Giving to Adult Children

Parents Forum Parent Cafe
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My arrangement with my parents before and upon graduating from college was that they would lend me money when I needed it and I’d pay them back later from my job. Similarly parents in law lent us money for part of the downpayment on our first home and we paid them back afterwards with interest. But later on when my parents were better off in retirement they would take the whole family on vacation (mostly cruises which they really enjoyed) and pay for food whenever we went out. They also gave money to each grandchild to help with college costs.

We’ve done something similar with our kids: they have a certain amount in 529 money plus money they’ve been given by grandparents etc over the years, managed by us (we credit them with interest). We added to that if one kid gets something the other doesn’t (eg one took our old car, so we credited the equivalent value to the other kid). Likely the same will happen with weddings etc. They can withdraw from the bank of mom and dad when needed (and we’ve pushed them to do so for things like Roth IRA contributions). But we also let them use our hotel points and airline miles whenever possible for trips, job interviews, relocation etc. And the expectation is that we pay when they are with us and we eat out, travel, etc.

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My wife and I may be the first in either family to have money to leave to our child. My parents have nothing to leave us because of multiple disruptions in their lives, my grandparents were immigrants, and my wife’s grandparents lost everything in Stalin’s purges (two high ranking decorated Jewish officers), and her parents immigrated from a collapsing USSR with almost nothing.

It looks that our retirement benefit should be more than enough for us, and I don’t see us retiring for a long time (there is an overlap between what we do for a living and what we enjoy doing). We also have a bunch of money, because of our daughter’s scholarship.

However, our daughter really wants her independence. She had an internship in Chicago over the summer, and, because she was getting paid, she insisted on paying for everything herself, from rent to groceries to transportation. Not because she needed to, and not because there were any strings or requirements attached, but because she wanted to be self-sufficient. She also has very good spending habits. In general she lives frugally, in large part as part of the widespread Gen-Z philosophy of “no-waste”. So thrifting, buying second hand, recycling and upcycling, and much more. This is what she likes to do, and does so even when we offer to help her buy stuff, so it’s unlikely that it will change once she lives on her own.

She’s going to grad school after finishing college, and will likely be self-sufficient as a grad student. We will be generous with as much as she will accept. I’ve told her that, since she is our sole heir whatever we can afford to give now, she can either get now, or inherit it when we both die.

In general, I do not understand parents who have a problem with supporting their kids, so long as it is not a case of the parents suffering from lack of money so that their kid can live in comfort. I personally would not be comfortable with my kid living in poverty, having a large debt, while I had enough money to help them AND still live comfortably myself.

However, I would likely change my mind if I had a kid who was living in poverty because they expected us to support them.

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63

I retired at 40 and we intend to pay for all of DS education. We supplemented his education a fair bit via summer camps, AOPS courses, etc when he was in HS. He has our older car which will hopefully get him through college. We haven take him on quite a few intl vacations and may continue to do so. He had a summer internship and I started a Roth IRA for him.

To date, he is very good with his cash and is overall quite frugal. I have always told him we expect to spend all of our money and do not plan on leaving an inheritance. If we do not spend it all, we would give to him what is left but we are going to try hard.

I think there is a sense of satisfaction and accomplishment from buying your own things without getting it given to you. He has all the skills to be quite successful and if he were to have some sort of idea for a business venture I would gladly support that but I do not intend to just give him money as I do not believe it would help him achieve what he is capable of doing.

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I agree about having self-satisfaction in doing and acquiring for oneself. That is a very valid point.

Any time we talk to ds about what he might or might not inherit (not specifically, just general terms) he says, “I don’t want your money.” I think it’s more of an emotional response to thinking about our dying, though.

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I won’t have any money for my kids to inherit so we never have those conversations. I will not do something unnecessary like a kitchen remodel or vacation if I need to help my kids. I struggled and know poverty, I don’t want that for my kids. They don’t need to know how to struggle to be good people that appreciate what they have.

