Parenting Grown Children: What Dr. Spock Forgot to Tell Us: helping hand

helping hand

August 10, 2017

Helping Hands: Being there for our grown kids

The kids may be grown up, have kids of their own, be launched in their careers and be living lives independent of us--just as we brought them up to do.

And then something happens--an emergency, a minor accident or temporary difficulty--and suddenly our parental services are in demand. Well, demand may be too strong a word. Let's say. there's an opportunity for us to be helpful without being intrusive or making them feel they've regressed into childhood.

A few years ago the "something" in our family was a frightening car accident: my daughter's child, my Grand was hit by a car and ambulanced to Children's Hospital with a concussion and broken pelvis. It was a high anxiety, frightening moment until we knew that she would be all right. Being an hour away by airplane, I flew up--ostensibly to help out, though there was little I could actually do. By the time my daughter and family got home from a two-day stay in the hospital, friends and neighbors had started a chain of casserole deliveries, offers to walk the dog and do anything else they could possibly do. Months later, when I had enough perspective to post about the event, I noted how useless I felt. My daughter wrote to assure me that it meant a lot to her that I was there.

I was reminded of this a few weeks ago when "something happened" again. It was not as life- or health-threatening-- as the first something but challenging nonetheless: My daughter hurt her back (Ashtanga yoga. grrrr!). She ended up with an extruded disc or two, a lot of pain and a numb left leg that occasionally collapsed. Ordinarily, this would not call for a mom to fly to a daughter's side--there is a helpful husband, many friends and neighbors, and doctors and physical therapists. But there was this hitch: She and her family were about to decamp for a summer in California, swapping their home in New England with a friend who has a home in the East Bay area near San Francisco. There was a limit to how long the cross country trip could be delayed--the California family would be en route shortly. My daughter and Grand were scheduled to fly to San Francisco and make their way to the house while my son-in-law with the dog in the back seat and a trunk full of luggage drove across the country.

A fine plan when my daughter knew not of back pain. Now she was temporarily incapacitated and hurting. Although the worst of the acute phase seemed to be receding, I suggested I could fly to San Francisco with my daughter and Grand, help them settle into the house and take care of some basics until my son-in-law got there.

Offer made. Offer accepted. Which is why I woke up on a Tuesday morning a few weeks ago with a view of the Bay Bridge to my left, the Golden Gate on my right and mountains shrouded in cloud straight ahead on the far side of the bay. Outside, nasturtiums grew wildly, spewing their yellow and orange pops of color up hills, along sidewalks and out of cracks in driveways.

I also saw that my daughter, injured though she was, was capable of managing on her own. She logged onto her laptop and ordered dinner delivered. If it had been necessary, she could have done the same with groceries. None of whatever it took to move in required my presence.

So what was I doing there? Was I on the wrong side of useful? Maybe, but, once again, being there is helpful in a less tangible, reassuring way. No matter how old our children are--no matter how grown up and independent they become--there still is room for parental presence and the reassurance of emotional support. I may not have had to take care of basics, but I got my reward anyway: Three days of quality time with my daughter and my Grand. Three generations of our family's women helping each other out.

Posted at 08:42 AM in grandchildren, helping hand, supporting adult children, visiting grown children | Permalink | Comments (4)

July 03, 2017

Leaving a Legacy: The case for giving them a share of your worldly goods now

The headline is provocative: "Why I Am Giving My Children Their Inheritance Now." The NYTimes story was told in the first person by a man who said of his financial standing, "I know what wealthy is. And I know my wife and I are not." Nonetheless Paul Brown, an occasional columnist for the NYTimes and the author of best-selling business books, clearly has a comfortable amount of disposable income and not many major expenses ahead of him--he has finished financing his children's college education.

That is why, he writes, he and his wife decided to begin to give each of their four children part of their inheritance now. Now, as in while their children are still setting themselves up in life as opposed to later when Brown and his wife are no longer around and the children are set up--living their lives with presumably there own reservoirs of disposable income.

