Your post made me chuckle. My in-laws did pay for their kid’s undergrad educations…except for the two kids who were married when they went back to college. They did give tuition money gifts, but let’s face it, they didn’t contribute towards room and board, or books or anything else. Which was fine.
But the part that made me chuckle was about college funding possibility for your kid. All we ever asked for from our in-laws for our kids was ONE chest of drawers. In-laws had seven of them. Five were lining the hallway (I’m not making this up). We thought we were doing them a favor by taking one away. They said NO. Oh well. So…we bought a chest of drawers instead.
I have an only child and would like her to enjoy my gifts while I’m alive. She got her first major gift upon graduating college, which is enough for a house down payment. I plan on paying for her wedding and honeymoon, paying for her and her eventual family to vacation with us, furnishings for her first adult apartment, down payment on a house when she’s ready, and 529s for any grandkids.
One of the things I learned from The Millionaire Next Door (a pop business book with some real wisdom) was that it is unwise to subsidize your children’s daily/weekly/monthly expenses because they then never learn to adjust their spending to be less than their income. On the other hand, I think it is fine to help with a down payment but make sure that they are responsible for the mortgage and other monthly expenses plus repairs etc. I would be much more careful if I didn’t believe the kids already were financially responsible.
I would extend this to certain other one-time gifts. For example, ShawD is a primary care provider (family nurse practitioner) who was the medical director of the clinic she worked in. She decided to move back from the West Coast and is starting up a new clinic for the same company near us. She packed up all her belongings with ShawWife’s help and gave them to the movers. Between the West Coast and our house, the moving truck had a fire (in the parking lot of a warehouse in Philadelphia). All her clothes, shoes, furniture, … . She estimated a value of about $55K and so is fighting with the carrier’s insurer but will probably be about $25K to $35K short as she didn’t pay for replacement value insurance (she was imagining damaged furniture and not a truck getting torched). We are helping her rebuild. [Also, a number of our friends are moving and have been happy for her to shop in their basements]. But, we are happy to make a one-time gift for this purpose. When she broke up with her BF (which preceded the decision to move back to the East Coast), I sent her a plane ticket to come home for the weekend. But, once she is set up, we would expect that she will pay for all of her living expenses and save money (which she has been doing).
When the kids were younger, I would hire them to do a little work for my company and pay them and put it all in Roth IRAs. They now max out funding for 401ks. ShawSon hasn’t been eligible for Roth contributions but until recently, I think ShawD may have been making them.
My parents were both children of immigrants who came to the US with nothing. Both grew up in the Depression and and both were frugal, but my father was clearly quite affected by the experience and always made choices for certainty over risk. Both parents were careful with money. We rarely ate out. If we went to the movies, we would never order popcorn or drinks. Vacations weren’t fancy. etc. But, my parents did not stint on paying for education – they paid for all four kids’ undergraduate education and for law school for my sister and maybe a teaching masters for my musician brother. My other sister’s and my PhD’s were funded by our grad schools.
My wife and I picked up a fair bit of that frugality but one of my priorities was to have my kids finish school debt-free. I will be transitioning our 529 Plans for the kids to be used by their kids and will start funding them pretty soon (neither of them has kids at the moment).
We paid for our kids college educations and they were very happy with that. We haven’t really been in a position to do much more other than fund our own retirement which had some catching up to do after college.
It was quite a struggle honestly paying for college, keeping up with our retirement. We have had quite a few years where we haven’t gone on any vacations but concentrated on not accruing any more debt and paying down some of our expenses. I know that our financial situation is very different than many here. We are doing quite well and are not worried.
Now we are worried about staying ahead and not spending too much in retirement to fund much for our children. They are fine as they are doing well.
My parents lived a good life in retirement unfortunately after my dad passed away, he didn’t really plan on what my mom would do. She’s slowly running low on her money but is getting by. Not much extra.
My in laws are very frugal. They have saved and pinched pennies and will never change. They have amassed a nice sum. They paid for their children’s college but we never went on a vacation they paid for. They’ve never helped our kids and normal not extravagant Christmas presents.
My family has been careful savers and modest income. The other family with my in laws had much more income and their children had everything they could ever want. The way we raised our family was very different and mostly because of income disparities.
My in laws decided to gift the grand kids a modest sum 2 years ago. My kids immediately called and thanked them for their generous gift. They’ve called the grandparents when they’ve sent gifts.