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Years ago - and even when we were kids - families were often bigger - like more children!! I have two very good friends who are one of 8 kids and one of 10 kids! I mean, how much could their parents do for them all!

I don’t know the stats (though I’m sure someone will find them…) but families today are often smaller. It can be a whole other ball game to provide before or after adulthood to 1 or 2 kids as opposed to a family of 4-6 kids!

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I hope that’s what your H and you say to them when/if they expect help as they age.

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My husband and I never asked for anything from our parents. They were frugal, but not cheap. They didn’t let us pay for their meals out even. They did hint they didn’t mind give us money to fund for the kid’s education, but we never followed through with them either. I felt that was our responsibility, not theirs. We never had help from either set of parents while our kids were growing up, but my husband and I never complained because they were overseas and far way. I bought my own house from my own money. My husband did the same.
I’ve already given my kids my old furniture, reasonably new and well made, old cars, mileages, but that’s it for now. When they get married, I might give them something, but I think that’s very far off in the future. I do think they get some satisfaction of paying for things from their hard earned money.

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For me, I am a bit like some of your parents. While our retirement finances seems to be enough, I find it hard to believe. I am still working although DH is mostly retired. We have been “helping” by providing no interest loans. When youngest son started working he needed a car. We paid for it and he then paid up back with no interest while living here with no rent or other payments (except for cell phone - on our plan but have them pay). My oldest lived here rent free for a few years while working and then in grad school. Used our car (put gas in but was not paying for insurance etc.). Will be loaning him $$ to partially pay off grad student loan but he will pay us back with no interest.

We have helped middle son with some expenses as well, although he has not lived here and so has benefitted less.

We still pay for vacations to some extent and due to some mobility issues with my DH, will probably continue to invite them along.

If there are weddings, we would plan to pay for some portion of that, depending on the situation and the bride’s parents. If there are grandkids, and they live nearby, would be glad to babysit part-time and to set up 529s for them.

I think in 10 or so years I would feel more comfortable understanding how much “extra” money we could afford to gift for each kid. I like the idea of giving with “warm hands”, but my first goal is to be sure we don’t become a financial drain on our kids in our later years. How do you decide, based on risk level for future retirement earnings and spending?

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Something not yet touched upon here is gender difference (if any) in attitudes towards giving to adult children.

This is my atavistic instinct as a mother, though of course I don’t want to spoil the children or lessen their work ethic in any way. If they grow up to be self-sufficient, I would like any money left to go (on both our deaths) to (in this order):

  1. Kids
  2. Charities
  3. Our nieces and nephews (8 in total)
  4. Taxes

In most cases, one spouse dies before the other and this IS a story as old as time, many widow/widowers remarry and there is a delicate dance between wanting to leave your spouse something and leaving your children something.

In my case (as a woman - I think there IS a gender difference), if I were a widow contemplating marriage, I would have a prenup. I know that my spouse would not do so as a widower contemplating marriage. Going to back to my atavistic instinct, I would much rather leave money to my children than a 2nd spouse.

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One of the reasons H and I are still working is to be able to pay for things from our salaries and continuing to let our retirement savings grow. We also like the idea of giving to our girls now versus when we are gone.

We do family ski vacations during December and March and pay for everyone. Since both Ds live close we pay for dinners out with all of us and are happy to do that. My parents still insist on paying for dinner for H and I whenever we go out so I feel we are just doing the same with our girls.

D1 is getting married in 2024 and we are giving them money for the wedding. We would also like to help them with a down payment on a home when they decide whether they will stay here in San Diego or go somewhere else. We will do the same for D2 regarding a wedding and home as we do for D1. These things were never promised to our girls as we did not know where we would be money wise at this point in our lives. We know we are privileged to be able to do this for them. Both girls are always so appreciative of what we do for them and never expect things from us.

