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Reader Case Study: Is it Okay to Subsidize my Spendypants Adult Children?

It has been a good while since we’ve done a reader case study here on MMM, but that hasn’t stopped them from arriving in my inbox. And since 2022 is becoming a year of interesting financial changes, it’s time to spark things up again, go back to our roots, and start covering some of the many subjects that are cropping up in this latest incarnation of our economic world.

Today’s case study deals with family wealth, rapidly rising house prices, and a desire to be generous. What would you do in the following situation?

Dear MMM,

As long-time readers, we have seen quite a few case studies written up here, but never one addressing the rather common issue of helping out family members.

I am a retired, married Navy veteran living in beautiful (but expensive) San Diego. While we are no great example of financial success, we do own a nice home, have a reasonably sized investment portfolio and receive a solid pension income. We are also fortunate to have our grown kids (and grandkids) living nearby. Which also brings up the problem/question:

Our eldest son is married with two very young children. He and his spouse both work in demanding careers that can sometimes lead to 12-hour days, which means that paid childcare is part of the equation, on top of the child care we are able to contribute as grandparents.

They were living in a very small condo and wanted to upgrade with the arrival of the second child. With house prices in this area skyrocketing, this was an impossibility for them. That’s where we came in.

 My spouse and I offered to co-sign a mortgage and contribute a portion of the mortgage payment ($500 per month) until they can manage on their own. Fortunately, that small condo had almost doubled in value such that there would be equity to help with the purchase. So far, so good.

What we didn’t know was: 

1. They had taken out a line of credit and spent a good portion of the home equity over these past few years.

2. Instead of transferring their equity from house one to house two, they were planning to spend the rest of it on renovations to the new house. Which means their new place will be almost 100% borrowed money, leaving them vulnerable or even underwater if we see another housing market correction.

Here is the main problem: their lifestyle is pretty much an exact opposite of the MMM way. They consume restaurant food, on average, 7 days a week. They spend thousands per month on daycare. They buy new stuff almost every day for the adults and children alike. I could go on, but in short, for the last few years they have probably been spending even more than they make.

I have tried to speak with them about financial planning, but they really do not want unsolicited advice – particularly from their parents. I should also mention that they are very intelligent, kind and wonderful people.

So, are we crazy to try and help? Thoughts?

Concerned Captain 

.

Dear CC,

First of all I hear you! I can imagine your situation perfectly and I can see how frustrating that would feel.

 If it’s any consolation at all, you are in very good company because a similar story plays out across the world thousands of times every day. In fact, it’s so common that there are several age-old pieces of wisdom which address it:

Never Lend Money To A Friend (or Family Member)

If you do lend money to someone, think of it in your mind as a gift and kiss that money goodbye in advance.” You can still structure it as a loan and encourage repayment, but this way you won’t throw away the relationship along with the money in the event it doesn’t happen.

Did you ever notice how banks will only lend you money after they carefully verify that you don’t really need it?

.

With all that in mind, let’s dig into your situation a bit more.

First of all, as Mr. Money Mustache I may need to set aside my own opinions because they won’t help in this situation. But just to get them out of my system:

“WHAT?!? I can’t believe these people are buying anything other than potatoes, let alone doing $100,000 of renovations and living like multimillionaires in a situation where they are in multiple layers of debt and getting help from retired parents to pay the monthly bills!?

and

AAAUUUUGGGHH!!! With all due respect CC, why did you get into this arrangement in the first place? Adult children don’t need money from their parents except maybe in the case of severe medical emergencies!!!”

Okay, whew. That’s just me, and it’s one of many reasons I don’t even talk about money with friends and family members unless I know they already have the same philosophy as I do: that debt is an emergency, and thus you don’t spend money until you’ve actually got it.

On top of that, I’m a big fan of the idea of preparing for parenthood in advance, if you are young enough to have this luxury. In other words, do the 12-hour days and buckling down and hardcore saving in your 20s as a gift to your future self. That way, when you start a family around 30, both parents can afford to work part-time and share the burden of the real hard work: babies.

With all that off my chest, now for some more practical ideas:

In reality, your situation is not the end of the world, because everybody is going to be just fine in the long run, and family relationships are much more important than a few dollars here and there. On top of that, you’ve made this gesture from a position of love and generosity, which is the best reason to do anything.

What it really sounds like is that the two sides have a difference of expectations. You expected a certain level of military-inspired discipline and efficiency, while your son’s family – perhaps feeling stressed and overloaded by kids and work already – is trying to make life bearable and fun. And for many people, making purchases is a way to try to get that feeling.

So this difference of opinion creates tension between the Saver and the Spender. The Spender feels the judgment of the Saver, even if it is not spoken aloud. 

And because of this, they will often try to hide their spending, or justify it based on life’s hardships, or emphasize their frugality – “look I got these baby clothes on Craigslist!” – whenever they do score a good deal on something.

The tricky part of this situation is that as the Saver, you have little to no control over the situation. You generally can’t guilt or shame the Spender into submission – he or she will just fight back. Any change generally has to come from their side, but it’s also entirely possible that it will never come at all, and that is something we Savers need to learn to live with. Or in some cases, live without if you choose to separate your financial lives.

What both sides can do is simply share your feelings in the least threatening way possible. For example:

Parents: “We are proud of your work and happy that we had the chance to support you. But to be honest, I am a bit concerned that you didn’t tell us about this line of credit until after we bought the new house.

Were you afraid that we would judge you and perhaps not help with the deal if we had found out?”

Son: “Yeah, we feel stressed too – I know that I have disappointed you with this support arrangement, but I am stuck between two immovable objects here – my parents, and my spouse and the wants of my family I am raising. Perhaps we could come to some sort of agreement or compromise?”

Parents: “Yeah, that’s a good idea. I want all of your family to know we love and support you, which is why we came up with this idea in the first place. Maybe we could agree that the this financial life support will continue for two years while you get up on your feet in the new house, and then you’ll be on your own. Then, after that period (February 2024), we can end the support payments. And you will have the goal of refinancing the mortgage so that we are no longer co-signers in it?

For our part, we will learn not to judge your lifestyle and spending or compare it to ours, and I hope this will show in the form of less tension between us.

Son: “Yeah, that works for our family, if you and Mom can handle it!”

As long as everyone is an adult in this situation, I think it might give you the best outcome because you are focusing on trust, responsibility and some concrete financial targets (an eventual end of the support and a refinancing), which you can both live with.

A chance to get ahead

On top of this, the great news is that it sounds like there is plenty of room for improvement in your son’s lifestyle. Cutting out restaurants and home food deliveries alone can make a difference of $1000 per month in some food budgets, and other discretionary things can add hundreds or thousands more. In other words, if they choose to read and implement a few things from, say, the MMM Boot Camp series, they can end up with much more money even after cutting out the support money from Mom and Dad.

