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Old 04-01-2021, 02:40 PM   #41
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My parents didn't have the means to help me in any form. Only exception was during the first couple years of undergrad, they were sometimes able to send me $200-300 at the beginning of each semester to help with tuition. Otherwise, I supported myself through 7.5 years of college, including cars and our first house while I was still in grad school.

With our kids, we paid all tuition, fees, and housing during college. They worked summers, internships, and part-time during school for spending money. Once graduated and employed, we bought them each a new car. A few years later, we helped each of them with the downpayment on their first house. They had enough down to get approved, but we added whatever was needed to get them to 20%.

They are now 31 and 28. They each have great jobs and know how to manage money quite well, including saving and LBYM. We were happy to be able to help early on, which got them off to a fast start. This had no effect on our retirement finances. And certainly no effect on their attitude about money.

We had planned for the cars, almost like part of their college cost. It was an incentive to finish school quickly and get a job. The house downpayments were not planned but not a burden at all. I'd much rather help out now, when they are young, rather than inheriting a bunch of money later when they don't need it.
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Old 04-01-2021, 03:23 PM   #42
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We would think twice about helping our kids if funding our retirement was in any danger, but our situation is far different from that.

We have more than enough wealth we could ever need or want for our lifetimes. As we were frugal when we were young(we still are) & saved regularly the totals are what they are now. First world problem, or result of long years of being a Boglehead.

It makes sense in a way to see for ourselves, children using & enjoy the money which they are going to inherit anyway when they possibly will be in their 50s. We do live very comfortably a high middle class lifestyle, but not in a outlandish way(we cannot even when we try), & also do lot of charity as well.

The trick is to give to the kids in a way that their drive is not lost. That is what we discuss & keep working on.
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Old 04-01-2021, 03:54 PM   #43
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My parents were happy to help me, but they would never co-sign a loan. What's interesting is that you sometimes see the opposite which has the potential to be a much adversely worse affect.


The place I bought, in California, was less than 10% of that Bay Area place though.
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Old 04-01-2021, 06:00 PM   #44
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My experience with my folks (my family has been UMC since moving back to the US in the late 70s) was that they and my grandfather got us started without debt (college paid for), and after that we were on our own, not that we couldn't go to them in an emergency, but they weren't supporting us, and weren't gifting large amounts of money. Starting about 13 years ago, they decided to start gifting the annual limit but at that point I was 36 and my brother was 33 and we'd demonstrated we were responsible adults. Their explanation is that they would rather give us our inheritance while they are alive to get to enjoy seeing the impact it has on our lives. I'm not really sure there's been any specifically observable by them *impact for me, but if it helps them enjoy my success yay (and I appreciate the positive impact it had on my investment growth over the last decade), and they definitely have helped my formerly much higher earning younger brother out through some cash flow situations where they can see the impact the gifting has had. It certainly made some of my ups and downs of income between 2013 and 2018 far less problematic.

I'm not sure I would have been able to appreciate the money in the same way if they'd just been giving it to me right after college. But I've always been aware what a huge gift my grandfather paying my college tuition was, so maybe I would have appreciated my parents gifting as much back then as I do now...

I don't have kids, but I'd be inclined to do the same thing as my folks, get them started, let them enjoy their early successes on their own (and be a hopefully unneeded safety net) and then start giving later when they'd shown they were responsible with their money, and could really benefit from it. I do feel there is something to be said for the fact that I wanted to increase my salary, AND could really appreciate every extra $5k in salary I was earning in my 20s and early 30s.
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Old 04-02-2021, 07:45 AM   #45
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We paid for college for both kids, tuition, room and board and books. Neither one had college debt. When the younger son graduated he was self employed as a freelance sound engineer. He had done quite a lot of that while in college and wanted to expand it into a full time career.

So we let him live at home for a few years while he built up his business. He paid us a percentage of his earnings as a contribution to the household and all of his own expenses. He worked a lot, long hours and infrequent days off. He was easy to have around and he was appreciative of the help. He was able to save enough to move out and support himself doing his freelance work. He freelanced for 8 years until one of the companies that he worked for hired him full time.

