Financially helping the kids

[Nords]

Linda Stern has an interesting article on Reuters and MSN.

Instead of addicting your kids to Economic Outpatient Care, she recommends helping them where it could make a catastrophic or long-term difference-- first by ensuring that your own retirement funding needs are met so that you won't have to move in with the little buggers.

After you've taken care of yourself, you can help take care of them by paying their health insurance premiums or ensuring that their IRAs are maximally funded.

And finally you can give them the cash for the house down payment or support the grandkid's Coverdell-- but the key is making sure that your money doesn't turn into Economic Outpatient Blackmail...

 

[Leonidas]

but the key is making sure that your money doesn't turn into Economic Outpatient Blackmail...

That sword cuts both ways. Every now and then the eldest reminds me "You better be nice to me because I'm the one picking the old folks' home."

 

[2B]

That sword cuts both ways.  Every now and then the eldest reminds me "You better be nice to me because I'm the one picking the old folks' home."

I'd answer that with "I'd sure hate you to pick one you can't afford because those Medicad places are really nasty."

 

[lazygood4nothinbum]

a friend of mine with a lot lot more money than i has willed all of it to his kids upon death. he figures it'll be a good life lesson. if they blow it, they'll learn from that. but grandpa recently gifted their kids $35k each and they immediately volunteered it to dad to invest. so seems they are on the right track.

on the other hand, i gave my 13 year old niece a fistfull of cash for her birthday. then she heard the icecream truck and my brother gave her a $10 for some icecream. after a minute i decided i wanted some too and gave her another $10, telling her to keep the change. the icecream truck never came but she never gave me back the $10. i'm not convinced the little thief has learned the responsibility of money.

mom put her grandkids in trust till they are 35. i'm co-administrator <evil grin>. is crew time considered blackmail?

don't know my brother's plans. i'm planning to set up some sort of 4% withdrawal trust (including trust cost) split between my niece/nephews with the bulk transfering in their 60s. my brother had kids late in life so i am two generations older than the youngest. if the world truly is deteriorating and oceans rising at rates i've been reading about, i suspect the "kids" are gonna need that cash in 50 years. i consider it their social security.

 

[bosco]

mom put her grandkids in trust till they are 35.

Kool! I never thought about putting my kid in trust until they were 35! Is that like suspended animation? Will they have matured as hoped once they are let out?

 

[lazygood4nothinbum]

nah, they'll just have less time remaining to make all the same mistakes.

 

[donheff]

mom put her grandkids in trust till they are 35.

Kool! I never thought about putting my kid in trust until they were 35! Is that like suspended animation? Will they have matured as hoped once they are let out?

DW and I finally went with 30 as the age our daughter becomes trustee. My son just turned 32 and has proved himself financially sensible so we have him set to become trustee immediately. We figured what is good for the gander is good for the goose.

The last thing we wanted to do was leave a pile of dough to an 18-20 year old and have her blow it on her entourage.

 

[LOL!]

DW and I could not agree on an age for the kids to get control of any inheritence. I don't believe in controlling from the grave; she does. So my will says age 25 for all of it; DW's will says age 30 for some and age 35 for the rest. Not a big deal for me, since I'll be dead either way.

 

[AltaRed]

We worked it so that our 2 kids would get a small piece of the estate right away (over 18) and the rest at 30. However, given that both have now reached 30, we are tempted to make changes and boost it to 40! They haven't experienced enough of life's struggles yet to warrant a windfall.

 

[Martha]

We worked it so that our 2 kids would get a small piece of the estate right away (over 18) and the rest at 30.  However, given that both have now reached 30, we are tempted to make changes and boost it to 40!  They haven't experienced enough of life's struggles yet to warrant a windfall.

This comment reminds me of watching my father and grandfather interact some years ago. My grandfather at age 95 would shake his head at the "juvenile" behavior of my 60 year old dad.

Poor dad.

 

[maddythebeagle]

on the other hand, i gave my 13 year old niece a fistfull of cash for her birthday. then she heard the icecream truck and my brother gave her a $10 for some icecream. after a minute i decided i wanted some too and gave her another $10, telling her to keep the change. the icecream truck never came but she never gave me back the $10. i'm not convinced the little thief has learned the responsibility of money.

I dont think you need to worry about this one and money. Got some budding skills....doubling money with little work

 

[TargaDave]

To our surprise our 15 1/2 yr old has held a steady weekend restaurant bussing job since age 14 on top of school, track, and the standard babysitting gigs. We are going to help her get a car/insurance at 16 (God help us) just to avoid the constant taxi cab service. Oh yeah, and pay for that college thing too.

 

[laurence]

You know, I've read "Millionaire Next Door" and understand the pitfalls of Economic Outpatient Care, but I can't help but wonder how much is nature, and how much is Nurture. Take my family (please! ): My older brother, me, and one of my younger brothers are very good with money. Older has his own business and rental properties, I'm doing my thing and investing like crazy, my one younger brother is in college and yet still manages to invest a bit, understand costs/interest rates etc.

Now my other younger brother, and both my sisters are completely clueless about money. He's graduated from college, has had two false starts on independence and has moved back home, doesn't have a job, mooches off parents, and looks down his nose at me for not understanding and approving of his crypto-socialist plan for the world.

Both sisters treat money like it's got an expiration date (best used quickly).

 

[Nords]

You know, I've read "Millionaire Next Door" and understand the pitfalls of Economic Outpatient Care, but I can't help but wonder how much is nature, and how much is Nurture.

We can't tell which one here-- two tightwads raising a young tightwad. Fate or free will?

 

[Brat]

We tried to educate our kids about financial matters early, both had retail jobs in their teens.  As small children we assigned chores, the completion of which impacted their allowance.  It was interesting to watch them negotiate who would do what and establish a value (trading was permitted). 

The youngest, a girl, seemed to blow us off.  She went off to a selective university to major in Engineering, then changed to Finance because she likes work that involves working with others.  She is now in her very early 30s, making mid six figures.  Even 'tho they don't seem to be listening more may be penetrating than you think.

The eldest is a boy who is has always had an entrepreneur streak.  After he finished college and worked a while we lent him money to purchase a business.  Because it took longer to get going he converted the loan to equity, which put us in an unplanned squeeze.  We figure that he received his inheritance early unless he has paid us back before we die. 

Assuming that neither of these young families have a devastating financial event what we have left should go to the education of grandchildren based on need.