A Cautionary Tale for Everyone Else

Situations like this happen to almost everyone: you get into a business or financial arrangement with someone, and it turns out you have vastly different expectations.

And people like me are bound to have the worst surprises: as a natural “optimizer” of everything including money, I tend to notice waste a lot more than other people.

Leaving the window open on a winter day or a car idling on the street for half an hour are completely normal for some people, but to me they would feel like !!!BEES JAMMED UNDER MY EYELIDS!!! – it would be hard to even concentrate on anything else before I sprinted over to shut the damn window and turn off the damned car.

So if you are an optimizer, you need to work around this situation. Either don’t get into a relationship with someone on the opposite end of the scale in the first place, or learn to chill – which might be an even better outcome because chilling out is the ultimate life skill for people like us to learn.

License to Chill – What’s the Worst Case Scenario?

One thing that has worked for me is to set aside the buzzing bees of emotion and replace them with some cool, calm numbers. I’m often surprised at how things aren’t as bad as they feel. A few examples:

The open window feels like an emergency, but in reality how bad is it exactly? My calculations indicate that leaving a medium-sized window open for several hours is only about as expensive as choosing to drink one of the beers in your own fridge*.

I used to feel great frustration and rage whenever I saw a car left idling (sometimes even empty!) So I did the math on that too**. And as it turns out, even a full hour of your dumbass neighbor unnecessarily idling his car is only as bad as dumping one beer out onto the driveway. Sure, it’s a  big dumb waste, but it’s not worth digging out the sledgehammer.

And back to CC’s situation: sure, you are subsidizing a lifestyle that is less efficient than your own. But $500 per month is still only $6000 per year, or 12 grand if you continue it for two more years. 

I’m guessing that $12,000 over two years is not a catastrophic sum to you, and even if we stretch this example out for a decade, $60,000 sounds like a lot of money, but it’s probably only the amount that each your own house and your retirement stock portfolio will increase in value in a single year in the current market conditions.

So the worst case scenario is still not all that bad. Which means it’s not a huge emergency, which means that while the whole family does need to talk things out and come to an agreement, it can all be done from a position of strength and the emotions really don’t need to run all that high.

So, good luck Captain, and please let us know how it all turns out!

In the comments: do you have any similar situations in your own family? How have you been dealing with them? Do you have any advice for the Concerned Captain or would you do things differently?

*Open window vs beer calculation: Leaving a window open in winter will roughly double your home’s energy loss for that period it is left open. Since heating a house in a cold climate costs about $4 per day, the open window is actually only wasting about 17 cents per hour of heat! You could leave that sucker open for six hours and you still have only wasted the same amount of money as choosing to drink one of the beers in your fridge.

**Idling car vs beer calculation: If left idling, a mid-sized gasoline car burns about 0.3 gallons of fuel per hour, which is about $1.20 at today’s prices. Electric cars do much better still, keeping you warm (or cool) and entertained for only about 10-20 cents per hour, mostly for the climate control.

** Update: many people asked, “but it’s not just money, what about the environmental effect of idling cars?” – the answer is that a gallon is a gallon, whether you burn it standing still or driving on the interstate. At highway speed, a car burns about 2.5 GPH – 8 times more than idling. In other words, choosing to drive less is FAR more important than choosing not to idle.

Although idling a car engine near a school is an especially dick move, because you are concentrating the toxic fumes right in the lungs of the children. And it’s enough to measure directly with any cheap air quality metering device. So don’t do it.

  • G January 28, 2022, 7:43 am

    Super post! But it made me laugh because about a year ago, my mom gave me and my husband (in our 30s, relatively intelligent, hopefully kind, with small child, low-to-ok income) 50K and was suuuuuuuuuuuuuuuuuuuuuuuuper disappointed when we put all of it towards our mortgage. Hahaha! She would have much rather we put it towards a bohemian studio in Paris or something. We’re paying off our house this month (champs for all!!) and it’s in no small way thanks to MMM. I love my mom, she’s the best, and money among family members is ALWAYS RIFE WITH THE BIZARRE so yeah I’d say give them the money and kiss it goodbye, but in a nice, well-adjusted, no-expectations kind of way. And I’d also say that enabling your adult children is always OK as long as it’s not a way to keep them dependent on you. Taking an enabling relationship in a new direction can be really scary, but I’ve seen people get much closer to their adult children once they stopped buying things for them and then getting upset at the lack of certain results that they were then expecting. When there’s no money between you, it can make room for other things. Good luck!!

    Reply
    • Mr. Money Mustache January 28, 2022, 11:23 am

      Nice work G, congratulations!

      Also, “Always Rife With The Bizarre” is an excellent phrase, so congrats on that too. Would make a good album title, if we could just think of the band name to go with it?

      Reply
      • theMayor January 29, 2022, 2:11 pm

        The debut album of “Family Money!”

        Reply
        • G January 30, 2022, 4:16 am

          Hahaha yes

          Reply
      • G January 30, 2022, 4:13 am

        Thank you for the double congrats! And thank you again for the advice over the years! My mom and I actually once upon a time came up with our band name, Total Betty, so that’s the easy part. Now I just need to learn how to play the bagpipes.

        Reply
  • frank January 28, 2022, 9:35 am

    Its an interesting debate – and also from another perspective accepting support from family members. A few years ago when I was planning to buy my first house my parents very kindly gave me a gift to put towards the deposit. I could have brought without the gift but it certainly helped me get a nicer house (which has one more extra bedroom, so an extra lodger to help pay down the mortgage) and with a slighly bigger deposit it meant I had a slighltly lower morgage and therefore a lower montly mortgage payment (and so more money for index funds etc). But I often wonder if I should have declined there gift as a little part of me thinks Ive only made it to where I am now because of them. Although they would argue better I invest it now than wait for a slightly bigger inheritance. On a separate note two MMM articles in a month! What a treat :-)

    Reply
  • Beckett7 January 28, 2022, 10:40 am

    All very interesting, My sibling who earns about 35,000 a year more than I do with a teenager in the house that will be going off to college soon. (talking probably med school) Has 2 mortgages on her house, a 401k loan, car payment that is probably in the red because she trades every 2 to 3 years and still ows her own student loan to the sum of about $21,000 which she deffered this year because she could depsite still being gainfully employed. Never cooks always eats out or brings in takeout and manicures and pedicures are a regular thing. We are both in our 50’s and she is the younger and sees nothing wrong with this lifestyle. As theere are plenty of other financial things that she has as well and I could go on and on. I am in charge of our parents estate when the time comes and I can already see that on the horizon there is going to be issues despite that everything is supposed to be split 50/50. As it is she owes our parents money now.