I feel like this was a good investment because he's the one that made us grandparents in 2018. And they bought a house 9 blocks away.
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Old 04-02-2021, 08:40 AM   #46
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My DM also charged me rent one summer I came home from college. I was working, so OK. That was definitely the last time I lived at home...
My DM frequently told us kids that she paid rent to her parents after graduating from high school in the late 1940s. So, we grew up knowing we'd have to take care of ourselves. (Or, maybe I should say, "get to take care of ourselves").
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Old 04-02-2021, 09:29 AM   #47
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We funded all three kids through university, back in January making the very last tuition payment for youngest daughter. Done!

We have a little back pocket plan though. We have a modest size rental home near our current house and if someday one of the kids wants to come back to California we would sell them that house at a very low price. Chances of this happening is extremely low as they are now spread out across the country, settling in Wisconsin, Minnesota and Nevada.
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Old 04-02-2021, 01:44 PM   #48
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My parents let me stay at home during University. They helped DW and I with our first house.

We've told our kids not to expect an inheritance (of any significant magnitude.) Most will go to charity. BUT, we have helped all the kids with their various houses, wedding, etc. We have sort of a "plan" of how much we will give to the kids while we are still living. After that, we plan on them remaining independent. We were fortunate that we were retired AND comfortable before the kids needed anything. One kid wanted us to co-sign so that he could buy into a business. We said "no" but we'll give you some cash and then "you're on your own." It was a good move. The business failed. We would have been on the hook for unspecified debt. Not something you want in retirement.

In short, we would not do anything at this point to jeopardize retirement as we have no options to make it up. From our ability to help, we will continue to do so. For instance, we are paying for life insurance for each of the kids until we die (or run out of money.)

By the way: Never loan money to your kids (or friends.) It ruins their memories! YMMV
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Old 04-02-2021, 01:52 PM   #49
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My parents let me stay at home during University.
Pretty common in my circles. The only way I could go to college was if it met two criteria. It had to include a scholarship and it had to be in commuting distance. I was lucky to get the scholarship but the commuting was a bear. One bus, all the way to the end of the line, then two subway trains, each one also to the end of their respective lines. School was at the exact opposite end of NYC from where we lived, so commuting was nearly two hours each way for four years. I got to be really good at doing most of my studying on a crowded train.

But my parents were happy to help as much as they could, since I was the first in my family to get a college education, and I was very grateful for what they did.
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Old 04-02-2021, 02:56 PM   #50
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I would like to. But who knows how much money i'll have. So maybe. If we can do it sure. As it stands we are paying for college for sure. And since DH wants to work till after college is done maybe we'll have a ton of extra money. Then sure.
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Old 04-03-2021, 01:09 PM   #51
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Pretty common in my circles. The only way I could go to college was if it met two criteria. It had to include a scholarship and it had to be in commuting distance. I was lucky to get the scholarship but the commuting was a bear. One bus, all the way to the end of the line, then two subway trains, each one also to the end of their respective lines. School was at the exact opposite end of NYC from where we lived, so commuting was nearly two hours each way for four years. I got to be really good at doing most of my studying on a crowded train.

But my parents were happy to help as much as they could, since I was the first in my family to get a college education, and I was very grateful for what they did.
I got lucky that University was close enough I could have walked if I had to (about 3 miles.) Usually I had the use of a car (city bus was another possibility.) I too had a partial scholarship but that was WAY back in the days when I could earn the tuition AND books with half a summer's work. The other half-summer's work provided spending money for the school year. With room and board covered, school used to be (dare I say it) almost "cheap." DW (we were dating at the time) eventually lived on campus. She wanted to escape her parents' control. She was able to find student housing (no food) for $30/month! I'm guessing you'd be hard pressed to find student housing today for $30/day. YMMV
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Old 04-03-2021, 01:27 PM   #52
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Pretty common in my circles. The only way I could go to college was if it met two criteria. It had to include a scholarship and it had to be in commuting distance. I was lucky to get the scholarship but the commuting was a bear. One bus, all the way to the end of the line, then two subway trains, each one also to the end of their respective lines. School was at the exact opposite end of NYC from where we lived, so commuting was nearly two hours each way for four years. I got to be really good at doing most of my studying on a crowded train.

But my parents were happy to help as much as they could, since I was the first in my family to get a college education, and I was very grateful for what they did.
That brings back memories, braumeister. I lived up in the northeast Bronx, and my school was at Borough Hall in Brooklyn. That meant I had to pass through all of Manhattan and under the East River to get to school. I did that for 4 years.
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Old 04-03-2021, 01:42 PM   #53
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That brings back memories, braumeister. I lived up in the northeast Bronx, and my school was at Borough Hall in Brooklyn. That meant I had to pass through all of Manhattan and under the East River to get to school. I did that for 4 years.
Gives a whole new meaning to being "underwater" on your school loans.
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Old 04-03-2021, 01:56 PM   #54
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Never say never, but the plan is within our means - and w/n reason.

