<p>If you could structure your finances without causing undo hardship to you and your spouse is there a downside to putting your child in a position to have no student loans, no child care costs (when the time comes) and significantly reduced housing costs.
My D (an only child) is a hardworking, fairly frugal kid that has always been responsible and my wife and I are lucky enough that we can take steps to make this happen.
The one downside I see is the potential to not understand certain sacrifices needed to get by day to day, year to year financially. At least now my D does not seem the kind to not appreciate that some sacrifice is needed to reach your goals. She does not waste money and understands her obligation to school overrides her desire for fun whenever she wants etc.</p>
<p>I have seen individuals thrive because of financial freedom and others really not become “adults”. Do you think it is a case by case issue?</p>
<p>Obviously since she is an only child our assets would go to her sooner or later anyway.</p>
<p>I don’t see a downside, though others disagree. My children have no financial obligations to college besides earning spending money in a work/study job. They both have wanted to do this, and I think it has been a good. I have told them repeatedly that if it got to be too much I would find a way to make up that money, but they like having a hand in earning spending money.</p>
<p>You say child care. What if she decided to stay home with kids and not work those years at all? Would that be okay with you?</p>
<p>I don’t think money should be given with strings attached. And the temperament of the girl you describe certainly indicates that she would handle the freedom and the money wisely.</p>
<p>mythmom- her choices as an adult are hers. I have no problem if she stays home. I do see that women do risk both financial independence by staying home since I have seen many instances where a women stayed home and was earning significantly less when the husband departed. Child care career limitations seem to me to burden women significantly more than men. Again that would be her choice though. I guess my goal is to allow her as much financial freedom to have the career choice to stay home or take any job she wants no matter the pay. I do not see why we should wait until we die for her to have that freedom.</p>
<p>Would you be paying for a nanny for her and buying a house for her? We are in the position of providing best education and all other extra lessons while our kids were growing up. We even bought a new car for D1 when she turned 17, and our kids have traveled the world (in style).</p>
<p>My H and I expect our kids to be on their own after college - rent, food, insurance…unless there is some unexpected hardship in their life, we wouldn’t subsidize their lifestyle. Now, we would pay for flights for them to visit us if they really couldn’t afford it. Because of my job, we could potentially live outside of US for the next 10+ years. We are not going to let principle stand in the way of us seeing our kids or possibly grandchildren. But even if we could afford to help our kids enjoy the kind of lifestyle they have grown accustom to, we feel it’s important that they could make it on their own - plan when to buy a house, start a family, go on vacation - based on what they could afford.</p>
<p>Our kids are pretty grounded and do not feel entitled, but I still wouldn’t want to help them live beyond their means while they are starting out. Would I help with my grandchildren’s education someday? Probably, if necessary.</p>
<p>I am helping with law school. It isn’t easy. However, I feel that the deck is stacked against young people today.</p>
<p>My ex-H and I bought our first house for $28,000 with a $4,000 down payment. No one had to help us. It’s true, it was a very modest house. Today a starter house in my neighborhood is $500,000. 20% down payment is $100,000, and then house payments aren’t really doable. I don’t know where this money is supposed to come from. I will certainly help if I can. I am not sure I will be able to.</p>
<p>I have been looking to buy DD a NYC apartment (very modest, tiny apartment) now while the market is so low, but I find that I can’t quite swing it.</p>
<p>One downside I imagine is once your daughter is married (you mentioned child care), the spouse may feel that his contribution is not taking care of his family, and that could impact their marriage. Maybe not, though. It depends on the person and his own situation. I have a bias of my own that the best marriages have some kind of reciprocal “need” involved. That sounds kind of cynical, but I don’t mean it that way. It’s more that couples who work together to “make it” in the world often seem more attached to one another.
If I had the means, I could imagine helping my kid financially until the time when she is married, which might include a trust of some sort, but after that, I’d want to stay out of their financial lives. I could see helping with grandkid’s education, if needed, however.
It’s all so individual and personal, and I don’t think you’ll find any “right” way here- just what works for you and your family.</p>
<p>With the help we would provide my D would not have a life of luxury by any means. My W and I would help with child care so no nanny. We discussed it and actually would look forward to it. We have several options in how we would/could help with housing.
My D does not feel entitled to any of this buy the way.</p>
<p>moonchild- I agree it is all an individual matter. I happen to be someone that likes to consider all sides of an issue/situation and/or problem so that is why I post. You get some very good feedback here.</p>
<p>If people wait until they die, they can take advantage of estate tax exemption and your daughter will get the inheritance tax free up to a point. If you give assets now, the appreciation will be taxed, I would think. Would it not be a big issue?</p>
<p>If one is in the position to I can see helping out with a down payment. The other thing that I would like to do is set up college savings accounts for any grandchildren we might have. I think it makes more sense to help your kids out when they can really use the help than to save the money and leave it to them when you’re gone. By the time most people inherit from their parents they are usually secure financially.</p>
<p>Some people buy homes or apartments for their kids in their names and charge the kids rent that is affordable for them, which is one way to avoid the gift taxes, and also a way of allowing your kid to live in a decent housing situation when they couldn’t afford it otherwise. I imagine this happens especially in expensive cities when kids might be starting out with low paying jobs. It might actually enable a kid to take a low-paying but otherwise good job that he might not otherwise be able to take.
