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Hi HD community. I am a longtime reader and first time writer so please be kind with your feedback. The topic on my mind today is helping my adult children financially. I have read previous articles on the topic, but do not recall any addressing this specific angle. I am interested to hear your thoughts on helping adult children who, by virtue of their financial discipline and decision-making, are in very different financial situations. Simply put, one “kid” is single, has a good job, lives alone & rent free (in my 2nd home) and has always been very conservative with her money. My son is married, both earn a decent living, but like most young couples they are renting, spend freely and are therefore struggling to save for a down payment to buy a place of their own. I want to offer my help, but have some reservations. To date, I have always treated them equally from a financial perspective. I paid for college for both, a wedding for one and grad school for the other, etc. I also think it is fair to say that their financial situations are a direct result of their relationship with money and the decisions they have both made. For example, my son has been renting since he graduated college while my daughter has (so far) has lived rent free in one of our homes. I am a big believer in personal accountability and that you “sow the seeds you planted” which probably contributes to why my son has never asked for my help. Until recently, I have avoided offering assistance under the assumption that, like many of us, my son and daughter-in-law will benefit from figuring it out on their own. But lately, I find myself questioning whether I need to rethink my position. Is it wise to offer financial help to your kids or better to wait for them to ask? Is letting them “work through it” really the best approach? Is treating your adult children equally, despite their different circumstances, really being fair? I always appreciate the comments on this site and am anxious to hear your thoughts.
These are all good and thoughtful comments. We help our grandchildren by giving them good used cars when they graduate from high school and/or college. We’ve also given them enough money to pay for their first year of college at a good public university. We figure their parents can pay for the next two years, and the grandchildren can pay and borrow for the last year. So far that seems to be working for them.
I suspect many parents help their adult children in some manner. I was no exception. Helping can take various forms.
The children were groomed for technical engineering careers and schooled in critical thinking and various forms of independence, so it was no surprise that they decided to go to engineering school. If they had decided to go to in-state public colleges, I agreed to a free ride. However, they decided to go out of state. In that case they were responsible for a portion of the costs. They took out loans. It was a token amount, and I wanted them to see a portion of their post-graduate paycheck go to the education of their choice. It was to be a reminder of the consequences of their decision. One was able to get a partial scholarship, too.
The costs were high; one college was about $100,000 a year. When they graduated, I was nearly debt free, but I had suspended funding for my retirement for a few years.
Helping can take different forms. During college, I turned over a well-used vehicle to each. It was serviced, had new tires and brakes, etc. The vehicles were expected to perform with simple routine maintenance for several years, and did. They paid insurance, etc. Eventually they sold these and purchased something better. I got a portion of the proceeds.
When they graduated, I gave them each a “grubstake” loan. This was to assist them with rent and other necessary, initial expenses. All had good jobs upon graduation. I gave them lots of time to repay this. One took about 6 years and had to be reminded.
One decided upon an advanced engineering degree, paid for by his company. He attended school nights and part-time.
Today, all are in their 40s, are independent, have excellent careers, own their homes and have well-funded retirement plans. There were some bumps, and good jobs at stable companies can be difficult to find from time to time.
In fact, they are in better financial shape at their age than I was when I was in my 40s.
We are available for any reason, but the children take pride in their independence and accomplishments.
Why a grubstake “loan?” Why burden them with debt if it was unnecessary? Do they share their financial status with you now?
Upon graduation they faced the usual tasks. Find an apartment in the city in which they chose to live and work, provide a security deposit and so on. The point of the loan was to assure resources for these things until payday arrived. Alternately, I could have simply paid their bills and in doing so, promoted a dependency cycle.
The children had jobs upon graduating. That wasn’t the issue. As for “Why a loan?” Well, lending and repayment is what most of us will face, be it for a car loan, a mortgage or a credit card. They were adults and once they decided upon their school of choice, I made it a point to treat them as such. With choice comes responsibility.
In fact, the children had managed their finances throughout college. They had budgets and were expected to properly manage any funds they received. During college they all worked part-time, saved some and spent the rest. For example, one ran a painting crew during the summers. When they graduated they made a smooth transition into the work force, for which they had been prepared. None returned h