When your 30 something child asks for money- what is response?

[kumquat]

If you plan on leaving you kids something anyway, why not give it to them when they need it.

Why not, indeed. Our DD is currently looking for a house to buy since her rental place is being converted to condos (and not one she would want even if priced right). We told her we'd help with the down payment to get it to the 20% minimum required for cheaper mortgage. It may actually be over 100% since she is in a cheap housing area and we always intended to give both kids ~$100K of their "inheritance" when they went house hunting. DS graduates from university in the spring and he and his DW are also window shopping for houses. $100K will only be about 50% for him.

We don't need it, they can use it, why not?

 

[73ss454]

I have a few of those 30 year olds out there. We have been blessed that they are both doing well and haven't asked for anything as of yet.

My thought is that if you feel comfortable, isn't it better to give with warm hands than cold.

 

[Coach]

I'm childless, but when I was about 25 I borrowed some money from my Mother. I came to regret it -- it felt like something that stood between Mom and me until it was paid off. If you want to help and can afford it, just give it. But I wouldn't loan it.

Coach

 

[cashflo2u2]

ok, the all clear just sounded. Our daughter just called and is no longer requesting the $2,000. I don't completely understand it but the loan underwriter said the $2,000 needed for her to show could not come from a parental gift. Anyway, she has second thoughts about asking us and going a different method. She had paid $500 for an appraisel and it did not appraise and she was trying to salvage the $500 by doing a differnt loan that needed the $2,000. Anyway, thank you for all the wonderful and insightful comments!

 

[Zoomie]

At the risk of sounding like a jerk, I give my daughters whatever they ask for. It is harder being young these days than it was for my generation (boomer). I think I am lucky in that they only ask when they need the help. We lost our first-born daughter when she was 29 and I am thankful that we can help them, even their friends. They are all a blessing.

 

[Moemg]

At the risk of sounding like a jerk, I give my daughters whatever they ask for. It is harder being young these days than it was for my generation (boomer). I think I am lucky in that they only ask when they need the help. We lost our first-born daughter when she was 29 and I am thankful that we can help them, even their friends. They are all a blessing.

You definitely do not sound like a jerk . I lost my son at 32 so my daughter who was always precious to me is now soo much more so .

 

[Dreaming 2010]

My bold. Perhaps something like what your hubby did to make the money originally?

You are correct. When my DH suggested that our DS pay the car loan back the mother bear in me came out. I cried that we needed to give him a break, we didn't need the money. My DH has enormous character and wanted to build it in his DS so he held firm against my tears. He was right and our DS and how he conducts himself today makes me so proud

 

[deepc]

Never a dime from our folks on either side. Not for college, not for nothing. So grew up a cheap and mean person, now FIREd.

Then, from another part of the family we saw another way. The cousin never worked a day in his life. Sponged off Mom and Dad, got married and now his wife supports him. Used to think very poorly of that part of the family.

Then, realized that what made this acceptable to them was the no harm/no foul way that the money was shared. The parents didn't care that the kid was lazy and shiftless, they accepted him as he was/is. The wife don't care, she accepts him for what he is. The cousin and family are the happiest folks I know, certainly happiest of all our kin.

So, while there's no way I'd want to raise a good for nothing lazy bum like this, I envy the way that this part of the family shares resources. Again, the key is that there's never an expectation of recompense, no guilt for borrowing, no blame for non-repayment. All for one and one for all sort of.

Bizarre but their lack of concern is kind of cool.

 

[Rambler]

I think it really depends. I have borrowed from my parents, once, to buy a piece of property. I had almost all of the money, but I was living in Japan at the time (20 years ago) and my money was in Japan. I asked dad if I could borrow something like $40k...a very big sum for him, and me, at the time. But, when I did, I came to him with the proposal including a repayment schedule and interest, in hand. I knew the market rates, I knew what he was getting on CDs (that's still where they have all their money, believe it or not). He said he would check if he had any roll-overs coming, he did, and then agreed to lend it to me. We scheduled the closing right after the CDs rolled so that he could fund the deal when the property closed. The deal was that I would refund the majority as soon as I got to Japan, and had a year to repay the rest. I had it all paid off, including a year's worth of interest, in about 3 months. Good deal for him, good deal for me.

