Story that ties into this... in my mind at least.
I was a very good runner in HS, and decided to carry that into college along with tackling an engineering degree. I remember my father throwing out a very good question, one I didn't fully appreciate at the time... "Are you preparing to be an Engineer or a professional runner?" Running to me, and competing was a religion of sorts, and at the time I had all kinds of justifications to continue in it (it keeps me challenged and forces my to struggle and balance life, in a positive way). It took me 3 years to figure this out on my own, what my father really meant. The workload of getting my degree while trying to train and complete (5+ hours a day and weekends for travel to compete) just didn't work when I got to the higher level courses. I tried doing minimum course load (keeping an B+ average) for two years to stay above it all... it was difficult and I knew it would keep me in college an extra year. I just never told my parents that, until 3.5 years in.
My 4th year I stopped the running, focused on graduating, but at that point it was going to take me a 5th year. My parents had the ability to cover this, but I remember the summer before my 5th year when my father told me I'd be covering my final year of school myself. At the time I felt a bit mixed about this (entitled... somewhat?) it wasn't something I had planned for. I didn't dare argue with him, but I remember thinking it wasn't fair, and keeping that thought to myself. As a 21 year old, my plans involved my comforts. All I'd ever known was my parents covering college. We grow up and lived modestly, but I always assumed (knew?) they'd cover my school, because they did. Until they didn't.
Whoa is me, right? No... I look back at this as being one of, if not the most valuable things I ever learned from my dad. Not only did I get straight A's that final year, but I appreciated every single cent I had to borrow to pay for the final year. Something I had no appreciation for, until that 5th year. My point isn't about the specifics of finances... but about the lessons we take from struggle. And struggle is a very relative thing, in life - it builds character. When someone is forced to do something on their own... it sticks in a different way. I worked more that year, because I wanted to get rid of this debt as soon as I could. And I tackled that debt when I entered the working force. I grew to appreciate having it, and tackling it on my own. Knowing what it represented. And there is the key point to this post... I did n't appropriately appreciate my parents paying for my college, until that 5th year. At the time, I would have said I appreciated it, but the reality is... when we get something for free, we can lose sight of that. Because it's just there, you can rely on it. The key to growing up is learning to rely on ourselves. I love the way my parents managed that with my siblings and me... to this day I know if I really mess up I can turn to them, but they instilled values and lessons and expect us to now live our lives the way we want.
Being a parent myself now, I find myself searching for ways to inject this kind of lesson for my daughters. I have the means to give them very comfortable lives, but I also want them to learn to appreciate things.
Covering 401(k) payments is logical, and I can think of all kinds of reasons this is an extremely value way to pass wealth to a child... however the best gift we can give them isn't tangible. Sometimes, I think FI can inadvertently shoot themselves in the foot by providing "easy" solutions for their kids. It comes form the heart, and mind... in order to combat this I try to step back and think about how my child might feel, think, or learn from what I'm doing. If they aren't following and appreciating the result of the guidance/help... then the training wheels provided may actually be having an opposite effect.
It's interesting to talk to my parents about this period of time in my life, and how they struggled with the decision to have me pay for my final year in school. It went against their philosophy, their life plan to cover school for the kids as a means to let us enter the world debt free... but I think my father had this insight, to pass this lesson on to me, because he recognized I didn't appreciate what they were doing for me, as he saw me plan a 5th year in school just because I could (or I had decided to). He was right. Human nature... path of least resistance. Back to the message about struggle...