When giving money to children, what criteria to avoid entitlement?

[nancyfrank232]

What rules govern your giving money to your children? When do you stop?

What age do you start giving them an allowance?
How much?

Do you pay for their devices?
Do you pay for their vacations?
Do they live rent free?
Do you give them free university?
Buy them a car?
Downpayment on a house?

 

[MichaelB]

More of a general discussion, so moved the thread to other topics,

 

[ckelly78z]

Most of this discussion will hinge on how the giver was brought up by his/her parents, and the funds available to share.

My parents were very frugal on one good income that my Dad worked, and I didn't get many (if any) handouts. I think they paid for my brother's college books, and the flowers/rehearsal dinner at my wedding. I grew up before everyone had a device, vacations were camping, no university for me, but I did live rent free until 21.

I have tried to help my kids out much more with college expenses, and cars, but they work hard for the other things, and pay their own cell phone, and car insurance bills, along with any (co-signed) car payments.

 

[fh2000]

What rules govern your giving money to your children? When do you stop?

What age do you start giving them an allowance?
How much?

Do you pay for their devices?
Do you pay for their vacations?
Do they live rent free?
Do you give them free university?
Buy them a car?
Downpayment on a house?

I have done all except the last one for my 2 adult kids. DW is even willing to do that when kids are ready to purchase.

For now, I mostly fund Roth IRA and HSA for them.

 

[nancyfrank232]

More of a general discussion, so moved the thread to other topics,

Thanks. My bad!

 

[Dash man]

We didn’t do a lot until they were adults.
Now for son #1:
We’ve passed down old cars, and bought a new safe car when our grand twins were born.
We also let them live rent free in a townhouse we rented for years, since after having twins they couldn’t afford anything bigger than a one bedroom apartment.
Paid off student loan.
We give occasional cash gifts.

For son #2:
We’ve given larger cash gifts.
They are considering moving near to us, so we will buy a townhouse for them to live in rent free.
Have paid for some flights to visit us or her parents, and other family.

As long as they live responsibly and care for our grandkids, we’ll help them.

We’ve funded 529 plans for our grandkids.

 

[PatrickA5]

What rules govern your giving money to your children? When do you stop?


Do you pay for their devices?
Do you pay for their vacations?
Do they live rent free?
Do you give them free university?
Buy them a car?
Downpayment on a house?

We've done all that and more. Neither DW or I had any of these done for us from our parents. They're good kids and we can afford it, so happy to do it.

 

[jollystomper]

What rules govern your giving money to your children? When do you stop?

What age do you start giving them an allowance?
How much?

Do you pay for their devices?
Do you pay for their vacations?
Do they live rent free?
Do you give them free university?
Buy them a car?
Downpayment on a house?

Allowance - I recall we gave them from the age of 10 to 18. It was not much, maybe $10-$20 a week, I can't remember (so it must not have been much ). However, chores were expected to be completed to earn the allowance. Neither DW or I received an allowance from our parents.

Devices - Basic talk/text mobile phones we paid for, smart phones were on them. They could stay on our family plan, but once they realized mom and dad could track their activities and control calling/text is needed, they paid for their own separate plan. We paid for computers for high school (actually I built them from spare parts as I upgraded mine) and both them their initial laptops for college.

Vacations - as adults we pay for their vacations if we want them with us, or want them to visit us. If we go somewhere and they choose to come along, we might pay for a portion (e.g. they pay transportation, we help with some of the lodging, we cover meals).

Rent free - only if they are enrolled in college. If they are working they pay a small amount (which we have "rebated" once they got their own place).

College/university - We paid undergraduate tuition for up to 5 years. If they lived on campus, we paid for housing and a meal plan (but if they used up the meal plan money they were on their own). If they lived off campus we paid up to a certain limit for rent based on the area.After 5 years, if they did not get their degree they were on their own, but we made some exceptions based on unique situations. For graduate school they are on their own. Our parents paid for our undergraduate education so we tried to do the same.

Car - We promised them either a car (a new used one up to a certain limit) or the equivalent in cash upon their undergraduate degree.

Down payment - none have bought houses yet, but we do plan to help them out with some of the down payment (they do not know this).

At this point, with all of them adults, we provide random assistance, based on situations, so that it would reduce the chance of them taking it for granted. For example, a car accident that was not their fault we would help with any deductible. When we received monies from my parents estate we passed along some of it to them. We give them small gifts for birthdays and Christmas, but have given large gifts for "milestone" birthdays.

