me a big financial head start. I plan on doing roughly the same for my kids.

[snootchiebootchies]

Originally Posted by GP_Matt

My parents paid for my second year of University and let me live at home rent free with plenty of home cooked meals in the fridge to reheat. I also had a few Canada Savings Bonds from birthday money over the years that helped cover the first year. They also gave us some money for our wedding. (It was a simple wedding but large guest list written by both sets of parents)

I plan to max out RESPs for my son but we will see how that goes as live has a way of getting in the way of well reasoned plans.

Ditto on almost all points. My parents helped my out with my first year tuition and room and board. After the first year, I paid the rest of my way with internships and helping out as a research assistant for professors. I also purchased my first car outright with cash from my scholarship. My parents wanted to help me out but I always declined their assistance since I felt I could handle it myself. I came back to Calgary for grad school and again paid my way through with scholarships and working as a TA but stayed at home rent and board-free (my mom packed my lunch everyday -- which as someone nearing 30 was embarrassing but I could not turn it down). The only other time my parents helped me out was paying for the banquet at my wedding but I gave them all our cash gifts in return so I think they were nearly reimbursed.

I'm hoping my kids will want to do it themselves like I did but the cost burden of education is much greater today than when I went to school (and getting increasingly burdensome). So I've opened RESPs for both of them and I hope it will be enough but I'm prepared to help more to educate them because costs have become so outrageous. My wife doesn't agree with my plan as she got quite a bit of financial help from her parents and her older brothers. I told her I'm willing to help more but like Hack&Lube said, it will depend on the responsibility and attitude of my kids. I will certainly help if they are struggling despite trying to do the best they can.

[Tacopuck]

To preface my family is well off enough to live an easy life but definitely not 1% money (upper middle).

I got a job and worked all though high school based on my own decision to work as i wanted spending money (which my parents supported fully). Any money that I received from grandparents or any other monetary gifts my parents strongly suggested (but never forced) that i invest in stocks, which I did. I'm glad they got me into investing so young.

My parents started to pay my university tuition (but not living expenses) for my first two years at which point I started paying due to someone in the family getting cancer which required some expensive drugs that weren't fully covered. The caveat to my parents paying the tuition when they did was if i failed a course i would have to pay them back for that (I never failed a course). The remained of tuition was paid via student loans. I paid for my living expenses by working summers and investments made while i was in high school but i never worked while i was at university.

When buying my first house I saved all of the down payment and after the deal closed my parents gifted me some money for some furniture and money for reno's which was never discussed but greatly appreciated when they gave it to me.

When i have kids I'll probably do something along the same line, let them have a little bit of support but put the responsibility on them.

[bizaro86]

I would add, I have always liked the plan of charge rent and then gift them the money at some significant life event. I would probably do that, and would definitely do so if they weren't going to school (ie working) and living at home

[Addick]

While I believe it is important for young adults to learn about finances (e.g. prudence, planning and responsibility), I also believe it is important for them to get the most out of their education. Learning about finances can take place before or after a post-secondary education and I'm planning on providing my children with the opportunity to concentrate on their academic studies. In my mind, a student looking to make ends meet is just or more likely to not spend enough time on their studies as a student being financed by someone else.

[calgarywinning]

I am under the impression that one visit to Scotiabank can set all of this right, because you are richer then you think.

Presto you saved 14$ a month which can go towards your childs bleak, bleak, dark future.

[GGG]

Originally Posted by Addick

While I believe it is important for young adults to learn about finances (e.g. prudence, planning and responsibility), I also believe it is important for them to get the most out of their education. Learning about finances can take place before or after a post-secondary education and I'm planning on providing my children with the opportunity to concentrate on their academic studies. In my mind, a student looking to make ends meet is just or more likely to not spend enough time on their studies as a student being financed by someone else.

I would stongly disagree with this. I never met a student who under performed because they worked to many hours. The students that under perform are the poor time managers and the ones who party too much or don't attend class.

That student killing themselves to be there also has the incentive to get value for the investment they are making compared to someone who is financed.

[polak]

You think you're raising a well rounded individual if all they do is go to school and work?

[GGG]

Originally Posted by polak

You think you're raising a well rounded individual if all they do is go to school and work?

I don't think I said that. I said I never met anyone whose grades were affected as a result of working in response to the previous posters reason for paying for things was to give his kids time to focus on academics.

As for being well rounded I would say a service industry job is superior to any extra caricular activity in developing empathy for people, and dealing with difficult people in stressful situations. It also depends on what you mean by well rounded.

[csnarpy]

I received nada with any living or educational needs. I ended up serving this country for 7yrs - saw and lived Europe, saw the best and worst things about war. Then went to school on my own dime.

Except for war, I would love my kids to experience almost everything I did. My wife and I have invested in a segfund life insurance for the kids that allows the kids to withdraw funds after 20 yrs of payments. It ends up being a trust for the kids, they can use their money for school or living or whatever they need.

I would give everything to my kids but I feel they need to have it a little "rough" to gain perspective and responsibility. But, they will have education funds if nec. I hated my student loan and wouldn't wish that burden on any young adult.

The best thing, once 20 yrs of payment are in, they'll have the insurance for life. Not another dime needs to be deposited but they can keep adding to it to increase the policy. It's up to them.