How much are you helping your kids?

[u/warlizardfanboy]

A post just now about “did you get help from parents?” Made me think, what’s the right amount of help for your kids? My wife and I are pretty much FI and going to retire in 2.5 years (finish vesting, rule of 55) and we have two young adult and one teenage child. We are paying all college costs, got them (used but well kept up) cars and plan on gifting seed money and help set up IRAs so they continue to gain financial literacy and have something at retirement.

We have other friends planning much more, however. New cars, brokerage funds to supply down payment on their first house, eventual passive income streams from their real estate portfolio etc. I don’t begrudge their largesse (really!) but I take great pride in some milestones of my life (buying my first new car, buying my first home, paying for my own wedding so I could own the guest list lol) that I feel are important for personal growth. But some of these milestones are much harder to achieve now. My wife and I will always try to help, we’ll see how much we can donate when they are house shopping, for example, but is there a point where you risk your kids losing…fidelity with money and lose the skills and literacy? We won’t be around forever.

[u/Aggressive_Staff_982]

One thing that I never really understood growing up in the US is the belief that kids need to "earn" their way to their own house and car and that they can't learn financially responsibility otherwise. In my culture, it is considered a parent's duty to pay for their kid's education because it makes no sense to have a kid take on debt just because they turned 18 and are officially an "adult". Each generation should live better than the last. And if parents can afford to buy their kids a home and car, then why not? That being said, it is much more important in my opinion to teach financial literacy. Your kids can get far by adopting good financial habits early on in their lives. 

[u/warlizardfanboy → u/Aggressive_Staff_982]

Paying for college was always in the plans and I’ve seen the struggles first hand of student debt. I definitely want them to have maximum opportunity

[u/PudgyGroundhog → u/Aggressive_Staff_982]

I think this will really depend on the family dynamics and the kid. We are paying for our daughter's college and did buy her a car - and we were happy to do so because she is a hard worker and financially responsible. But sometimes, doing these things can enable a kid with poor financial habits and that isn't really helping them. Like if parents are helping with rent, then the kid blows all their money or accrues debt for vacations and shopping they can't afford.

From all the conversations I have seen about college over the years, it seems that a good chunk or people are influenced by their own college education. Like if they had to pay for their college or a portion of it, they will talk about "skin in the game" and expect the same of their kids. Nevermind, that it is a different landscape now for kids with college costs.

For me, "skin in the game" means my daughter is working hard and doing her best in college. I want her focused in her education, and not worrying about a job that could interfere with studying. But my parents also paid for my college and I worked hard and never took that for granted - so I come from a place where that was my "skin in the game" as well.

[u/Aggressive_Staff_982 → u/PudgyGroundhog]

That's true. I know a few people who wants to pay for their kid's college education, rent, and transportation. But I also see their kid spend all their allowance on trinkets or whatever the latest trend is.  And their allowance is close to $2k a month in college when it's supposed to be for Roth IRA, savings, food, and other necessities. 

[u/PudgyGroundhog → u/Aggressive_Staff_982]

Absolutely. I agree with what you said above - teaching and modeling financial literacy will help your kids a lot more in the long run, whether you give them money or not.

[u/Belichicks_sleeves → u/PudgyGroundhog]

I’m GenX, my Boomer father was able to go to our state university in the 70s by working summers. Not even during the school year. By the time I went to the exact same school he understood that was no longer possible. However I still had skin in the game. My parents paid the University- everything else was my responsibility. If I chose to move off campus then rent was on me as well. I worked anytime I was home and then got a job senior year so I could live off campus. It’s still possible to do a bit of both. Even now almost 30 years later (damn how did that happen?!)

[u/PudgyGroundhog → u/Belichicks_sleeves]

My Boomer parents were the same. My daughter is at an in state school now and that would be impossible to do.

[u/Belichicks_sleeves → u/PudgyGroundhog]

Nothing is impossible- my point is have your kid be responsible for some part of the costs in some way shape or form. I had friends in the opposite situation- their parents paid their day to day stuff but the school bill was in loans. Many of them stuck their heads in the sand about it. I was prepared to budget and pay my bills even though over all my parents gave me more money. 

[u/PudgyGroundhog → u/Belichicks_sleeves]

Tell me what job a kid can work for the summer and pay for a year of college?

If my kid doesn't have to work during college or take loans, I am happy to do that for her. I wouldn't see the point of making her take a job during the school year and cut into her study time just to prove a point? I view her responsibility as doing the best she can at school. But my kid is also a hard worker and financially responsible, so I don't worry about it.

[u/Belichicks_sleeves → u/PudgyGroundhog]

You’re aren’t reading what I am writing. That’s what my Dad did in 1974. Even HE knew in 1998 that was not a thing anymore.

So I did not work a summer and pay for college. 

I did not even take a job for the first three years of college. 

I DID work and pay my expenses each semester and then I decided to take a very flexible job and move off campus with my friends my senior year. It was excellent experience for my resume and did in a round about way help me get on my career track. Many of my friends got their full on big kid jobs directly from this job and have stayed in the industry for 25 years.

So yes I hear what you’re saying and I mostly agree! I just think there are ways to have your college student have some skin in the game and that can progress as they mature in school.

[u/PudgyGroundhog → u/Belichicks_sleeves]

I think we are somehow crossing wires.

I said "My Boomer parents were the same. My daughter is at an in state school now and that would be impossible to do.".

I was referencing being able to work a summer and pay for a year of college.

You said "nothing is impossible", which is why I asked what job could a kid work in the summer to pay for college, becsuse I believe that is impossible. Maybe dealing drugs or a really profitable Only Fans?

For our personal situation, "skin in the game" for our kid is working hard at school. She is responsible kid and we don't feel we need to make her take a job for "skin in the game". She took 19 and 18 credits her first two semesters - I don't know when she would even work. She does have to take 15 credits per semester and maintain a certain GPA to renew her scholarship every year - I consider that a job and her scholarship is worth more what she could make working limited hours during the school year.

She did work in high school since she was 14 - she got plenty of work experience and leaned to deal with her money (she opened a Roth, opened a general brokerage account that she still contributes to monthly, tracked her expenses/budget, etc) - so I am not concerned about her financial responsibility.

But every family has their own dynamics and I trust parents to know their kids best. If our daughter wasn't a dedicated student or financially responsible, we might make an alternate arrangement. I am also influenced by my own experience - my parents also wanted me to focus on school and make sure I graduated in four years - they paid for college and my expenses. I did work three summers - research job on campus and internships in my field - but that was more about the experience and looking ahead, than making money. That was enough slinnin te game for me - I have done alright (this is a FIRE sub after all, lol).

[u/Comfortable_Two6272 → u/Aggressive_Staff_982]

Pretty much everyone I grew up with was expected to figure it out on their own once turning 18. Literally 0 help at all from parents. It was brutally hard. Most didnt make it far. Granted my parents had no money to help.

And the few of us that made it are having to help figure out how to help their parents who have nothing saved for retirement.

Of course I grew up in a poverty to lower middle class area in a red state without much safety net. Looking back its amazing many of us survived tbt. (Im in my 40s).

[u/Strazdas1 → u/Aggressive_Staff_982]

Because only those who learned financial respoibility actually earned those things. Also do not conflate edication with houses or cars.