It’s easy to be equitable when you only have one kid
I will say that dh’s parents have always been very 50/50 (almost painfully so) on things between him and his sister. And between his sister’s daughter (our niece) and our ds. As in making sure the EXACT same amount was spent on each of the two grandchildren at Christmas.
Dh chose a more lucrative career path (accounting/finance) than did his sister (education), though she has a graduate degree and dh does not. I’m not sure who paid for her grad school, so dh’s sister might have gotten more education money than dh did. Our ds landed an MBB consulting job out of undergrad whereas his cousin (our niece) flunked out of a directional state school. It’s never made a difference. Mil gifted each of the grandchildren the same amount of cash last year at Christmas. Goodness knows niece needs it more than our ds given her hourly retail job.
We briefly considered that, and then shelved it. We very much want to be equal in our giving. It’s difficult to calibrate for taxes even today, and who knows what the future holds. Their relative incomes could reverse.
So, we do the “unwise” tax thing of treating them equally. Taking the long view.
I also have an only and our parents were also the same, equal distribution among their 3 kids; a starving artist, a well to do medical doctor, an academic. You should respect their choices that comes with financial consequences instead of trying to “correct” their choices with your help, as hard as it may be to watch from the sideline.
We raised our kid without grandparents opening 529 for our kid. I fully trust my kid will do at least as well as we did and won’t need us to fund 529 for their kids. If my kid needs my help in their adult life, in a way I failed in parenting. However expensive any housing market may be, they can live as their peers do, commute longer, get a smaller place. If that’s what their peers do on their earnings, they can survive the same way. Does everyone have to be so special and can’t live in the same way as the majority manage?
I do have a sibling. My parents left everything to us equally. I’m much more well off but my parents sent us both debt free to college and my parents subsidized him quite a lot over the years. Sibling is not a saver and could be making much different life choices. I would have been upset if my parents had decided to leave him more because he “needed it”.
If one is in a worse financial situation because of bad habits, it is even more important to divide things equally. That way the better-off siblings will feel more willing to help out that one after the spendthrift drains the inheritance with remarkable speed. Ask me how I know.
We spent money to set up spendthrift trusts for one of ours who has some maturing to do. Just in case, we set up the same trust for the one who is unlikely to need it.
When inheritances are equal, it provides a bit of an emotional buffer to help the frugal one resist the entreaties of the spendthrift: “we both got the same, why are you asking me for money?” I doubt he would say it that way, but . . . still. I hope that the spendthrift matures (he’s getting there, albeit slowly), but there’s a reason why we made sure that the frugal one wouldn’t decide on distributions but is fine for investment decisions.
It is interesting the DD2 likes the best of everything, and has been given ‘equal’ - yet she felt relief in seeing she is equal in our will. Some how in the back of her mind she may have thought we want to do more with DD1 with the two kids. DD1 is more frugal, and is willing to make the sacrifices a parent needs to make - on time, energy, and money - SIL and DD1 providing for their children.
IMHO our kids have grown up with more affluence around them. Of course the explosion of visual and other media feeds that ‘want more’ fire. It is a maturing thing when one goes beyond what one needs and limits what one wants. Self sufficiency. Independence.
Emotionally it is good to have supportive family. But also making good choices and living a life that is not encumbered with many self imposed problems.
One has to cut through the ‘noise’ in our current world/country/state/city/workplace etc.
We have a very similar view as @shawbridge. Education is of paramount value in our family (W and mine), not just for financial reasons but also for reasons of maximizing personal potential. I understand the calculus that most families go through when weighing college costs vs benefits. For us though, we were fortunate enough that we could put aside financial considerations and let each kid go to the school that they felt was the best fit for them. If we are in a position to do this (or help do this) for any grandchildren we will do so. As to housing, I look at it differently vs more discretionary spending (e.g. type of car you drive, designer clothes/shoes, vacations you take, eating out etc…). Where you live sets you/your family up for future success: safety, ease of commute (more time with family/less stress), who your kids hang out with, the quality of the public school, community resources. Financially, once you can settle roots, why pay a landlord to enjoy the appreciation of the property? We would not buy our kids a house, but if we can contribute/help contribute the 20% down payment for a house that they can otherwise afford in terms of mortgage payments, tax, insurance and upkeep, I’d like to give them a jump-start there.
We have and will treat each kid equally. One is in a potentially more lucrative field (finance vs STEM), but who knows with time. Both are fairly frugal. They both are/expect to be off the family payroll after graduation. They have/will get the same lump sum graduation gift. While they don’t know it now, we’ll probably gift them the same for a home down payment. We’ll also probably fund each grandkids’ 529 equally once they are born.
My sister and I are going through this right now. Our father passed 6 weeks ago, but a lifetime of gifts from him and our grandparents, then arguments about his elder care in the last year, plus investments and a house to deal with in the estate, means we have some sore feelings and mistrust. But it is in line with family history, my dad and his brother rarely spoke or visited for the last 13 years of my uncle’s life, even though they only lived 35 miles apart.