When your kid (OP) came to you asking for help, did he have a plan with him to repay? Was he offering interest? Or expecting a handout? Also, what are the considerations for leaving something to him upon your "departure"? (I ask that because we are hoping to leave our kids a substantial amount, but we are not telling them that. On the other hand, if death taxes are going to take away substantial amounts of what I have worked so hard to save, I won't mind transferring some of it early in the form of "help" here and there...not so much that it becomes a normal part of everyday life for them or "expected" as in "where's my allowance?" type of feelings, but a boost when a down payment is needed on a house, tuition help for grandkids, etc.

Bottom line is that while all the suggestions here provide food for thought, none of us know your situation like you do, and thus we may be miles off the mark. Listen to your intuition, and you'll be fine.

R

 

[youbet]

We're missing details as to whether this refinancing is a sweet deal that shouldn't be missed or not.......

But, if my son approached me and had researched his mortgage situation and found an opportunity to improve things nicely through refinancing but was concerned he'd be cutting it close with the family (wife and 3 kids) emergency fund, I'd kick in two grand lickity split and take him out for a beer to celebrate!

By the time your offspring hits the mid-30's, your role in their character development is minor, if anything. If the kids have their heads on straight, are solid team members within the extended family, sharing small change like two grand to put together a refinancing deal should be no issue. I'd get a kick out of it and always be proud I helped in a small way to make it happen.

YMMV. No two kids are the same. But look at the situation and decide if that $2k is or is not going to be a good investment within the family.

 

[youbet]

My thought is that if you feel comfortable, isn't it better to give with warm hands than cold.

I like the way you put that!

We're all familar with FireCalc. We all know that depending on how things go during our retiement years, we'll croak somewhere near broke or with more than we started with or somewhere inbetween. I wonder that as time passes if those advocating never gifting to the kids "to make them tough" will hang on to every last penny even if their financial timing is lucky and they're going to pass out of this world leaving zillions behind.

I'm sure not planning on gifting amounts that would jeopardize my FIRE status. But if over the years of retirement ahead, investments, inflation and DW and my own personal needs/desires combine so that we follow one of those FireCalc graph lines that points to the sky, we're sure not going to wait until we're old and senile to enjoy the fun of sharing with the kids!

 

[citrine]

I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

 

[FUEGO]

I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

If they have a large estate, annual gifting can be a smart way to avoid/minimize estate taxes in the event of your parents premature demise. As much as I don't want to take handouts from my parents, I'd rather take it instead of uncle sam!

 

[Martha]

I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

Like Fuego says, it can make tax sense for your parents. Take the gifts, save it for when you need it.

 

[brewer12345]

I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

I have a similar issue. MIL helps out DW's two sisters, one of who does not need to be sponging and the other is a poor med student. We are stable and relatively well off, so do not need any help. Yet we regularly get offers and outright gifts because MIL wishes to be "fair." I find all of this awkward, but defer to DW's judgement that refusing the money would be rude. Since I would like to maintain good relations with both of my MILs (FIL remarried), I just try to channel the money toward our kids. Thus far, most of it has ended up in custodial accounts.

 

[ziggy29]

I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

Yeah -- as mentioned, if there are potential estate tax issues and they are in a very high tax bracket on interest for money they are not likely to ever need, what they want to do is a sound strategy if the money would just be willed to you and your siblings anyway. It is actually a very common estate planning tactic.

In a bizarre way, in terms of estate planning and current income taxes, if they are confident they don't need the money they want to give, you are helping them out by taking it!

 

[citrine]

I know about the tax stuff....I just feel strange taking it and would probably just drop it into the retirement/mutual funds.