I’ve wondered how some of these editorial assistants live in NYC on their 30,000 salaries.</p>
<p>Conventional #1 advice is: you can borrow for college (at low rates.) You cannot borrow for retirement. Ensure your future years are secure before stealing from that to afford your kid an easy ride through college.</p>
<p>We provide no spending money, but do purchase things they need when we’re together. Each has a unique, competitive- and generous- coll job. We asked them to take the minimal govt backed student loans- but said, if we can, we will help to repay them. We made it clear that, should they need/want to live at home after college, they are welcome- but, at that point, we would expect some contribution toward costs. (Some reduced “rent,” because they should learn/accept this responsibility. Btw, this assumes we’re still in this house.) We have made it clear we do not intend to pay for grad school- unless something exceptional develops in our finances.<br>
We have found that kids whose parents provide all support (or, frankly, kids on full rides from the college) are no better nor worse, academically or socially, than kids with school jobs and modest debt. We do feel overwhelming debt cripples young adults.<br>
I guess I’m saying: performance, level-headedness, ethics…don’t flourish just because the student has no financial concerns. That’s something parents build in. Each family makes its own best decisions.</p>
<p>Many grandparents would like to help out with childcare, but may not always be welcomed.:)</p>
<p>I was very strict with our kids when they were young. I have a feeling that I may be a very indulging grandparent, probably wouldn’t be to my kids’ liking.</p>
<p>You are permitted to give a certain amount of money each year without incurring a gift tax. I agree with mythmom that it is better if there are no strings attached - as long as your D (or D and Dhusband) are spending the money in a responsible way.</p>
<p>The one (kind of) negative I have found is that we tend to feel a certain obligation that might not be there otherwise, so some of our decisions are affected accordingly. That’s something you might want to ponder or hash out beforehand.</p>
<p>Trust me, futurecollegemom, we still do plenty and feel plenty of accomplishment on our own. :)</p>
<p>One thing to consider is how you will feel about the financial decisions your D (and her future H) make in the future, if you and your wife are paying for some of their basic necessities like housing and childcare. You know your D and feel confident that her choices will reflect your values. What if her H uses his salary on fast cars or trips to Vegas (an exaggeration)? Will you feel miffed if they take luxury vacations while you’re paying for their house? If I were you, I would allow them to make decisions about housing and childcare based on their own incomes and then treat them to some of the things they can’t afford, rather than the other way around. Just a thought.</p>
<p>I think you’re making some presumptions, tom – that she’ll get married and even have kids, that she and dh will want you to handle child care, etc. I don’t see anything inherently wrong in wanting to help your dd in any way you can, but I’d ask her whether she even wants your help.</p>
<p>This kind of reminds me of my wealthy BIL. His three kids were born within four years of each other. One wanted to go to college some distance away, but they refused to pay for it, telling her there was nothing she couldn’t get at their local alma mater while living at home. When all the kids were in college at the local alma mater and still living at home, BIL went and bought a huge house closer to town and the college – just when you’d think he and his wife would want to downsize, right, as the kids were getting older and ready to move out on their own? My SIL admitted that his thinking was that the bigger, fancier house closer to the school would sweeten the pot for the kids and keep them from wanting to move out. In other words, he was using his money to try to control the kids without being so overt about it.</p>
<p>This dad would do anything for his kids, and truly they are a great family. But I’ve always had a little sense of unease how his “generosity” is used to control situations. Your dd sounds great, unlike some kids from wealthy families who think they’ve hit a triple when in reality they were born on third. I’d just be honest with your dd about what SHE wants.</p>
<p>We are paying 100% of college and grad school (though by grad school, we expect some contribution from him). We would like to be able to help him buy his first house. I can also see us paying for some family vacations (with us) and maybe helping with or paying for private school tuition for his kids (assuming he has some and wants them in a private school setting).</p>
<p>I think it’s a mistake to pay for daily living expenses (once they are working) and you have to be very careful that there are no strings attached to any ‘help’. My husband’s parents have always been generous with us and we would like to do the same for our only child. We would never enable son to live beyond his means but I don’t see anything wrong with helping your child out if you have the financial means to do so. Whatever we don’t spend will be his some day anyway.</p>
I’d just be honest with your dd about what SHE wants.</p>