    Reply
  • George January 28, 2022, 11:43 am

    My wife and I have real good engineering jobs, but the daycare and housing costs are unaffordable. Our parents helped us with the down payment for two houses. The first one is a rental now. Without their financial help, I’ll be living in a small house cramped with 3 kids and WFH without enjoying the appreciation of the larger house. I’ve seen in India where most kids make double their parents income in my family. But in the US, things are not so. In addition, wife and I both have PhDs, impossible to earn much before hitting 28. Plus we wanted 3 kids. We have to live a rather inexpensive life style because of our choices plus stagnant economy while maxing out 401ks.

    Reply
  • Edith E Esquivel January 28, 2022, 12:03 pm

    As the mother of a young child, I totally understand takeout food, restaurants, and childcare costs. Some children are just harder in the first years, and more expensive. My Velcro baby wouldn’t let me do anything at first. We pay for speech therapy out of pocket but language stimulation has to go on all day long, so I don’t have time to really cook or clean… We just play pretend. We also spend a lot on educational toys and books. Parenting is hard and expensive at first. So I am not sure how much of this spending is unjustified and how much is just a lack of understanding from people who have not experienced raising a child with certain expensive needs. We will know if the son replies. In my case, we have the means to pay for all of it, but we would have to go into debt of we didn’t

    Reply
  • John January 28, 2022, 12:13 pm

    Yeah you really have to think over cosigning a house. Story time!

    My wife’s family had a real bad situation. Her step brother was trying to move to be closer to local family. He and his wife didn’t have much money or very good credit so in order to buy a place, they asked if her dad and stepmom would co-sign the loan, and loan some money to the proceedings. Wife’s dad reluctantly agreed, only to find out six months later step brother and his wife were separating to get a divorce. Step brother eventually found a new partner /spouse that already owned a house and after the divorce eventually his ex-wife refinanced and got my wife’s parents off the mortgage.

    Fast forward and wife’s Dad wanted the loan money to be repaid. So he had a family meeting with Step bro & new wife. Dad apologized to new wife to saddle her with the responsibility paying back the loan, but didn’t feel bad about it because step bro should have been open with her about debts owed. This caused step bro to ask wife’s Dad “why do you hate me” and the family dynamic hasn’t been the same since.

    So yeah. Don’t cosign. Give the money up front if you’re going to give it. Or help with child care. Something. You don’t want to be a lender/debt collector to family, especially like Wife’s Dad who always would comment on any non-essential thing Step bro and new wife did with “why haven’t they started paying me back yet.” They both ended up just mad at each other all the time.

    Reply
  • TuMo January 28, 2022, 12:42 pm

    A friend shared just last weekend that her 77-year-old boss keeps working just to support her adult children. Sometimes a parent’s generosity becomes a way of life for the adult children. It’s sad to watch love misused that way.

    Reply
  • Little Pumpkins January 28, 2022, 1:06 pm

    On the broader lens of if, when and how to gift money to your adult children… my partner and I have been very grateful for the annual (non expected) gift of $15k from her parents to us, which we use for therapy, health classes, and career classes that have boosted our earning potentials. We were not MMM focused when we met in our mid-20s, and it wasn’t until our mid-30s that we felt pretty steady in our investing %. This is to say, if it were me (and our friends who are figuring out how much to gift their kids throughout life), I’d give what I would feel comfortable giving freely without expectation, and would not co-sign on something I’m not willing to be liable for. On a much smaller scale, after lending our car to a friend who got into a very bad accident, we ended up paying 50% to our friend because it is our car. We did this to preserve the friendship we cherish, and because we know we are financially much more ahead than this friend. However, it showed me in a smaller scale, don’t sign up for anything you’re not ready to sign up for. So nowadays, we’ll rent a car for a friend (offer them the financial amount if they’re coming to visit us from out-of-state) or pay for rideshares, but no more borrowing our car :)

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    • Edith January 31, 2022, 11:39 am

      I agree that giving to your children is not bad. It is just bad to give to your children when there are still very important financial lessons to be learned. I heard of a man who would be very splendid with one of his sons but not the other. When the other son complained, he told him: “I will give you money when you no longer need it, because if I give it to you when you need it, you will always depend on my money and won’t be able to stand on your own two feet.”

      Reply
      • Little Pumpkins February 3, 2022, 3:30 am

        Thank you for this Edith – “I will give you money when you no longer need it, because if I give it to you when you need it, you will always depend on my money and won’t be able to stand on your own two feet.” We’ve been struggling with whether to support my brother-in-law with paying off his 6-figure student loans and/or helping him max out his 401k every year. He is a big part of our estate plan should we die first (his student loans and Coast FI will be taken care of), but otherwise – your insight is helping to solidify that we aren’t ready to give until / unless we experience some more maturity from him and initiative. He’s a wonderfully kind person who spends in a way that my judgment is too loud for, should we give him money now.

        Reply
        • Edith E Esquivel February 3, 2022, 1:58 pm

          Great. Just to give you a bit more info, the responsible son is a doctor. The other one didn’t want to study or work. Since his father wouldn’t finance him, he had to start a small retail seed business by selling some of his stuff. His father bought some of it because he saw his intention. Five years later he owned the biggest seed company in the state. And then his father started being really generous with both his sons.

          Reply
  • Purneau January 29, 2022, 6:11 am

    Thank you very much for writing newsletters/posts like this again, MMM :) I appreciate them a lot.

    Reply
  • Andy January 29, 2022, 6:43 am

    My biggest problem is with the slight bit of dishonesty involved.
    You were led to believe that they were in financial straits because of the skyrocketing house prices but they made no mention of their other plans and habits.
    Some blunt advice: bring up kids so that you get rid of them.

    Reply
    • AuntTre January 29, 2022, 12:21 pm

      “bring up kids so that you get rid of them” – succinctly put! Love it, lol.

      Reply
  • zerwecke January 29, 2022, 11:19 am

    Relatively new to the site but as a parent of six I have found that my guiding thought is…is what I am about to do helping or hurting my child. Are the on a good track where helping will be beneficial or are they on a bad track where my intentions to help are actually hurting them? It may take some careful thought to differentiate the two. Best wishes CC.

    Reply
  • AuntTre January 29, 2022, 12:16 pm

    The letter states: “What we didn’t know was” , “they have probably been spending even more than they make” and “they really do not want unsolicited advice – particularly from their parents”.