 

[FUEGO]

I know about the tax stuff....I just feel strange taking it and would probably just drop it into the retirement/mutual funds.

If it would make you feel better, give em a stack of vanguard deposit slips and just let them make the check out to vanguard for IRA or taxable account purchases. That way they know you aren't just wasting it away.

 

[ERD50]

... Yet we regularly get offers and outright gifts because MIL wishes to be "fair." ... Since I would like to maintain good relations with both of my MILs (FIL remarried), I just try to channel the money toward our kids.

"Equal" is the easiest, clearest and most defensible way to be "fair". Take it or you will put her in an uncomfortable spot, which diminishes the joy she gets out of giving the money.

Channeling to the kids is good (that is probably how she would like you to use it, but maybe she wants you to use it for "splurges"?), and/or put it in a separate account - if MIL has an unfortunate change in circumstances and needs help down the line, use it for that.

-ERD50

 

[Milton]

No one on this board can answer this question for you. It depends on your relationship with your child, your child's financial state, and your financial state. If you child has a solid grip on finance, and you have the $2,000 laying around then maybe so. If you plan on leaving your kids something anyway, why not give it to them when they need it.

I would not loan them the money! I loaned DD money and the repayment was never on time. Finally, we told them they did not have to repay it. It would come out of her share of our estate when the time came. It caused more stress on both of us, her knowing she was not paying, and us feeling some how cheated. When we changed it to a gift it seemed different.

I agree with all of the above ... very good advice.

A loan is definitely not the way to go, for so many reasons.

 

[brewer12345]

"Equal" is the easiest, clearest and most defensible way to be "fair". Take it or you will put her in an uncomfortable spot, which diminishes the joy she gets out of giving the money.

Channeling to the kids is good (that is probably how she would like you to use it, but maybe she wants you to use it for "splurges"?), and/or put it in a separate account - if MIL has an unfortunate change in circumstances and needs help down the line, use it for that.

-ERD50

That is exactly the route we have taken for exactly those reasons.

It is highly unlikely MIL would see a drastic change in circumstances. She has a semi-COLAd pension from a state plan that is more than she can spend every month (she actully recently asked me how to invest the extra $1k/month left over), owns her home free and clear, and has a decent sum in an IRA. She is debt averse and takes my advice on finances. I think she is pretty much set for life.

 

[Bestwifeever]

My late FIL used to put his adult kids' names as co-owners on CDs (back when the CD rates were sky-high). When the CDs became due he didn't give the proceeds (interest or principal) to the kids, so I'm not sure why he did it--maybe he thought we would be responsible for taxes on the interest? Maybe he thought it would escape inheritance taxes if he passed away before they matured?

Although we would gladly give my two adult kids $2K if they asked for it, they would never ask for it, so that's easy for me to say

 

[REWahoo]

My late FIL used to put his adult kids' names as co-owners on CDs (back when the CD rates were sky-high). When the CDs became due he didn't give the proceeds (interest or principal) to the kids, so I'm not sure why he did it--

My late FIL did the same thing. His logic was this would allow my DW to gain access to the funds if he became seriously ill and unable to care for himself.

He did - but since he had also given her power of attorney, the CD never became an issue.

 

[Bestwifeever]

That makes sense, REW--but my MIL was still alive and well and the co-owner of most of their assets (and would later be his caretaker, with POA, etc.), so that made it even harder to figure it out. We chalked it up to just another of Henry's quirky ideas about how to handle money.

Interestingly and possibly related, my SIL convinced them to let her go through their financial affairs and immediately had them put everything into a trust a few years before FIL passed away.

But we never asked or received $$ from them.

 

[vicente solano]

I have never received a gift on Saint Day!!! I am so jealous. People don't even call on Saint Day anymore...


As for the OP, I don't have kids, so take it with a grain of salt, but unless the refi would prevent a foreclosure, I'd probably say no.

Firedreamer, If you tell me the Spanish version of your first name I´ll make a point of PMing you on your Saint Day...