Turns out the headline is a tad more provocative than what Brown is doing. Many of us give our grown children financial gifts in the here and now--or "loans" that we do not expect them to repay. Most of us do it on an ad hoc basis. Brown is more organized. He gives each of his children an annual check. He reports that the money is used by each of his kids in different--albeit responsible--ways: to buy a house, to fund a college account for a newborn, to start a business, to boost a savings account.

He seems to be saying what paterfamilias and I have long believed: If we are fortunate enough to have raised children who don't feel entitled --as Brown says his children do not--and who don't have wild or crazy spending habits, then why not share the wealth now when they need it. It's all well and good to believe they should be independent and stand on their own two feet. But how pleasurable it is to help them out.

Here are three reasons Brown gives for giving himself that pleasure:

They can use the money now

They are going to get the money anyway, in the form of an inheritance.

Who wants them waiting around for you to...... Brown spells it out this way: "Why, as a parent, would you want your children — even if it is on some tiny, tiny, tiny subconscious level — waiting around for you to die, so they can inherit money they could use now?"

Brown also notes that he and his wife have prepared the best they can for the future, saving money for retirement and carrying good health insurance. They are giving their children money that is expendable. It brings to mind a post I wrote about a question Carl Richards (the "Sketch Guy" financial adviser who also writes for the NYTimes) raises about money: How much is enough? When we can answer that query we may want to share the excess with those we love.

Posted at 12:15 PM in buying a house, gift giving, helping hand, leaving a legacy, money matters | Permalink | Comments (4)

June 09, 2017

Bank of Mom & Dad: We make irrational decisions about helping out our kids. But there's a reason for that.

Financial advisers tell us to squirrel away money for our retirement, and yet we spend it on our adult children--paying their cell phone bills, letting them live rent-free in our houses. Friends (especially those without children) are shocked (shocked!) when we give a grown child a lavish gift or pay one of their outstanding bills.

Yes, it may not make financial sense; it may run counter to a life-long parenting goal of our children becoming independent adults. Yet a recent outgrowth of economic thought understands why we do it: It has a whopping pay off. In short, it makes us feel good.

The slightly longer answer goes like this: When it comes to money, the getting and saving matter--how much longer we need to work; how much money we need to keep in an emergency account. But so do emotions. In the long run, they may overwhelm our rational judgment about long-term goals, but they also bring us happiness in the here and now. For some of us, there's a deep pleasure in paying off a chunk of our kids' college debt or car payments or offering a wad of cash for the down payment on a first house. (For that matter, putting aside money in an emergency account doesn't make all that much sense, but it does bring us comfort to know it's there.)

As parents we are more than a spreadsheet and by-the-book counselors.

In his financial blog Michael Kitces points to research and makes a point about money and happiness:

Yet contrary to the conventional wisdom that “money can’t buy happiness”, a recent new book entitled “Happy Money” by researchers Elizabeth Dunn and Michael Norton suggests that there may be far more opportunity than we realize to derive greater happiness by changing the ways we spend our money. How we spend – on ourselves, and others – really does impact the enjoyment and emotional well-being we derive.

In fact, the research of “Happy Money” suggests that sometimes, the best things we can do to improve our happiness may lie in not trying to maximize our wealth, but instead focusing on experiential purchases (rather than “stuff” that appreciates in value), spending money to buy time, and even spending money to support family and relatives instead of ourselves (which may not be cost-effective, but can be remarkably happiness-effective!).

For more on the the latter point Kitces raises, see my post : "Can we afford to share our wealth with our grown kids in the here and now? There's a way to measure that."