    Leaving out “the story” and the drama, the letter boils down to: “I co-signed and obligated myself to indefinitely subsidize a mortgage for two grown adults who were dishonest about their financial situation prior to the inking of the loan. They have a track record of fiscal irresponsibility and no desire to change their habits. What should I do?”

    Had the situation been stated so simply – what would anyone here have to say?

    The Captain’s kids seem to be stuck in convenient adulthood: hard-working but fiscally irresponsible teenagers that want financial help (the childhood convenience) but no interference or advice, (the adult privilege). Being parents themselves now, their convenient adulthood needs to end.

    Everyone has a story (tale of woe). Details differ, but it is one theme: “my life is hard and it’s not my fault.” Lesson one of adulting: life is hard. Lesson two of adulting: things may not be your “fault” – but they are still your responsibility. Sucks, huh?

    It’s difficult for any parent to watch their child struggle, but challenges make people grow up & develop effective life skills. Everyone must learn to deal with the outcome of their own decisions. Better sooner than later; better now than not at all. Being allowed to fall on their faces would probably be the best thing that ever happened to them – although they won’t think so at the time.

    So, here’s the real question: will the Captain resolve to be an appropriate parent of a grown adult, and untangle himself from their finances completely? Or will the Captain continue to be inappropriately enmeshed, essentially trading cash for affection, until the day he dies?

    One path leads to emotional and financial freedom for all – the other is emotional and financial bondage, with no end in sight. It’s all about healthy boundaries – and these folks don’t seem to have them.

    The kids need to take the reins of their own lives; seek out the advice of a fee-paid financial planner, get some crucial education on financial matters, learn about money management, etc. Buckle it down or lose it all: that’s the adult reality.

    The Captain & wife need to step back and sort their own issues – why they equate money with love, and confuse enabling with caring. There are limitless ways to show love and support for people other than giving them money.

    Reply
    • Krampus January 31, 2022, 8:08 pm

      So very well-written (and not just because I agree with it). I nominate you to guest-write here some more.

      Reply
  • Mary January 29, 2022, 12:29 pm

    Hmmm… I live in North County San Diego Inland and yesterday (January 28) it was 72 degrees outside so the amount of time I left my windows open was actually inversely proportional to how cold it was in my house… This also probably explains why the home prices here are outrageous (even in North County Inland) and every so often a news article comes out about how MANY parents have been lamenting that their adult children have to move away (taking their families with them) because they just can’t afford to live in the area they grew up.

    Reply
  • Bakari Kafele January 29, 2022, 1:04 pm

    I would say absolutely no, it is never ok to subsidize adult children.
    The only exception is if they are severely physically or mentally handicapped.

    Imagine if we treated professional sports the way we do family money – every athlete gets to start the game with however many points their own father scored when they played a corresponding match. The better your dad was at the game, the more points you start with. Would anyone find that reasonable, or have any interest in watching?
    The only difference is, sports are just games for grown-ups, while things like property ownership and college degrees have a major long-term impact on people’s lives.

    We talk about “inheritance” like its about billionaires leaving trusts so their kids never have to work, but its the ordinary middle-class intergenerational wealth transfers that primarily perpetuate wealth inequality in America.
    The reason houses cost so much and college is so expensive is because young people no longer are competing with each other, they are competing with each other’s parents, who have had a lifetime to earn.
    The reason our racial gaps can’t close, no matter how much attention is paid to “racism” started way back with the end of slavery, and intergenerational wealth transfers keep the status quo in family lines, forever.

    The only way America lives up to it’s promise of equal opportunity, or meritocracy, of fairness and the ability for anyone to get with hard-work and innovation, is if everyone starts at the same place and has to earn their way.
    The ability to own a house, get an education, shouldn’t depend on the luck of birth.
    If we take parent money out of the equation, and no one can afford down payments or college anymore, the result is market forces bring prices down to where they are affordable again. Supply and demand.

    If everyone has to pay their own way, everyone starts on the same level, we can confidently ascribe all of their own successes and failures to their own actions.

    Reply
    • Mr. Money Mustache January 31, 2022, 9:52 am

      Wow, really thoughtful perspective Bakari (and nice to hear from you again!)

      I hadn’t really thought about this “competing with other people’s parents for housing” situation, but it is definitely a valid one. Also, I have always been against big inheritances (except to help an adult child who is challenged in some way, and I don’t just mean “has an addiction to Mercedes SUVs :-)”

      For my part, I am not doing ANY “estate planning” – I would far prefer that my boy makes his own wealth (and enjoys the process just as much as I have), and that my own nest egg goes entirely to people who need it far more through stuff like effective altruism charity and maybe founding businesses that try to make a difference.

      Waaay back in 2013, I wrote this article on why I think that keeping things lean for your own kids can actually be an ADVANTAGE rather than a setback: https://www.mrmoneymustache.com/2013/03/28/the-incomparable-advantage-of-having-to-work-for-what-you-get/

      Reply
    • Barnacle Bill February 7, 2022, 12:16 am

      These are good points (and recall an interesting opinion piece from a few years ago: https://www.nytimes.com/2017/06/10/opinion/sunday/stop-pretending-youre-not-rich.html)
      I have a hard time with the idea of leaving my kids none of my (presumed) wealth when I die; I hope to strike some balance between helping those who didn’t have the race/class advantages I’ve enjoyed and helping my children. And I would have a *very* hard time cosigning a mortgage in the Captain’s case unless, as others have pointed out, I’m willing to simply pay the entire amount (and presumably able to do the same for as many children as he has). The leopard don’t change its spots.

      Reply
  • Steve Follows January 29, 2022, 2:23 pm

    My logic has always been that I’m happy to help anyone who is willing to help themselves. The line I give my son who is 21 and daughter who is 18, is that I will help you save and invest but not spend. Hence if they put money in their investment account then I give them a contribution to it that is equal to the tax they have paid on that earned money (25%). This way they are learning that this is a good deal and thus helps them to form good habits of putting money away as soon as they are paid as they both wish to buy property of their own in the future. I have helped my son by buying him a decent used car so he didn’t go into debt for one, but he is paying me back weekly as he knows me well enough that if he let me down then he wouldn’t get any help in the future, and I will do the same for my daughter at some point.
    Hopefully I set a good example to them as I’m just about to retire at age 54 having got divorced from their mother 12 years ago so they will see first hand what the benefits are to being intentional with money.
    Sorry to say that the young couple in the post don’t yet recognize the value of money and the consequences of the life choices they seem to be making, and if I were their parents then I would want to see them making some sacrifices and contributions to get where they want to be before helping them to move to a more expensive place.
    Working full time and having kids is never easy, but it’s not supposed to be! The parents need to show what is called Tough Love, their son/daughter may resent it initially, but in time they will be thankful and in a better place for it IMO.