My sister is single with no kids. We have two kids with good incomes and prospects. We are taking the lessons from my dealings with my sister (and my dad and uncle) as a guide for what we do NOT want to happen.
I love the line, “Ask me how I know.” Kudos to anyone who can keep a family together.
Well, I did check the numbers (checked them before I got to this post) and the
1049 was the END of August 2010, ie 8/30/2010. August 2010 was actually a down month. Anyway, you can compare 1049 August 30 2010 to today’s close,
August 31, 2020, which will be around the current level of 3509,
more like 3 1/3 times in 10 years! And that’s just the index, without dividends.
Interesting take. Question for you. Is this like a hard rule? Or it can be changed depending on your ability / net worth?
Had a conversation with a friend few weeks ago regarding gifts/help that we are willing (and able) to give to our kids. His take is, you either spend your “extra” money now WITH them and enjoy WITH them. Or they will spend your money WITHOUT you after you die. Well, unless you leave all your money to charity, which is a good thing too.
We have some friends who are far (I mean FAR!!!) wealthier than we are that have bought each of their two sons lovely, large (4,000 sq ft range) homes in their hometown. Idk if that was a ploy to keep them around or not, and I don’t know if they would have offered them the same amount to spend elsewhere. A 4,000 foot home in this area would be far less than a 1,000 ft home in a metro area, so the wouldn’t have gone as far in a different place. Anyway, buying my kid a home isn’t something I would do. I could see loaning money for a down payment or doing a bridge type loan or something like that. But, I’d be charging interest and would expect repayment.
As others on this thread we significantly value education and were full-freight at a private university for ds. I’m sure many think that was a ridiculous amount of money to spend, but we didn’t. I don’t want to get into the whole debate of “value” on education/where one attends/private v. Big State U discussion. However, to me, the difference between buying an education for a child v. buying a home for a child is akin to teaching them to fish v. buying them a fish.
I understand that supplying both a college education and a house for a child aren’t mutually exclusive - more power to those who can and choose to do both. Our friends did, but their sons went to Big State U’s. They certainly could have paid much more for their educations than they did, however. Everyone chooses to spend their money in different ways on their children. Or not at all.
But, I am also somewhat in the camp of being able to watch your children enjoy what you can give them now since you can’t after they are gone. Grandchildren seem very far away for us, but I plan to contribute toward their educations if I ever have any. That’s just providing more fishing lessons further down the family tree.
I would not spend $ to help D buy a nicer house than she can afford on her own.
Would we offer to pay for her to come on a family vacation that she couldn’t otherwise afford? Absolutely. We’re all for sharing the experiences, not stuff.
“But, I am also somewhat in the camp of being able to watch your children enjoy what you can give them now since you can’t after they are gone.”
I would like to think that I will be able to do a little of both. Spend some money on my kids (and our grand kids someday) now and still be able to have some inheritable assets to leave them when we are gone. I think this would be the best of both worlds…
I don’t know about a hard rule but I don’t see any need to help out. Are you really worried that your kids won’t be as successful as you were? I am not. I raised my kid no problem without help from parents. I don’t see why my kid can’t do the same. My kid had everything she needed growing up and I am sure she can provide just as well. I think there is important sense of achievement providing for your own kid on your own. I will help with babysitting.
Some of this seems to be family custom. If your family is fortunate enough to have been able to help children purchase homes for one of more generations, that’s the model you know and the inclination is probably to pay it forward.
If your experience is different, the above model may make no sense.
I’d feel really guilty not paying it forward in some way… It feels like a responsibility. It aggravates me if my siblings aren’t paying it forward to my liking… lol… but surely don’t think I know what works best for any other family.
Yes, we see this all the time on CC when it comes to who is paying for college tuition, books, etc. Many people comment that they paid their own way, want their kids to have “skin in the game”, etc.
My parents paid for all the costs associated with my college - tuition, R&B, books, etc. I greatly appreciated it. I did the same with my kids, a way of paying it forward. My kids greatly appreciate it. They see their peers who are struggling with student loans.
Every family has different resources at their disposal. If I can grease the skids for my kids here and there, I will. Doesn’t make them lazy or not driven. In my philosophy, families help each other.
We currently are sitting on a lot of cash in our retirement accounts. We recently sold the majority of the shares in a mutual fund that we both have had for a long time. It was up substantially and we decided to take our profit. It’s continued to go up but we are happy we got out of it with a huge profit. I’m still kicking myself that I didn’t sell my Boeing stock when it was high. We don’t know what we would buy at this point so are letting it sit.
We had family help with our first home and we would do something similar with our kids. Our philosophy is that we want to make their lives easier but not so much that they don’t have a incentive to work. So far all my kids have proven to be hard workers.
" Are you really worried that your kids won’t be as successful as you were? " - Yes (part of our success was plain good luck).
Note - My MIL did help us with downpayment on our first house. That was a big help to us. Had we waited a year, home prices would have been more than 10% higher .
