Menu

How much financial help is too much for the kids?

Home Estate Planning How much financial help is too much for the kids?

  • Avatar NJDoc 
    Participant
    Status: Physician
    Posts: 195
    Joined: 02/07/2016

    Although I am a couple of years away from paying for weddings, I was having this discussion with my wife…how much to help the kids financially? We were planning on paying for college, grad school, weddings ( I have girls) and then maybe helping them with a house downpayment. All sounds very parent like, although I never had such assistance. My parents payed for undergrad and everything else was on me, although my wife’s father paid for our wedding.

    Do we rob our children of the sense of personal accomplishment by over doing the financial assistance? Or is it our ” job” to help them as much as possible?

    What about grandchildren if and when they arrive?

    What are your thoughts?

     

    #28533 Reply
    Avatar DarrVao777 
    Participant
    Status: Physician
    Posts: 158
    Joined: 04/12/2016

    Although I am a couple of years away from paying for weddings, I was having this discussion with my wife…how much to help the kids financially? We were planning on paying for college, grad school, weddings ( I have girls) and then maybe helping them with a house downpayment. All sounds very parent like, although I never had such assistance. My parents payed for undergrad and everything else was on me, although my wife’s father paid for our wedding.

    Do we rob our children of the sense of personal accomplishment by over doing the financial assistance? Or is it our ” job” to help them as much as possible?

    What about grandchildren if and when they arrive?

    What are your thoughts?

     

    Click to expand…

    I was planning on college and if they choose, grad school (like my folks did for me)

    I would hope that kind of foundation should make the other items (weddings, house downpayment) very easily attainable by the children

    Perhaps I would assist with 529s for the grandchildren if estate tax proves to be an issue 🙂

    #28536 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3168
    Joined: 01/21/2016

    I think this is something that each family must decide for itself. My parents paid for my education (through med school), with my grandfather chipping in a little bit at the very end. My wife’s parents had limited ability to pay (she was the third of three, all three went to professional school), and I helped her pay off her student loans from college and law school. My father gave us some money for a downpayment for the house and has been very generous with our children, too.

    I expect to pay for college for kids, grad school if they go, and maybe a little money to help get started in life. Yes, a wedding for my daughter, but not a $75-100k Bridezilla affair.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #28539 Reply
    PhysicianOnFIRE PhysicianOnFIRE 
    Moderator
    Status: Physician
    Posts: 1504
    Joined: 01/08/2016

    The Millionaire Next Door has a chapter on Economic Outpatient Care that is very interesting. Basically, on average, the more monetary help the parent gives, the more dependent the son or daughter will forever be on the parents. That being said, most of what you suggest seems reasonable. I plan on having 6-figure 529s for each of our boys. I haven’t thought much beyond that, but I’ve got years to go (1st and 2nd graders right now).

     

     

    40-something anesthesiologist and personal finance blogger @ https://physicianonfire.com [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #28542 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1450
    Joined: 01/08/2016

    I enjoyed Silver Spoon Kids and The Opposite of Spoiled.  Directly and indirectly addresses this.  Millionaire next door also worthwhile.  I plan on paying for school; definitely a car; maybe a Family Loan for a second house (ie National Family Mortgage); prolly a wedding.

    #28544 Reply
    Avatar NJDoc 
    Participant
    Status: Physician
    Posts: 195
    Joined: 02/07/2016
    (ie National Family Mortgage

    Click to expand…

    Thanks , I never heard of National Family Mortgage, very interesting.

    #28571 Reply
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2197
    Joined: 08/01/2016
    Disability Insurance

    Do we rob our children of the sense of personal accomplishment by over doing the financial assistance? Or is it our ” job” to help them as much as possible?

    What about grandchildren if and when they arrive?

    What are your thoughts?

     

    Click to expand…

    I think this is something that each family must decide for itself.

    As said above, it depends on the family and its resources as well as the culture the parents were brought up in. You will hardly see any Asian parent kicking their children out of the house when they are 18 years of age. They almost always provide fully for their education if they have the ability to do so. Sometimes they sacrifice a bit of themselves in order to do so.