    Reply
  • Patrick January 30, 2022, 12:41 pm

    Here’s a similar scenario with deep challenges: helping retirement-age parents who don’t have a cent in retirement accounts. My parents had a lot of financial issues over the years. By their 50’s they’d gone from needing to shop only sales at Ross, to finally just enough money to save but not enjoy a coffee out. They had low-wage jobs their entire lives with no 401(k) options. They always focused on their community, volunteering most of their free time to their church unpaid. Great people, incredible hard workers. The folks that are the backbone to many companies. However, they are now retirement age and… social security can barely cover just food and power for the year. This is the emotional feeling: they might be on the streets if it weren’t for us helping out. April 2020 their jobs ended because of the pandemic and my brother and I dug into their finances to see where they were at. It was bad: $40k in debt, not counting their mortgage. Not knowing if the housing market would collapse (it didn’t, ha), we chose to liquidate their home for its $50k equity, cleared out their debt, put money back in their savings, and got them into an apartment as a stop gap until we could figure out what comes next. We realized they had become retirement age, and zero habits or jobs from their past pointed to them being capable of retiring on their own. Now that job options are back for them we’re at a cross-roads: pay for roughly $1,000 a month for the rest of their lives so they can finally rest. Or tell them to get back out there and work until they can’t work any more. My mom’s hands are destroyed from lifting heavy boxes in grocery stores. My dad has deeply shaken confidence from ageism in the workplace. So here’s the question, with three of us siblings making over $600k in collective income, do we step in to solve this problem for the rest of our parents’ lives, and slow down some of our own financial goals (i.e. FIRE)? Or is there some creative solution that I have missed?

    Reply
    • Mr. Money Mustache January 31, 2022, 10:01 am

      I would definitely help them out, but would love to hear other people chime in on this. Although I was surprised to hear about social security not being nearly enough to pay the bills for two people – can you share what the total monthly income from that would be in this situation? )(I was under the impression that it would be $2k or more per month)

      As for ideas for helping – one way could be as simple as buying a nice duplex (mortgage under your own name) so they can live rent-free in one half and help keep an eye on the other half for you, which you rent out. The rent from the one side could well pay for the mortgage for the whole thing in the right market / interest rate situation.

      Anyway, please feel free to email me through the contact form of this site as well if you think we should flip the script on this case study and do another one on the “should we support our aging parents” issue!

      Reply
      • Edith January 31, 2022, 11:33 am

        Supporting aging parents would be a great topic!

        Reply
      • SJ February 2, 2022, 12:48 pm

        I would second this as being a useful blog topic. I’m in a similar situation with my mother. She has equity in her home w/ no mortgage, and a small pension. We’re looking at using the proceeds from the sale of her house to build a small cabin on our property, that she would live in rent free (but the title would be in our name). Probably one of the trickier issues here is how to navigate expectations around estate planning if one child is helping out, but also receiving some delayed benefit (a nice cabin, in this case). Fairness is key, but easier said than done. I suspect this will be an even more relevant topic given how bad things got in old-age homes with COVID, how long people are living, and the stratospheric housing costs.

        Reply
    • Little Pumpkins February 3, 2022, 3:38 am

      Yes, you can afford to give $1,000 / month, if you’d like.

      My mom receives a little over $1,200 / month in California before taxes from SS, and a pension ($800 per month-ish) and is okay to splurge here and there because her house is paid off, and she drives a 20 year old sedan. My brother and I are always buying little things (she won’t take money directly from us), and we’re in a similar $600k together bracket. For now, we’re investing in our FIRE numbers while also understanding that we may need to redirect some funds for her end of life care. She was a first generation immigrant, she did her best – we’d like to give her a dying with dignity.

      It sounds like your parents are loved by their community, have worked hard their whole lives, and have children who are financially thriving. Do you think you will regret at your death bed, *not* giving the relief of time on their terms or is your work really awful? As someone who burnt out from my career in tech (way before FIRE), my spouse and I know the trade offs with what we’re giving now versus 1-5 years less of work… We value generational wealth, and in this case, honoring our parents and in-laws as best we can with sharing some resources.

      Reply
  • Paul January 30, 2022, 8:08 pm

    Yikes. I can’t criticize, as I’ve done the same as the grandparents. But I likely wouldn’t do so again.

    In my case I loaned a large sum of money to my former GF to help her to reduce the burden of her mortgage (with no particular terms re the debt or repayment).

    The unspoken expectation on my part was that she would seize this opportunity to double down on her repayments, and to shake off the burden of debt as fast as possible.
    The reality was somewhat different.
    She saw it as a chance to spend up large, justifying many thangs as ‘improvements’ to the home, and to the homes value.
    Ultimately she didn’t reduce her debts at all, and continued to end each week with no better equity than the week before, and always having to keep an eye on her credit card balance.
    Long story short, she’s repaid my money, I’m out tens of thousands in interest if I’d kept the money to myself, and she no longer has a house, and is throwing away money on rent instead.

    Some people cannot be helped. Some people see lifelong debt as normal, and fail to recognise they are effectively working for the bank that is assisting with their financially loose lifestyle.

    As for the original case study… I’d suggest the kids need to learn from their own mistakes. Assisting their lifestyle is failing to teach them the value of frugality. If they continue they risk being like my ex. Working hard to make zero headway.
    As for their kids – they’re risking becoming strangers to them, as the caregiver spends more time with them than they do.

    Reply
  • Don January 31, 2022, 5:29 am

    They aren’t living within their means. It’s as simple as that. They can (and should) live whatever lifestyle they want, as long as it doesn’t need to be subsidized. They don’t NEED to live in a high cost area, they don’t NEED to eat out a lot, they don’t NEED a fancy renovated home, they both don’t NEED to work full time EVERY year. These are all choices. And there’s many other choices they are likely making similar to that every year (phone plan, the cars they drive, etc). It seems they want to bake their cake and eat it too.

    Reply
  • Annamarie Pluhar January 31, 2022, 9:43 am

    My great-grandfather had money. He gave it away prodigiously (none left in this generation). From my grandmother I heard he said, “Never lend money you can’t afford to give.” Learned that lesson as a 16 year old.

    I am very fond of a the app/website You Need a Budget for principles tightly related to MMM. Those kids need to learn to use it. It makes seeing one’s spending very clear and it’s so easy to use!

    I don’t think these grandparents/children would do well living together – but I do think that multi-generational families are worth so, so much for everyone! We’re supposed to live together. We’re wired for it! Tribes are our natural habitat.