Posted at 11:19 AM in bank of mom and dad, buying a house, college debt, emerging adulthood, helping hand, money matters, supporting adult children, tough love | Permalink | Comments (2)

May 19, 2017

Bank of Mom and Dad: The helping hand and its role in sibling rivalry

When my mother died, she left all that was left in her estate to me. But that didn't lessen my resentment of how my brother had, when he was alive (he died before my widowed mother did), talked her into giving him access to her savings accounts and squandered two thirds of it.

Whether we need the worldly goods or not--I was fortunate in not--there is something primal about the resentment we feel for a sibling if our parents treated them more favorably than us.

I bring that up lo these many years later because Paterfamlias and I--and our friends--are now the older generation, the parents of the grown children and, human nature being what it is, many of us are probably tilting more toward one child than another, helping out a child who may be struggling financially and not offering equal rewards to one who is not. The common sense of our actions may be apparent to us but not necessarily to the child who's not getting his or her share.

At least that is a point raised in a recent British publication, The National. After ranting a bit about parents who favor the "weaker" of their children over the more successful one, the author sums up research that has a surprising kick to it:

"Research in the United States found that parents helping their young adult children financially was linked to what it called a "solid parent-child bond" that got stronger the more money is given. I found it surprising, and disturbing, that money was a bigger issue than emotional support and affection. Other research states that sibling relationships were not affected by preferential treatment, like affection, as long as they were given the same amount of money. Give one more money than the other and you’re condemning siblings to bad relationships with each other later

So it turns out that our adult children are sensitive to inequality just as they were when they were small children living under our roof.

The answer to the issue is not necessarily to change our ways or even the scales, but to let our kids know what we're thinking and get input from them. In the best of all possible worlds, their reaction will be like that of a friend of mine's son who told his parents he was fine with their helping out his sister and that they should feel comfortable leaving the bulk of their worldly goods to her. He and his wife both have MBAs and high-paying jobs.. They are more than able to support their two children and send one who needs an extra boost to private school The sister holds a low-paying job (she's a social worker) and her husband, who lost his job in the 2008 recession, has been unable to regain his footing. They are struggling to support their twin girls. It is a relief to the parents to know that they are providing financial help to their daughter without their son resenting it. (Not knowing when the need for that help will end? Relief-less.)

According to Megan Ford, a therapist and head of the Financial Therapy Association, the biggest reason parents offer adult children financial help is that they are struggling due to a job loss, divorce or the pursuit of a career path that’s meaningful, but not lucrative. Also high on the list: providing assistance to a child who is disabled or has special needs or is dealing with addiction or mental health issues.

The National's author has this advice for those who are not even-handed in handing out or leaving money to their grown kids:

"Talk about it with your family, explain what you want to do, why, and that you realise it affects everyone. You might be surprised with the different takes on what you’re proposing. And most importantly, talk about being fair. You want to be fair don’t you? Find out what that means to everyone, not just what it means to you."

Posted at 09:28 AM in bank of mom and dad, helping hand, money matters, sibling rivalry | Permalink | Comments (7)

April 28, 2017

Money Matters: The Bank of Mom and Pop is always open

When our kids were young adults, the Bank of Mom and Pop was often there to help out, to be a cushion for an unexpected expense, to defray education costs. Even when the grown kids started families, We the Bank was a generous lender--for child care costs or a downpayment on a house.

We were not alone. According to a 2,000-person survey by TD Ameritrade, on average grown kids ages 19 to 37 received more than $11,000 in financial support and unpaid labor (babysitting, household help) from their boomer parents, ages 50 to 70.

A managing director of TDAmeritrade tells us that the underlying driver of our children's financial needs are student debt, stagnant wages and rising childcare costs.

Then he adds a kicker: "Grandparents are the secret to making it work — eager to help with financial support, child care and running the household."

He made that comment because half of the grandparents surveyed said they've made sacrifices to help their children and grandchildren. All of which suggests that we may think adulthood has brought our children financial independence, but we need to rethink that. For many of us, the Bank of Mom and Pop is never closed.

