Kids & Money Category
Dear Liz: I didn’t think your advice was very good to the parent who asked about retirement planning for a 25-year-old son who was living at home. You got on your high horse about how the parent should charge him rent because he has to learn responsibility sometime. I took the opposite approach with my kids and told them they were welcome to stay with me as long as they liked, provided they were saving money for a down payment on a house. I also advised them to put 20% of their incomes into retirement accounts because it’s important to start saving when you’re young and not saddled with expenses. Once they saved up their down payments, they moved out and bought their own houses. It really didn’t cost me anything to have them live with me and I got to spend more time with them, which is important too. Too many other old folks complain that their grown kids never visit, but I wonder whether they ever did any favors for their kids when they were younger.
A: A parent’s freehandedness about money doesn’t necessarily ensure gratitude, but your approach is certainly reasonable. You set clear financial terms for your adult children, and they rose to the occasion. Yet another approach might be charging rent,Â thenÂ returning the payments as a gift toward the child’s down payment on a first home.
What you don’t want to have is an adult child who’s not paying rent, not saving for the future and spending his money on whatever he pleases. That kind of prolonged adolescence does no one good.
Dear Liz: I want to disagree with you over your recent advice about buying cars for kids.
I was extremely depressed during my senior year of high school for many reasons, but a big part of it was that I couldn’t drive because of our financial situation. My mom had other bills to pay, and my paychecks weren’t big enough to cover the insurance.
I really don’t think you grown-ups know how it feels to wait for rides, walk home past the young sophomores that drive and have people look down on you. All I can say is that when I have kids, I will do anything to make sure they have a car.
A: No, you probably won’t â€” because someday you’ll be the grown-up and you’ll realize what a service your mother did for you by not buying you something your family couldn’t afford.
You also will learn, with anyÂ luck, thatÂ how you react to circumstances is a lot more important than the circumstances themselves.
By the way, many of us grown-ups know exactly how it feels to wait for rides, and we survived just fine.
Question: I’m in my 20s and make a good salary, but I still live in my parents’ house â€” actually, in their basement.In my culture it’s considered the child’s duty to help support the parents, but I’m the only one of several children with a good job. So I help my parents pay their mortgage, and I also give my mother spending money each month.
I’m pretty sure that my mother gives the money to one of my older brothers, who wants to be a comedian and who refuses to get a job to support himself. I think she’s tried not to give him money, but he has a terrible temper and she’s afraid of making him angry.
I want to do the right thing, but I’m getting tired of supporting everyone and not getting on with my own life. Do you see a way out?
Answer: Of course, and so do you. You just haven’t been willing to take the first step.
It’s important to honor your culture, but it’s unlikely your culture includes an ancient tradition of supporting tantrum-throwing wannabe comedians. If your mom is passing along your largess, then you’re giving too much and indirectly aiding your brother’s refusal to grow up.
Figure out how much money you need to get your own place, build up a decent emergency fund and begin saving for retirement. Your parents may have convinced you that supporting them in their old age is your duty, but you shouldn’t count on being able to convince your own kids of the same thing. Your parents’ stipend can come out of what’s left.
If that’s not enough to pay for the lifestyle to which they’ve become accustomed, they may need to take the opportunity to downsize â€” perhaps into a house that’s too small to house Brother Freeload. If your mother has reason to fear your brother’s reaction, a call to the local domestic violence hotline can offer resources for dealing with the situation.
All this assumes your parents aren’t elderly, disabled or otherwise dependent on you to stay above the poverty line. If cutting back would throw them into an economic tailspin, you may need to remain at home awhile longer as you transition them to a more realistic standard of living.
You may well face a barrage of parental and familial criticism for daring to put limits on your dole. But if you’re convinced that you have a right to a life of your own â€” one that allows you to help your parents without being drained by their demands â€” then you’ll be able to survive. Interestingly enough, so will they. Good luck.