The other grands kids never call to thank their grandparents either for an unexpected gift or for their Christmas gifts.
There will be no more gifts because the grandparents aren’t being thanked. I have a hard time keeping my mouth shut.
Through the course of a lifetime of having children, availability of cash for wants or needs changes.
I would have loved to have given our kids the gift of paying for all of their college education! At that time, with three of them and our income we could not do it. They could have made different college choices where they might have had no or little debt but we sat down with each of them and shared what we could cover and then what they would have to borrow and all three decided to go a route where they would have some debt to be at an Ohio private. They had our $$, scholarships and then some tuition costs for loans. We also covered their clothing, gas, incidentals, etc. They all worked late in high school and college as well. As a family, we all worked hard!
Post college paying finds us in a little different position $$ wise. Maybe because we aren’t paying college costs! So now we feel a little more free to help out or fund where and when we can or want to. It’s certainly not unlimited!
Such is the circle of bank account life. Ups and downs.
We created investment trust accounts for each kid long ago and at age 25 gave it to them. We paid for college so no student loans. The account was an instant nest egg for whatever they needed. My D used it for downpayment on a home (and since parlayed that into a bigger nicer home). Son hasn’t used his yet for any particular item (but probably will for a house later). Both know how to invest and save (and not afraid to ask advice). And especially stay out of debt.
My parents when I got married gave us $750 as their gift (pretty much all they could afford–which back then was quite a bit). No student loans for H or I (back then you could actually work to put yourself through school). We used that as our nest egg and rainy day money. We borrowed and replaced that money for years even as we progressed. Such a great gift.
With D’s first house we helped some with the fix-up to get it in shape. Her second house she “googled” and “youtubed” it–replaced baseboards, painted, built stuff. I am so impressed I need to go to the “bragging thread”. All she said is “I saved a ton of money!”
My ILs have always favored being more showy about their gift-giving for my kids. They always opted for the immediate gratification of elated kids. As an example, at birthday or holiday time, there was always a stack of (relatively) extravagant items for kids (designer clothing, Apple products…). They have never, ever offered to help with any expenses (e.g., camp or college). In my mind, these are lowercase g gifts.
My parents, on the other hand, have always been very generous behind the scenes…birthday gifts for the kids always more modest but then they were putting $2000 per year away into a college savings account. The year my H was undergoing cancer treatments and I thought it would do my D24 good to have an extra 2 weeks away at camp, they offered to pay for it. They helped pay for experiences, or what I would consider uppercase g GIFTS.
For the longest time, my kids only saw that one side was “so generous”. Holiday time at one house was more excitedly anticipated because they knew there would be a stack of things from their wish list there. gifts!
It was not until it was time for us to have the college finances talk with D20 and she became aware of the savings account the other side had stashed for her that she really could appreciate what had been going on behind the scenes. Her other grandparents have given her a GIFT
If asked, I’m not sure if my kids could actually name many of the gifts they have received over the years from the one set of grandparents. Although they were “must have” items at one time, they have long been forgotten. I know that my kids will always remember and be thankful for the sleepaway camp experiences and debt-free college education - the big GIFTS.
I hope to do the same for my kids (future grandchildren). GIFT when I am able.
I appreciate this post, because my kid is still a teen, but birthdays have been a bit of an issue for the past few years. We always have a nice meal out, but presents are harder to do well. Anything needed that we can afford is paid for as we go, mostly for education and lessons. Gifts are harder to figure out because we don’t wait for birthdays to get something special (new sports equipment, clothes, whatever). I tried jewelry once, but it’s not really worn. In fact, inexpensive items with dog images on them have been the most durable gifts.
Hopefully as my kid gets older, gifts will be appreciated but the GIFTS will be remembered and paid forward.
I like the upper case GIFT versus lower case gift. This is what we have done with our kids – experiences versus material goods. The grandparents did a big favor to my kids. When my FIL passed away , his Pension went to the grandkids and was put aside to help with college. My parents also provided to a 529. My kids were GIFTED an undergraduate education.
Now that they are “Adults” we still help out. We will be visiting S19 and will do a grocery run for him. D17 is back at home for now, and we provide food, and I pay for stuff when we go shopping together. Both kids are very budget conscience.
If we take a family vacation of course we will pay. I will also pay for them to visit their grandmother (who is the only still living grandparent). Going forward for D, yes, there is that wedding thing. We will make sure its fair to S.