If you're interested in exactly where the money (and free labor) goes, rent/mortgage tops the list in terms of dollars received, followed by car payments, groceries, utilities and cellphone bills. Almost 20 percent of the kids surveyed said their parents helped pay their phone bills to the tune of somewhere between $262 (the average of what kids said they received) and $547 (the average of what parents said they sent.)

Also on the grandparent help-list: toys and clothing for grandkids as well as grandkid schooling.

Is there a price to pay for being a 24/7 banker? You bet. A GOBankingRates' savings survey looked at the price parents and grandparents are paying for their helping hand. Boomers ages 55 to 64 owe a median of $3,000 in credit card debt and two-thirds of them have less than $1,000 in a savings account.

Posted at 02:59 PM in bank of mom and dad, buying a house, college debt, grandchildren, helping hand, money matters | Permalink | Comments (0)

November 28, 2016

Supporting Grown Children: There is such a thing as a "brat allowance." Benefactors beware.

"Parenting has changed to obsessive paternalism over time. Well-meaning parents are taking over the financial lives of young adults....The adult child needs to be weaned away. Lines need to be drawn."

This sad state of affairs and the heartfelt advice that accompanies it comes not from the mouth of a financial advisor or self-help columnist here in the U.S. I came across this paean to the fostering of the financial independence of adult children in The Economic Times of India.

Uma Shashikant was exhorting her readers to save for retirement and reminding them that the greatest hindrance to building a nest egg is a soft-spot for indulging adult children financially, particularly children who have jobs and are earning money. She goes on to describe three forms this indulgence takes: a subsistence allowance, a cushioning allowance and a brat allowance.

India is not so far removed from us that the three categories don't apply here. In the spirit of sharing ideas from other cultures, here are Uma's descriptions of the ways in which Indian parents rationalize their financial support of adult children and the ramifications of doing so.

Parenting has changed to obsessive paternalism over time. Wellmeaning parents are taking over the financial lives of young adults.

The subsistence allowance: We would call this the return to the empty nest. Parents provide a place to live, food to eat and a means of getting around. While Shashikant admits that this form of assistance can help a young, working adult build assets, she also notes that "these sheltered young adults will not know how to manage within their own incomes. ...Persistence of this subsidy can lead to a situation where young adults see even core expenses as burdens."

The cushioning allowance: Parents pay insurance premiums, fund their children's share of holiday and celebration expenses and chip in for or take on large expenses. "When the financial status of well-placed parents is better than that of the young adults, these expenses are either willing subsidies or a result of emotional blackmail," Shashikant writes. "Parents effectively bear the decisions made by young adults, dangerously separating action and consequence. Not an advisable practice."

The brat allowance. If subsistence and cushioning are bad ideas, the brat is worse. This is when parents pay off their child's debts (loans, credit card bills) and, in Shashikant's words, "also fund the adult children's demands for upgrading to better cars, gadgets and homes." If their adult child's income is not up to their lifestyle, the brat allowance provides cash to meet life style expenses. We don't need Shashikant to point out the flaws here, though she sums them up this way: "The brat allowance clearly encourages the young adult to live beyond their means, assuming that the parents' assets are theirs to access and use as they wish."

Reading this piece reminds me how universal are the issues of parents, money and adult children. For Shashikant (and for most of us) there's an unpleasantness about a defined allowance--certainly of a brat allowance and its sense of entitlement. Where to draw the line? Here's Shashikant's advice: "When help comes without asking, the sense of entitlement increases. Parents should wait for the children to seek, ask, request financial accommodation, before jumping in to bail them out."

My take-away: An occasional helping hand, yes. Open-ended allowance, never.

Posted at 10:21 AM in bank of mom and dad, college debt, emerging adulthood, empty nests, helicopter parents, helping hand, loans to adult children, money matters, supporting adult children, tough love | Permalink | Comments (2)

October 04, 2016

Money Matters: When do our adult kids grow up financially?