    Reply
  • Edith January 31, 2022, 11:27 am

    I’ve thought about it and I think I’d support my son and daughter-in-law with access to counseling or mental health professionals. Society is not very good at portraying parenthood realistically, and society is not very good at supporting new parents either. So a lot of new parents have trouble adapting to this new life made harder in the present than in the past (virus/city design/modern demands/capitalism) and also letting go of the life they once had and the freedoms they will very slowly regain in the years to come (and likely, when you are fifty or sixty, because parenthood is usually delayed nowadays). Society tells you that if you are not ecstatic and grateful for not being able to sleep, eat or poo without interruptions, you are a weirdo and don’t love your children. So there is basically no one to talk to frankly about the fact that your children’s smile is not enough to make you feel this is all worth it. This psychological troubles can translate into avoidance (working 12 hour shifts just when you are needed at home the most) or into compulsive behaviours (such as shopping). If the son used to be responsible and he isn’t anymore, he probably needs mental care.

    Reply
  • Naomi January 31, 2022, 2:41 pm

    I haven’t read all the comments, but it sounds like this isn’t a done deal. If you’re not comfortable with them using their equity for renovations instead of a down payment, now would be the time to address that directly. You can make your offer conditional on them paying off their other debts, using the remaining sum for a down payment, and waiting to do it renovations later, if you want to. Or, if you’re willing to finance them at $500/month indefinitely, that’s fine, too. Just be clear and direct and if there are natural consequences of their lifestyle, let them suffer those natural consequences.

    Reply
  • Leah January 31, 2022, 6:28 pm

    My husband and I just got burned very badly on co-signing on a car loan for his 27 yo daughter. She had bad credit and had recently totaled her previous car but my husband really wanted to help her and she had a good job managing a wine bar. She lost her job when COVID hit and we ended up making about half the payments. She had several accidents, her insurance was canceled for non-payment, and now she is awaiting sentencing for two DUI’s and is addicted to opiates and asking us to pay for an in patient rehab. We had to pay $9000 to get the car repaired so we could sell it as well as pay off the loan and we will probably lose about $8 – $10K when it’s all over.

    When you love someone I think you desperately want to believe the best of them, but if the bank will not loan them money, there are good reasons and you shouldn’t help them get a loan they can’t qualify for. I also feel an imperative to be fair to his other daughter, who is very financially responsible, and not let her sister spend up her inheritance.

    The other realization we have had after a lot of soul searching is that you are shaping the course of someone else’s life when you step in to “help” them. We should not be shaping the course of other adults’ lives – that is their own job. Giving financial help doesn’t result in them learning to make different decisions, it is like how lottery winners usually end up exactly how they started s few years down the road.

    Reply
    • Edith E Esquivel February 3, 2022, 1:51 pm

      I was helped by my mom when I was starting out. I always demonstrated being responsible, so this help was aimed at compensating for some external things I had against me. I turned that help into gold in terms of wellbeing and retirement savings, and now that my mom is older and needs my time, I have the freedom to give it to her. Help is only bad when you give it to those who don’t know how to handle it. You could give to the other daughter from now and tell the first one you don’t have more to give since you have to be fair and give to her sister. Wait and see what the responsible one can do with the help she doesn’t really need.

      Reply
  • Gary Grewal February 1, 2022, 11:34 am

    I like the idea of “gifting your future self” and preparing for adulthood by putting in the 12 hour days and work in your 20s say, however that’s a tough balance. You don’t get yours 20s back. In my mind it’s the perfect blend of old enough to truly be independent, adventurous, and absorb life, while being young enough to get away with not a care in the world.

    That being said relationships do matter substantially, and make sure you and your partner are on the same page for how to navigate support of family members; never help someone financially without consent!

    Reply
  • Ashley February 1, 2022, 3:11 pm

    I’m disappointed that people have attributed so little value to childcare centers. Socializing, educating, and caring for children is hard work! I am constantly impressed with the creative activities that our childcare center provides for our young toddler. I am grateful that he gets to interact with his peers and other adults each day. That exposure has accelerated his learning all while providing my partner and I an opportunity to pursue our careers. Each afternoon we look forward to picking up our little tyke and spending time together as a family! Daycare drop off and pickup times have created much needed boundaries in our home (no more late night work sessions!).

    Stay at home parents are a marvel and their work is sorely under-valued. But, I’d really like to reiterate that how and when each family pursues childcare should be determined on a case-by-case basis that incorporates the family’s values, finances, and preferences.

    Let’s remember it takes a village and the more people that love our children the better! There are as many effective ways to parent as there are decent human beings in the world. And as I new parent, I am keenly aware that the judgement around parenting is anything but helpful.

    Reply
  • James February 1, 2022, 7:59 pm

    CC,

    Love the attitude and desire to support your kids.
    The example in question is too myopically focused on a single transaction. I generally think in alternatives.
    1) No one is entitled to own a home. People should buy what they can afford. Otherwise, rent. If son and wife are able to save they can buy again when they are ready.
    2) The scenario doesn’t talk anything about early life sending habits for your son. This ship has mostly sailed unless he decides he wants to seek calmer waters.
    3) custodial 529 sounds like a better long term strategy for the son and grandkids based on limited info.
    4) if you must, give it as a gift. Co-signing sounds like chivalry, but is just enablement.

    Fair winds and following seas,

    JW

    Reply
  • calvin February 3, 2022, 1:00 pm

    First, sounds like parents raised kids and seems did not too shabby on both ends (neither side is burden on each other or society). Great job, don’t let any of the below take away from that. Bravo and much respect.

    One perspective I didn’t see touched here is reverse face punch/what things cost adjustment.

    (tad harsher than reality, but perhaps necessary to emphasize)

    Listen up you old retired punks (lol not really but couldn’t resist): You aren’t “fortunate” to “have our grown kids (and grandkids) living nearby”. Your kids are literally working themselves to limits and THAT is what is subsidizing your access to kids/grandkids. By your own admission, the eldest and his wife are balancing TWO careers (that extend into 12 hour days), have two little ones, and did the relatively frugal thing of starting out in smaller living space (condo).

    Your kids ARE putting in the majority/full effort. You are on the sidelines asking “how come not 125% -> 200%??”. Everything will get bent with that mentality – push families like that and it tends to end in failure or worse (neglect, self-harm, etc).

    Additional face punch: $6k/year is borderline joke in that HCoL region/”skyrocketing housing market”. Median house price of 700-800k, going up a very modest (i.e. not skyrocketing) 2% is 14k/year (35k->40k if “steady” 5%). With that in mind, 6k/yr is less of a gift and more akin to a courtesy (e.g. “hey let me chip in $5 bucks for this $40 fill up”).