    I will fully fund my child’s education, both undergrad and grad school, and a professional school if she chooses. I will pay for all related living expenses. I want my child to study and use the summer to do research or broaden her education, not work at a fast food place ( no offense to people who work there). I also plan to pay for her wedding and help her buy a house. She has already shown an inclination to live reasonably frugally and so I have decided to gift her $28K per year (my wife and I) so that she can invest if for her retirement and use her earnings to live well and fund her children’s education and their retirement. I hope this paln works out.

    #28579 Reply
    Liked by hatton1, RocDoc, Zaphod
    Avatar conniebird 
    Participant
    Status: Physician
    Posts: 258
    Joined: 01/08/2016

    Do we rob our children of the sense of personal accomplishment by over doing the financial assistance? Or is it our ” job” to help them as much as possible?

    What about grandchildren if and when they arrive?

    What are your thoughts?

     

    Click to expand…

    I think this is something that each family must decide for itself.

    As said above, it depends on the family and its resources as well as the culture the parents were brought up in. You will hardly see any Asian parent kicking their children out of the house when they are 18 years of age. They almost always provide fully for their education if they have the ability to do so. Sometimes they sacrifice a bit of themselves in order to do so.

    I will fully fund my child’s education, both undergrad and grad school, and a professional school if she chooses. I will pay for all related living expenses. I want my child to study and use the summer to do research or broaden her education, not work at a fast food place ( no offense to people who work there). I also plan to pay for her wedding and help her buy a house. She has already shown an inclination to live reasonably frugally and so I have decided to gift her $28K per year (my wife and I) so that she can invest if for her retirement and use her earnings to live well and fund her children’s education and their retirement. I hope this paln works out.

    Click to expand…

    Not arguing with you here, but I feel strongly that having a job promotes work ethic and real world experience (which you can’t learn by studying and doing research) – I’ve had jobs since junior high school – babysitting, working at the local pharmacy as a cashier, computer lab during college, and non medical job before med school. I see so many medical colleagues with no life experience continue this bubble and then rely on parents for everything. Not saying yours will turn out like this.

    “Compound interest is the eighth wonder of the world. (S)he who understands it, earns it ... (s)he who doesn't ... pays it.”

    @ missbonniemd.com

    #28580 Reply
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2197
    Joined: 08/01/2016

    Not arguing with you here, but I feel strongly that having a job promotes work ethic and real world experience (which you can’t learn by studying and doing research) – I’ve had jobs since junior high school – babysitting, working at the local pharmacy as a cashier, computer lab during college, and non medical job before med school. I see so many medical colleagues with no life experience continue this bubble and then rely on parents for everything. Not saying yours will turn out like this.

    Click to expand…

    Actually I agree with you. If she can find a summer job that combines some good work along with some learning while also  improving her resume, that is what I would want. My nephew worked for a year in J & J research labs while applying for med school and even did it during his 1st year’s summer break. Money was good and he had valuable lab experience. I have no problems like babysitting or doing neighbor’s yard work for some fun money.

    What I want her to avoid is doing menial jobs just to earn money while that time can be used to improve her resume to help her apply to college / medical school. Things have become so ultra-competitive these days that I truly believe that were I to apply today with the skills, grades and extra courses / volunteering ( which I had none) I possessed, all the admissions directors would have laughed at me for even trying to apply. Thank goodness I got in in an earlier era when the competition was a bit sparse.

    #28581 Reply
    Liked by RocDoc, Zaphod
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 5627
    Joined: 01/12/2016
    Splash Refinancing Bonus
    Not arguing with you here, but I feel strongly that having a job promotes work ethic and real world experience (which you can’t learn by studying and doing research) – I’ve had jobs since junior high school – babysitting, working at the local pharmacy as a cashier, computer lab during college, and non medical job before med school. I see so many medical colleagues with no life experience continue this bubble and then rely on parents for everything. Not saying yours will turn out like this. 

    Click to expand…

    Actually I agree with you. If she can find a summer job that combines some good work along with some learning while also  improving her resume, that is what I would want. My nephew worked for a year in J & J research labs while applying for med school and even did it during his 1st year’s summer break. Money was good and he had valuable lab experience. I have no problems like babysitting or doing neighbor’s yard work for some fun money.

    What I want her to avoid is doing menial jobs just to earn money while that time can be used to improve her resume to help her apply to college / medical school. Things have become so ultraconservative these days that I truly believe that were I to apply today with the skills, grades and extra courses / volunteering ( which I had none) I possessed, all the admissions directors would have laughed at me for even trying to apply. Thank goodness I got in in an earlier era when the competition was a bit sparse.