The children all have different personalities, some have more of an "entitlement" mindset than others, but at least they all tell us they appreciate what we do and have rarely asked us directly for money. The few times they did, based on the circumstances we gave them loans (which they did pay back). At times they have asked us to help their friends in place of us helping them. We never discuss with one what we have given the others - if they want to share with each other than is up to them.

 

[ITTN]

I give them money as a gift, therefore there are no rules or strings attached.

 

[timbervest]

Adult children: One we still subsidize money toward rent as they are not earning at a level that they can be fully independent. The other is self sufficient. Both are on our phone plan as it just makes sense. Each received undergrad tuition and board so no loans. Grad school was on them. We have invited them on vacations for which we paid but less so now. We are paying for part of a wedding. We fund ROTHs.

They do not appear to act entitled. My philosophy is I give when I want to or if there is an emergency. As we are FI, the kids are going to inherit the excess eventually so why not share some of it now?

 

[Animorph]

Allowance - We started "Mom & Dad's Bank" where they could save their money and earn a ridiculous interest rate that made the compounding obvious. No leaning on them to save. They took us for a lot.

Occasional spending - On special occasions like vacation trips we ended up giving them a set amount of cash, to spend on souvenirs or save. That stopped the constant nag for things from the gift shop, and was always saved as it turned out.

As adults - Private loans for first cars if needed, paid back with interest. We kicked them off with Roth contributions, when they had earned income to cover it. Now it's just whatever I can't avoid DW spending on them. Less than $1000/year. We do let them know we have their backs if they're in a tight spot. But they both seem to be saving plenty.

 

[Athena61]

I’m in a second marriage: 2 adults daughters from me, and 3 adult children from DH. My girls had their undergraduate tuition and expenses paid for, plus all living expenses except their own entertainment and personal things. They moved out when they were ready. All of this when I was still married to their father. Post divorce I’ve given money towards down payments, weddings, additional university schooling. Not a lot, but still gave what I was comfortable doing. My daughters have never asked for a dime since they’ve been on their own so all of that was what I volunteered to do. I’m really proud that they have figured out how to balance their budgets. My current husband and I keep our accounts separate at this point (3years). His kids have reached out to him in as needed basis. Now that he’s retired he’s more conservative with what he’ll help with.

 

[The Cosmic Avenger]

I think a lot depends on whether they seem to be making an effort. It's hard to quantify or even describe, but an adult child who puts in 60 hours a week as a social worker or teacher feels more deserving to me than one who takes odd jobs when feel like it because they don't like that most jobs expect them to show up on time.

For example, my parents sent me checks when I told them I got a new job, or a big promotion or raise. True, those times are when I wasn't as desperate, but I expected no help from them as I wasn't in danger of being homeless or not being able to buy food. And I was able to treat myself to a meal out or some new work clothes right away with that money, rather than waiting many months to save up.

We gave our kid an allowance, but they are extremely responsible, and got excellent grades (which we told them was their "job"), and so we pay for their phone. If they run out of data, though, they pay for additional data. (They're a senior in HS, so later this year I'll get to "Blow That Dough" on tuition!!) They actually talk about wanting to work and pay for themselves, so I'm not too worried about overdoing it.

 

[ncbill]

No issues here with the kids making an effort...at least so far.

Might seem harsh but in addition to applying for other aid we did require them to apply for ROTC scholarships for undergrad...both received them, though one re-applied, was accepted, & moved on to a service academy (their original first choice) after the first year of undergrad.

We've been fortunate to receive several hand-me-down vehicles from relatives for them to use.

I've no problems with them moving back in as long as they pay rent, though with their respective military service obligations I doubt that will happen.

 

[nancyfrank232]

Allowance - We started "Mom & Dad's Bank" where they could save their money and earn a ridiculous interest rate that made the compounding obvious. No leaning on them to save. They took us for a lot.

Occasional spending - On special occasions like vacation trips we ended up giving them a set amount of cash, to spend on souvenirs or save. That stopped the constant nag for things from the gift shop, and was always saved as it turned out.

As adults - Private loans for first cars if needed, paid back with interest. We kicked them off with Roth contributions, when they had earned income to cover it. Now it's just whatever I can't avoid DW spending on them. Less than $1000/year. We do let them know we have their backs if they're in a tight spot. But they both seem to be saving plenty.

