I recently read an article in my Twitter feed entitled “How to get your parents to buy you a house as an adult” from FinancialSamurai.com. It, and the expectations of extreme parental support, really bothered me.
The message given to millennials? Be really nice to your parents so they will support you and buy you stuff now, rather than waiting to inherit what is left, and feel good about it. Seriously?
This doesn’t do much to combat the stereotype of the entitled millennial. It doesn’t say much for baby boomers, either!
Personally, I’ve always felt that supplementing an adult child’s standard of living may not be helping them lead successful lives in the long run. How will they cope if the money stops?
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My family is not like those in the article. My husband and I don’t keep score over who calls or who says they love us. While our kids know we are here for them if they need help, neither one expects handouts.
We do keep score in one sense. We aim to keep a relative balance in the total amount of support we have given our children since they turned 18.
Does this mean the two kids get the same things? Do we keep a spreadsheet? No. But we strive to be fair.
We weigh every decision to pay for things with this balance in mind (pun intended!).
When I was growing up, each child got the same gift for the same milestone, like a stereo for high school graduation, and a car for college graduation. My parents were able to pay for our undergraduate and graduate education. When I happened to get a scholarship and stipend for business school, they helped me out with rent instead. In hindsight, this had a strong influence on how I raised my kids.
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We worked hard to be in a financial position to put our kids through college and graduate school, as my parents had. Although for us, it took two full-time salaries. To their credit, both kids ended up with full merit-based scholarships to college. And both worked over the summers for spending money. But that is where the similarity ended.
Our older child took out student loans to cover room and board, which we paid on her behalf while she was in graduate school. She used her college fund to pay for graduate school, but we paid her living expenses for those three years.
With her first job, she dutifully made contributions to her 401(k). She paid off her student loans and saved enough emergency funds to get her through the income interruption of two moves.
She recently allocated 100 percent of her raise to her 401(k) and lives on the same income as before the raise. She didn't need too much parental support to get her off the ground and rolling.
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Child #1 has successfully launched.
Our younger child received more aid and didn’t need much extra support as an undergraduate, so he didn’t need to take out any loans. He is now working toward a Ph.D in engineering, and he pays no tuition for graduate school.
His stipend covers the majority of his living expenses. He has some college savings left to supplement his income if he chooses. This is how he finances things like computer purchases.
Could we expect him to live only off his stipend? Perhaps, but for now, we pay for his car insurance, his health insurance, and any health care expenses, as well as the occasional major car repair.
He is responsible for covering everything else without any parental support. He even puts money in a Roth IRA! While we may question some of his financial decisions on the margin, it is part of his learning process.
Why do we still help him out? The first reason is the scorekeeping — his sister had to pay for grad school and didn’t have a stipend, so we are getting off easy here. We also don’t want him to skimp on insurance or health care.
Finally, I have learned from my line of work that financial stress interferes with academic success. There is no reason to burden him with that if we can help. I’d say child #2 is almost ready for liftoff.