    Click to expand…

    Agree with both of you guys. Yes, a job is great and does teach things, but overall and especially in our now hypercompetitive student marketplace it is not a good thing trajectory wise. Great if it teaches you how menial and linear those jobs are, but thats pretty easy to understand. Nothing should detract from the goal and sometimes people lose overall focus for cash in hand.

    Fwiw, I worked in HS and full time in college myself, but those are no longer “good enough” to compete for entry anymore. Even though I’d argue holding down a full time physical job and going to school full time while supporting oneself is probably no better indicator for being able to handle the workload of school/residency, but logic isnt necessarily how these things work.

    #28584 Reply
    Liked by RocDoc
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7306
    Joined: 01/09/2016

    I was lucky – 2 boys, no weddings, only rehearsal dinners  :-).

    Each boy’s in-laws had a different plan for their daughters. The first set, retired teachers who were quite frugal, had 2 daughters marry in the same year – yikes! They had saved up $10k for each daughter and they gave it to them to spend as they wished so they could keep the rest. It made a huge difference in their choices. They both had beautiful weddings, with all the guests they wanted, but really worked on keeping costs down and ended up with money in the bank.

    The second set of in-laws had a budget of $25k and went over (successful small business owners, their only daughter). It was a beautiful wedding, too, and the big even was something my 2nd DIL and her mom had planned for all of her life.

    If I had ended up with daughters, I would likely have gone the first route (maybe more than $10k), as that’s the way I raised my kids, but it’s a personal decision for everybody and I understand the big wedding that was planned for many years.

    I agree with the suggestion that earning a paycheck and making kids responsible at an early age can help them along the way to maturity. My boys did their own laundry from middle school up, worked, bought their first cars, etc. I believe it made a big difference when they were finally independent and, especially, to prepare them for marriage and a family. As for college, I told them that I would pay for 4 years for an undergrad degree so they’d better not fool around. Neither went to post-grad, not sure if I would have helped out, prolly some.

    One other thing – I funded their Roth IRAs until they were on their own. They were just starting to mow lawns and stuff when Roths were put into law. They worked hard but would not have funded retirement accounts!

    Don’t believe in paying expenses when the kids are grown, but do believe in nice gifts. Don’t think grownups should expect handouts from their parents.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #28587 Reply
    Liked by RocDoc
    Avatar docnews 
    Participant
    Status: Physician
    Posts: 374
    Joined: 01/09/2016

    This is such a hard topic. The most important thing that I think everyone is alluding to is encouraging wise investments and not possessions.

    1) Education

    2) Retirement Funds

    3) Even what a wedding symbolizes is important. WCI always reiterates that choosing a good spouse is one of the most important financial decisions!

     

    All that being said: my wife and I still debate the “how much”. I like the idea of starting a wise move with hopes that my child completes it. Fully funding something leaves no skin in the game for the child in my opinion but my gracious spouse often disagrees.

     

    #28593 Reply
    DMFA DMFA 
    Moderator
    Status: Physician
    Posts: 2126
    Joined: 06/24/2016

    I found as time went by that the more I worked and earned my own money, the more ready my family was to help me…kind of like a matching program.  I think the most important concept I got out of it was that I knew what a dollar was worth in terms of my work time when I was in HS and college.  Four 12-hr shifts at $12/hr paid my monthly rent, another one covered gas for the month…is it really worth four hours of my work time to buy a new pair of jeans?  (my wardrobe was awful) Is that girl really worth a whole shift for dinner and drinks?

    Although this dated way back to my $5/week allowance…should I save two weeks to buy that rare MtG single for my deck, or buy two boosters and hope I get something good to trade?  How priorities change.

    My son should have about $200,000 in his 529 by the time he turns 18.  He’ll probably get a used car at age 16 (my parents got me one, but I had to pay for gas and insurance).  I feel like I’ll need to give my kids enough to make them not feel proportionally neglected, but not too much to stunt their own growth for responsibility and money management.  I was thinking about things like a credit card with a pre-set limit that I’d auto-pay every month…like $100 or so but who know what it would be in 2033 dollars.

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #28600 Reply
    Liked by hatton1

Reply To: How much financial help is too much for the kids?

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

Notifications Mark all as read  |  Clear