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We had an interesting situation with grandparents with my kids. My SIL had the first grandchild about 16 months before my oldest was born. SIL & BIL both worked and had my in-laws watch my niece 5 days a week. When my oldest was born my wife took 12 weeks off and I did the 13th week myself. My wife went part-time after the baby and my in-laws watched our child 2 days a week. That lasted about 12 months and my wife stopped working. Eventually my SIL and BIL were divorced. SIL moved in with my in-laws for about 3 years. My youngest is 4 years older than my oldest.

Later my other SIL had their first child. It was rinse and repeat. My in-laws watched my new niece 5 days week. She is 10 years younger than my oldest. Then they had another child.

The result of all of this was my in-laws didn’t have time for my kids because they were always watching one of my nieces. They could never make it to things they did at school like in school plays and such. Then by the time the weekend rolled around they had their own errands or doctors appointments to go to and were too tired to do anything with my children or go to their games. It was like my kids were punished from having a close relationship with their grandparents because my wife stayed home.

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@Oldfort, my nephew’s law firm paid him a “sign on” bonus when he returned after his two year clerkship which made him whole (i.e. his total comp was equalized, as if he hadn’t clerked). And the firm “counts” clerking towards your years… so you come back as a fifth year associate even if you left after 2.5 years.

Depending on the judge- clerking can be INFINITELY more valuable than that extra year of law firm compensation… I assume your D did the math with all relevant facts in front of her, but just in case… assuming it’s a federal clerkship, with a possibility of that second year in the appellate system, she might want to reconsider. That extra year at a firm vs. what is considered a top top top credential for the rest of her career… especially if the firm compensates her (as my nephew’s did) for his time away… it’s a no-brainer.

Sorry to derail but your post jumped out at me…

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Thanks. Her firm will also give her a sign on bonus when she returns, but I am not sure if it would completely make her whole. She will be doing her clerkship as a 3rd year associate and come back as 3+ X yr associate.

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Kinda depends on her contemplated track and the type of clerkship (federal vs state, trial vs appellate, which circuit if federal appellate). If she is looking at going back into government service or even moving up to a higher court clerkship, the extra year is definitely worth it. Otherwise, there are a lot of factors to balance. If she is currently a 2Y associate, missing years 3-4, may mean a disruption in relationship with mentors at the firm at a pretty critical time. 1 year goes by pretty quickly. A 2 year absence is pushing it IMO.

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We do give to our adult children. Not a down payment on a house but we would loan them part of it if necessary. My kids have all shown they are responsible and hard workers. My in-laws have been generous over the years and we hope to be able to do the same. My I laws have paid for family trips and we do the same. We can afford to help. We have a new grandchild and we opened a 529, my in-laws also opened a 529 for the baby. We will do the same for any more grandchildren.
I have several friends who have gifted down payments for homes. They figure they have the money and would rather gift part of the estate now when their kids could use it versus waiting.

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I do think the vacation aspect is interesting. I NEVER would have wanted to go on a vacation with my in-laws - for a variety of reasons.

Never an issue because they never offered, but I am not sure how I would have handled that.

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D1 and her fiance have also vacationed with his family. H and I and our girls have traveled with my parents many times over the years. Everyone is different, but we all just happen to love to ski (D1’s fiance snowboards) and enjoy going together a couple of times each winter. We have also done many long weekend trips since our daughters graduated college.

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Maybe you could offer them an amount of money upfront “to go towards their honeymoon”. If they know they have this money, it might change what their plans are. If you wait to chip in on the honeymoon after they have made their plans, they may choose a cheaper option than they would ideally dream of. The fun of the upfront gift is it gives them flexibility to choose from more honeymoon options. Maybe they will still choose a more frugal honeymoon, or maybe this will enable them to go somewhere extra dreamy! It sounds like this could be your only child. I think, go for it! And the sooner the better, so they can plan with ease.

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This! That satisfaction is better than material comfort money can buy imo. Kids make so much money these days. We won’t be helping much if we give them money.

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