There are some really cool ideas here. Thanks!

What age were the kids when you started the “Mom & Dad’s bank”?

 

[Dtail]

My children are grown at 30 and 27.
I am still assisting the younger one with college loans and a portion of his car insurance. The Ex provides him housing and some food. He has a full time job and trying to get back to Vet school.
There are 5 kids between the DGF and I and to date not one of them is truly successful (hope down the line), thus there will not be any enabling assistance from a major money standpoint.

 

[pacergal]

My folks raised 4 kids--we got an an allowance, 10% went to church, 40% to savings, 40% to spend. We had chores to do every week. Parents paid for weddings (simple church ceremony and home receptions), parents paid for a car (one of their used) or we had use of a car when at home. Some of us paid for our own college, some my parents paid. All depended on how their finances were at the time. It's all good, we all got what we needed at the time. And the best thing we got was two loving parents and a great financial education on LBYM and saving!
Fair does not mean Equal.

For our kids--they got allowances sometimes, depending on chores done or our finances.
We have helped with cars, phones, college , etc. as needed and if/as we had the money.
Both kids have told us thanks so many times. They are appreciative of any help we give. They also are very aware that we will not put our own retirement and finances in harms way and will only offer to assist if the money is there.

 

[CRLLS]

I appear to definitely be an outlier in this group. DS1 got no ongoing help when he graduated from College. We did help him a couple of times when he needed to meet rent. That was it. DS2 joined the service and never needed rent money. DW and I never went to our parents asking for assistance. We learned to LBYM. I know getting started is tough. Making them responsible adults and learning how to LBYM is not helped by paying some of their ongoing bills. If we live to the average age, they will both have a nice inheritance.

 

[MissMolly]

My folks raised 4 kids--we got an an allowance, 10% went to church, 40% to savings, 40% to spend. We had chores to do every week. Parents paid for weddings (simple church ceremony and home receptions), parents paid for a car (one of their used) or we had use of a car when at home. Some of us paid for our own college, some my parents paid. All depended on how their finances were at the time. It's all good, we all got what we needed at the time. And the best thing we got was two loving parents and a great financial education on LBYM and saving!
Fair does not mean Equal.

For our kids--they got allowances sometimes, depending on chores done or our finances.
We have helped with cars, phones, college , etc. as needed and if/as we had the money.
Both kids have told us thanks so many times. They are appreciative of any help we give. They also are very aware that we will not put our own retirement and finances in harms way and will only offer to assist if the money is there.

So did the other 10% go to math lessons

 

[pacergal]

 

[Philliefan33]

Our DDs got allowances starting in first grade. Allowance was (grade)x$1 per week. Ten percent of allowances and monetary gifts had to be saved. As they got older and realized that, for instance, $6 a week did not go far once they started to have a bit of a social life, there were opportunities to do extra chores to earn more money. They each had part-time jobs by the time they were 16 years old.


We paid college tuition and room&board. They were each responsible for paying for their own books and social life. We kept used cars for them to drive.

We helped oldest DD a little when she was a poor graduate student but it didn’t amount to much. We let her stay on our cell phone plan, and would do things like fill up her gas tank or buy her some needed clothes occasionally. She never asked for help but appreciated what we gave her. (I would have helped more, but I knew she was proud of being able to make it on her own).

We offered to loan her some money when she and her BF (now husband) bought their house, but they didn’t need it. Instead, they asked if that offer would still be there if a big unexpected expense hit them before they had a chance to replenish their savings. So far no need to help here.

Youngest DD and her husband are talking about buying their first house. We will offer the same to them as we did the other couple.

 

[Katiek]

No kids, so this is based more on my experience with my parents and nieces/nephews/friends, so take it for what you think it's worth. . . I don't think any rules about what you pay for or how much you give can protect you from "entitlement". Some parents are very generous, but their kids appreciate the effort that goes into the gift and use the gifts as a foundation for their own hard work and generosity. Other kids don't get much, but they can be unappreciative.



In my experience, if kids are appreciative of smaller gifts, they'll be ok with larger gifts.

 

[RobbieB]

I got a dime a week but I had to pick up all the dog poop to earn it.

But I did get college (room & board & tuition) I had to pay for books and fun!

Bought all my own cars and paid rent between graduation and leaving home.

 

[Extra Medium]

There’s a podcast on this subject called The Art of Allowance that I like.

 

[Teacher Terry]

Nancy, I didn’t think you had kids.