Oh we did “gift” them money towards their first car. For D, we provided a car that was worth 10K and for S, we just put a downpayment on a car for him.
Growing up my parents were always generous to me and my sibling; they would pay for meals when we visit. helped out here and there with downpayments, etc.
This is a great opportunity to teach investment. Here’s the new video game you wanted. “But for your BD GIFT x amount dollars have been put into x account” for your future. What is that account? What was it last year? Why in that account?
I know this is about gift giving but knowledge can be the best gift.
Friend of ours (pretty much rich by most standards–and self made) actually put together materials and taught a class on investment for the benefit of his kids (required attendance lol). He included SO’s and any of their friends that were interested.
Very good point! I’ve seen it go badly, when parents help with something like a house purchase and the kid can’t really afford it…or they subsidize a lifestyle that the kids can’t afford. It really doesn’t end well. We know some friends who gave their kids a down payment for a home…the kids lost their house, because they couldn’t pay the mortgage. If people want to help with that sort of thing, you gotta make sure the kids can pay the mortgage…
If someone starts a thread about radically irresponsible BILs/SILs, I will jump all aboard that crazy train. I am spending way to much every month on my wife’s 2 brothers, both in their 50s, who would likely both be homeless without our support. You can probably tell this is a point of contention between me and my wife.
This also bleeds over into the point of this thread. My wife and I got both of our sons brand new Honda Accords late in high school with the statement that this car will get them through their undergrad college years. This is the only car they will ever get from us. We also assured them that they will graduate from undergrad debt free and we will do what we can for grad school. Money I would like to spend on grad school, or other future assistance for my sons (down payments on homes perhaps), is being gnawed away by their alcoholic uncles. I truly don’t know what to do.
Bit off thread but I kept looking at “great houses” for my D first out of college that were within her stated price range. Then I looked at the tax bill that came with them…not a chance.
They are ‘adult children’ in the truest sense. Spoiled by their parents and conditioned to feel that the deck was stacked against them because society has it out for white males and it is impossible for them to succeed in this country. One has a Bachelors & MBA from a school we would all love our kids to attend, and outside of some brief retail stints here and there, he hasn’t drawn a regular paycheck in close to 20 years.
Start a thread. I’m sure you aren’t the only person who is on the crazy train. And maybe somebody actually got off it (love to hear it) and can offer advice.
Just know it’s going to veer somewhat into wills–nobody wants to give money in their will to the crazy train.
This also relates to drug addicted adults who can’t be responsible with money or just those who plain are never going to be responsible ever. Or married a gold digger. Ugh.
My parents grew up poor. Dad was oldest of 7 and no chance to go to college. Worked in a trade his whole life. Mom wasn’t much better off maybe worse. She has gotten her nails done 4 times in her life. I just finally convinced her to get a cleaning person because she just can’t do everything. Mom & Dad did things right. Both had jobs with pensions and never moved from the house they bought in 1971. Dad has passed. Mom probably spends 30-40% of what she gets from her pension and SS. She has saved up a nice amount of money. Not a million or anything.
My wife had a similar upbringing. Father was in the trades. Mom stayed at home. That being said when we graduated together from college we were about $60-65K in debt. We lived poor and paid off the loans. My wife stayed home with my girls and has just recently got back into a decent level of compensation. She did work some before that. She went back and got her Masters to get to the next level.
We never got much from our families. Growing up family vacations weren’t really a thing. Never got on a plane until I was in college and an Aunt let me use some miles. My folks never gave us money to fly to see them. We didn’t go often once the kids were around. And when we did we drove.
My Mom has started to gift my brother and I some funds each year. It has come in useful.
For my girls my oldest will get through undergrad with no debt funded by us and scholarships. I am hoping my D23 will be able to do the same. Both girls work jobs. D19 quit sports senior year of HS and busted her butt and started college with a nice sum of money. I know my girls know the value of money as they have to pay for certain things themselves. D19 pays for her books at school. She also pays her sorority dues. They don’t expect a big vacation each year.
My wife and I are in a better position than our parents were. My girls are setup better than we were. That is what you can do generation to generation. Generational wealth is real and many people who have it don’t realize the impact it makes in their lives.
I love this post. Big thumbs up to you & your family!
I think that a huge part of building generational wealth is passing the knowledge you’ve gained about finances, money-based decision-making, etc. onto your kids. Teaching them HOW to figure out whether a decision is a good bet financially or not.