    Additional face punch: Your nose is so high up in judgement that you projecting historically improbable ideals. Them “planning to spend [previous equity windfall] on renovations to the new house” means they are buying NOT NEW, are potentially signing up for hellish experience of attempting a live-in remodel (w/ kids + careers)… all to say they are contemplating “sweat equity” angle. They aren’t doing this because its hip, they probably have very limited other choices! There are also the stereotype of a young family considering time honored tradition of taking on an outsized but historically reasonably accepted risk at this stage in life. And while you’re begrudging them for it, you buttheads may be a big reason for it (they could likely avoid this risk living in LCOL area)!!

    Alternate timeline: Kids moved to radically different area (now or before), somewhere lower cost of living, likely inland and far away. The weather would almost certainly be harsher, the family visits likely drop to once a year (if that). Theres a decent chance they would be living within means, granting you the moral feel good, but at what cost to extended familial unit. At initial face value that might seem manageable, but as the years go by you are inevitably edged out of their lives (outside the occasional visit, card).

    Reverse face punches out of the way (some of which are may not belong/land on this set of parents), I don’t believe difficult HCOL areas justify some of the potentially frivolous level of spend going on. However, those are two distinct and separate topics: Helping kid’s family get stronger foothold/roots into the local area and corralling some harmful spend behavior are completely unrelated (one is classical ‘add step stool to get higher on financial ladder’, other is psychological/behavioral web to address – usually less about money).

    To wit:
    If you are inclined, and able, to “help”, recognize the ballpark of what constitutes “help” in your environment (lump sum 100k-400k or 25k+/yr seems more relevant for the region). 25% -> 50% of a big ticket items starts to really enter the territory of “help” imho.

    For more modest amounts/means, doing those with a “courtesy” mindset seems most graceful. If person got ball game tickets (say ~$80/pair), getting the $20 parking tab seems like a graceful acknowledgement of gift that is being bestowed (without making it a tit for tat/”robbing” gifter joy of giving). For a house scenario could be something like “hey you guys are buying within 15-30 minutes of us, thats alot more expensive than it was 20 years ago – let us toss 10-20k to help defray that cost cause its a real convenience for us being able to do hangouts/outings and avoid long traffic/flights”

    The reality I’ve seen is that alot of (particularly older) people attempt to use gifts (often relatively modest or straight up unwanted trash) as attempt to control/manipulate/claim successes (of) others. The tail end of the case study letter seemed to be veering toward that (basically: how can we leverage our contributions to steer them to see/do life like we do) – the tendency to seek out that “extra” value is somewhat innate (I think) but as adults we should probably recognize it as one of those opportunistic ideas that likely comes from an uncouth/unbecoming/overstepping place that is net negative and probably should be intentionally avoided. Adult humans make for poor bonsai trees – when the efforts fail to steer behavior, seems people devolve into over the top/villainous tactics in attempt to force their will through.

    Reply
  • Diane Page February 4, 2022, 12:55 am

    A real think piece. Money makes people do funny things, and distribution issues around family money can cause craziness.

    If you give money, as others have said, give it without strings. I think it’s important not to use money as a control medium or behavior blackmail for family members. Absent serious medical or other external issues, gifts should be as equal as possible between siblings.

    It seems from MMM’s response that the new house has already been purchased? If the house has already been purchased, I agree to the idea of ending the subsidy over time, perhaps tapering off instead of dropping from $200 to $0. Consider having the kids, in addition to agreeing to refinance when qualified — they may never qualify on their own — agree to transfer the property to you with a quitclaim deed if they miss any mortgage payments, for some consideration such as xx% of the cash value of the property. Put this in writing.

    If the home hasn’t been purchased yet, do not co-sign. Consider, if you must, buying the property yourselves and renting it, or renting with an option to buy, to the kids or being the kids’ mortgage lender. That way you control the equity. This is still a lot of involvement in their lives, and you need to figure out what measures you will take if they start missing payments. 

    An alternative, if the home hasn’t been purchased yet, is to let them deal with their housing situation and just send whatever amount per month to “help with childcare,” until the kids are out of elementary school or some other specified period. But am I right to guess that no way can they qualify for a mortgage loan on their own? In that case, can you swing gifting a 3.5% FHA down payment? 

    I help my adult children a lot, but I realized I have rationales and an unwritten set of rules. First, they have a good track record. Both of them went off to college and never moved back in — not even for the summers. We covered undergrad tuition, but they got jobs and made rent.

    Second, I think it’s much harder to make it on your own now — it’s no longer the post-war boom when a single earner (caveat, a white male single earner) could aspire to support a family, buy a house, take that family on vacation every year (yes, one of those endless car & motel “are we there yet?” trips I fondly recall from my childhood), and maybe retire with a company pension.

    I’ve always helped with healthcare, and not distinguishing between mental and physical healthcare. I realize some parents are way less fortunate and have to agonize over repeated trips to rehab. I cover car insurance for the younger one and helped the elder buy a used car. They are both still on my mobile phone family account, more out of inertia than anything else. They are authorized users of one of my credit cards, for travel for family command appearances for holidays, funerals and other life events. 

    At one point, a generous family elder decided to part with some of their estate before they were dead, so they could see the wonderful uses we all put it to. I  paid off the remaining balances of the kids’ student loans and the retirement account loan I used to make the house handicapped-accessible during my spouse’s final illness. 

    With the debts gone, it still took me a long time to realize that I now have healthy retirement and investment accounts., an excellent government pension, real estate and long term care insurance, and I don’t have to maintain the habit of worrying about money. There had been some scary times with a losing business, including a partner who skimmed, college costs, and the costs of illness.

    I bought a rental house and rented it to one kid, legit at market rate. I gradually fixed that house up, and they were to inherit it in my will. I made an investment account TOD for the other kid to balance things out.

    I then decided to emulate our elder. I transferred the rental house to my kid (no gasps about the transferred vs stepped up inherited basis, please — I had redone all the mechanicals but the house appraised low due to its beat up finishes, including a kitchen with no ceiling and only part of a wall). I transferred the investment account to the other kid.

    I gave generous cash gifts this year. One kid, who is doing good in the nonprofit world, has to renovate that kitchen. The other kid, who recently bought a home with their spouse, is transitioning from selling fancy decorative items to rich people to a healing and counseling practice. So they could both use some bucks.

    I told them not to expect such largess on the regular. And I’ve asked both of them to think about and advise me on donating the RMDs from my retirement accounts, when the time comes. 

    Reply
  • Miles February 6, 2022, 11:35 am

    I think this also touches on a parenting lesson for those of us who have non-adult kids and want to set them up with frugal life skills. It’s important for them to know not just how to prepare their own meals but also how to be comfortable in a kitchen.