We offered to pay in State tuition (and room & board if the major was worth it, and not available locally). Otherwise go locally, and we would buy a used vehicle for transportation.

The kiddos were always welcome to a roof over their head and food.

Some wedding expenses and wedding gifts were incurred.

Some seed money for Roths. Birthday/ Christmas gifts. Grandchildren gifts.

No, absolutely no, co-signing loans. (Would give cash if warranted, but would not get on the hook for a loan.)

One son lived at home until recently which allowed him to save up for his own 20% down payment.

Right now I'm going into the final lap getting ready for retirement, so I'm not in the mood to disgorge large cash gifts. I don't see anything wrong with gifting a responsible kiddo with a bit of cash to help them with the first house payment.

I would not get involved in buying or financially assisting a kiddo to buy a $1.8 M house a/k/a a house that they could not afford on their own.
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Old 04-03-2021, 02:30 PM   #55
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<SNIP>

I would not get involved in buying or financially assisting a kiddo to buy a $1.8 M house a/k/a a house that they could not afford on their own.
Yeah, I wouldn't be inclined to help a kiddo buy a house that MOM AND DAD couldn't afford for themselves! So far, we've been fortunate that our kids' homes have been more on the order of $150K to $350K. Mom and dad can help with SOME of the down payments on such properties. Fortunately, the kids' SO's side of the family have also kicked in a bit. That makes it very doable.

If the kids decide they eventually want to live in a HCOL area, they will need to do what we did - w*rk for 35 years to save for it. YMMV
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Old 04-03-2021, 02:45 PM   #56
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Yeah, I wouldn't be inclined to help a kiddo buy a house that MOM AND DAD couldn't afford for themselves! So far, we've been fortunate that our kids' homes have been more on the order of $150K to $350K. Mom and dad can help with SOME of the down payments on such properties. Fortunately, the kids' SO's side of the family have also kicked in a bit. That makes it very doable.

If the kids decide they eventually want to live in a HCOL area, they will need to do what we did - w*rk for 35 years to save for it. YMMV
Actually, (with the exception of the 2 out of 3 SOs' side of the families not being in a position to assist) my MM - doesn't vary all that much
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Old 04-03-2021, 02:51 PM   #57
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That brings back memories, braumeister. I lived up in the northeast Bronx, and my school was at Borough Hall in Brooklyn. That meant I had to pass through all of Manhattan and under the East River to get to school. I did that for 4 years.
I was going the opposite direction. Lived in southernmost Brooklyn and went to school in northernmost Bronx. Happy to have simply survived it!
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Old 04-06-2021, 03:30 PM   #58
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I live in the Bay Area also. I don't think we could help our son enough so that he could buy a home. I hope the kids in the original e-mail realize their property taxes are going to be over $18k per year!

Luckily our other son lives in the midwest so should be able to afford a home on his own once he decides to buy. We may help a little but he should need less than $10k in help to get him into a home.
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Old 04-06-2021, 03:35 PM   #59
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They can solve this problem by moving to LCOL like Texas.
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Old 04-06-2021, 03:39 PM   #60
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I live in the Bay Area where housing costs are insane. My neighbor is giving a ton of help so their 25 year old daughter can buy a $1.8M house (it's a 1500 sq ft. starter home, not extravagant). They are almost certainly helping their two other kids with rent too. If not for these expenses, I'm quite certain they could afford to retire.

This got me thinking about how much help I should anticipate giving my children in their young adult lives. It is unlikely they will be able to afford a house nearby without some significant help. However that could derail my early retirement dreams.


Curious how much others have earmarked for helping kids launch and how you balance that with early retirement.
If you haven't already, read the book The Millionaire Next Door. It has a chapter dedicated to financially helping adult children, and the deleterious effects it has on their future savings. I don't plan to help my children significantly for home purchases, etc. I want them to work hard for their home, and I want them to buy a home they can afford. If I'm propping them up, it's very likely they'll end up in a neighborhood they can't afford to live in, spending all their money that should be going to savings into paying taxes, utilities, etc.
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