    In practical terms, this means, for example, helping prepare sides for lunch or dinner as part of their weekly chores.

    Reply
  • Ro February 9, 2022, 12:18 pm

    I relate with the case but the other way around. Two years ago my parents in law told us they haven’t paid their loan for 10 months and they were going to lose the house. We had money to help them but we proposed this deal: we paid the debt but we planned together their finantial status; agreed in the maximum amount they could afford to spend by month and the plan to pay us back; with a monthly review meeting. I know that they accepted because it was the only solution they had left; and my parents in law were not happy with me at the begining, but 2 years later they have been able to pay me back all the money, save money for the first time in their lives and are more happy and balanced financially. If you really want to help them give them tools and knowledge; it will improve their live in the long term and in the long term they will appreciate your help more; they will feel more proud of themselve that if you just give them money or solve the problem. If they don’t accept advise then they shouldn’t accept your help/support it will only bring frustration to both sides. I’m a mother of 3 and I think I will help any of them if I can afford but always with the commitment that they will not make the same mistake (or try to at least)

    Reply
  • Fabbio Areche February 10, 2022, 7:31 am

    Thanks for sharing, I can imagine how hard it is to have such differences of opinions when it comes to money with family. I too have found myself keeping money talks to a minimum since I am definitely the odd ball out when it comes to the typical spender lifestyle. This was also a great reminder to chill out, since I too find myself optimizing, sometimes at the cost of a lot of tension!

    I actually have a situation where the opposite is happening. My fiance subsidizes her mother’s expenses and that tends to cause some issues with our savings plan. I know it’s hard for me to tell her not to help her mom out, it just seems like she enables her to continue her spending habits. I guess I can take a lesson her and see if there is some way to put a cap on how much she helps out so that it won’t be an indefinite amount of time.

    Reply
  • fireby35 February 12, 2022, 8:56 am

    1. Economic outpatient care for wasteful spenders is simply going to backfire. Parents should not give anymore.

    2. Learning to chill. 100% correct.

    Reply
  • Superdave February 14, 2022, 10:35 am

    The book called, “The Millionaire Next Door” talked about this very topic years ago when it came out. They found that something like 1 out of 4 or 5 adults gets economic help from their parents throughout their lives. It was called Economic Outpatient Care (EOC) as I recall. One thing I’ve learned is that you can give a million dollars to someone who is addicted to spending and within 5 years they will be just as broke as they were before. No amount of money will fix the problem, and it may even make things worse as they are approved for ever larger loans. It’s no different than providing drugs to an addict who is screaming for relief from withdrawals. You are just feeding a problem that’s never going to go away until they get desperate enough to seek a solution.

    Reply
  • Barkdog February 14, 2022, 1:52 pm

    Give them $500/month as a grocery stipend, CSA subscription, or childcare credit. This forces them to re-balance their spending habits and priorities *if they really want the new house*.

    Reply
  • Billy Rogers February 22, 2022, 1:15 pm

    What incentive do they have to refi the house after the parental payments stop in two years? Wouldn’t a better plan be to say I’ll keep the monthly payment going for two years if you refi within a year from now and if you don’t then the payments will stop in a year?

    Reply
  • Craig March 7, 2022, 6:05 pm

    1) Don’t co-sign – Either buy the house (yourself or jointly) or give them money for a down payment as part of their “inheritance”.
    -if they can buy on their own then let them know that you would always help in a true emergency if you so choose
    2) Develop a plan to coach them. If they are intelligent and kind then they will listen to a narrative that is relatable and in their terms. Perhaps they learn through numbers, or learn through parables. There is some way to craft a story that reaches them in a respectful and constructive way.
    3) Make (and communicate) a formal plan for your wealth transfer to all of your kids (and/or grandkids). This is probably the most important thing you can do for your own decision making process. As you are retired look out 20+ years and make sure you’ve got your needs covered and understand what wealth transfers you’re willing to undertake during your lifetime:
    -childcare
    -529’s for grandkids
    -weddings
    -housing (down payment/other)
    Then map out who gets what, when and if there are any requirements they must fulfill to receive their those assets. Also, plan and track how transfers undertaken during your life effect transfers on your death. Perhaps you have subsidized your other children in different ways, based on their unique needs and are also trying to equitably balance that. It is also important to keep in mind that different points in life bring about different decisions and the approach of your children will change over time. Most people adapt later in life and you should not think that they will remain static in their habits.
    Nudging is quite easy to do and I’m sure you can identify creative approaches and outcomes that will be beneficial to their growth. For example,” We’ll match every dollar you save up to $X”. This approach requires a behavior change with an incentive versus a guaranteed payment. This is much more effective than “if you stop eating out so much we’ll give you $500 a month.” Delaying gratification is also a very good lesson. For example, “get your credit score to XXX and we’ll give you a lump sum down payment.” They will have a clear motivation to “save” themselves out of their current situation and adapt their behaviors accordingly. If they don’t achieve it they have only themselves to blame.

    Please keep in mind you are in 100% control. There is certainly value to you in keeping your family nearby and I understand the joy that can be had by “giving” and helping people you care about. Money is a tool that can be deployed effectively or recklessly and you are right to have concern that you may be tipping to the reckless end of the spectrum.

    Reply
    • Froogal Stoodent March 18, 2022, 3:23 am

      This is very good advice! I hope Concerned Captain sees this reply

      Reply
  • Froogal Stoodent March 18, 2022, 3:20 am

    Chapters 5 and 6 of The Millionaire Next Door would be good for Concerned Captain to read; they deal with this exact topic and are *very* insightful.

    In fact, while I was reading The Millionaire Next Door, I wasn’t sure I’d learn anything. They spent an entire chapter on the car-buying habits of millionaires and non-millionaires, and by that point I was thinking “boy, they’re just overcomplicating the stuff I already knew!”

    But then I got to Chapter 5, “Economic Outpatient Care,” and Chapter 6, “Affirmative Action, Family Style.” In those chapters, I learned LOTS of things I didn’t already know!

    It seems that Concerned Captain is a Millionaire-Next-Door type, and the adult children are not. This, of course, tends to bring conflict, and is not easily solved. The case studies from The Millionaire Next Door may be helpful in this situation.

    Reply
  • Kate March 27, 2022, 2:42 pm

    Can you do a case study on frugal adult children watching their spendypants parents have nothing saved for retirement? What does the next 40 years look like for that family?

    Reply
  • Nomadic Samuel May 2, 2022, 6:50 pm

    I feel as though this is forgotten way too often: “family relationships are much more important than a few dollars here and there.”

    I’ve seen this happen on both sides of my family and these grudges have lasted now for decades. Over such petty things as well in the grand scheme of things.

    Reply

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