Some of us close the Bank of Mom and Dad when our kids graduate from college or when they finish their grad school degrees. Some of us do it even earlier--when the kids have a high school diploma in hand and leave home for college or a job. To each their own.

Regardless of whether the bank is open or not, at what age should we expect our kids to be financial grown ups? A new research survey in the United Kingdom asked parents that question. The answer was pretty surprising.

According to the Sainsbury's Bank survey, UK parents pegged financial independence--that is, the age at which the parents can stop having to help their kids out financially--at 29. That's well past the college grad age. The mums seemed to be a softer touch than the dads. Women expected to support their children until they are 30; men saw the cutoff as 27.

Many of the parents reported taking out loans to help out their kids, half the loans being for their child's education or to pay for the wedding. Other reasons for loans: medical expenses, cars and help with household expenses. The average value across all loans stood at the U.S. equivalence of $14,000.

Survey analysts pointed out a reality behind the expenses that would seem to hold true here: While it is becoming more common for adult children to pay for their own wedding, the cost has gotten so high that help is needed. Ditto with college and grad school costs.

Parents in the U.K. aren't just doling out cash. A quarter of adult children aged 20 to 34 are bunking in with their parents, up from 21 percent twenty years ago. Given that shift, it's not surprising the rate of home ownership by 25-29 year-olds dipped from 55 percent in 1996 to 30 percent in 2016; for 30-to-34 years-olds, the change is even more startling, given that this is an age at which married cojuples expand their family size. Home ownership, however, is down from 68 percent twenty years ago to 46 percent today.

Here's what the author of the bank's Family Finance Report had to say about the changing times in the U.K.:"Today's parents are the first to face the perfect storm of expensive university fees, sky-high property prices and near unaffordable rents in cities, none of which they had to deal with themselves at their children's age. Add in the increased difficulties that even graduates have to get a job and it's clear the situation is far tougher for today's twenty-somethings than it was when they were born."

These are, of course, first world country concerns--we should be happy to have them. But they also suggest that, though we as parents are stepping in to help, there's a lot of financial unease and discontent among our 20-somethings and their older siblings.

Posted at 01:14 PM in bank of mom and dad, college debt, helping hand, money matters, supporting adult children | Permalink | Comments (4)

September 13, 2016

Bank of Mom and Dad: Should the helping hand be a loan or a gift?

Some of us have taken a tough love stand: Once they're adults, our kids are on their own: The Bank of Mom and Dad is closed.

Others take a more nuanced approach: A helping hand is there, depending on what it's for.

For those of us in that camp, the question is: Should that help be in the form of a loan or a gift.

The loan would appear to be the less risky way to go. The money will hopefully be repaid and we haven't, as one financial adviser put it, " dampened their drive to become financially independent."

Call Paterfamilias and me "Mommy and Daddy Indulgence," but we see the risks of loans as higher than those of a gift.

The loan risks? They won't be able to pay it back and there will be bad blood between the banker (Mom and Dad) and the borrower (the adult progeny). A Carnegie Mellon survey published in the Journal of Economic Psychology, looked into the terms and consequences of loans between and among friends and family and found that "people’s tendency to confuse what is in their own interest with what is fair is a major source of disagreements between people.” Put another way, ill will develops between lender and borrower. Relationships suffer.

More specifically, the survey of some 900 participants found that overdue personal loans had wide-ranging negative consequences, such as loss of closeness and loss of trust. Lenders felt that the delinquent borrowers were going out of their way to avoid them.

Bottom line: If the idea of gifting the money runs counter to your instincts and beliefs, then march your child over to the bank and co-sign a loan. The bank is in the business of collecting on debt. If your child misses a payment or two, let the bank hound them. And if your child defaults on the loan? Well, you're out of pocket, just as you would be if you made a gift.

This scenario only works if you can afford to lose the money. If you can't, you probably shouldn't be making a direct loan, co-signing a bank loan or gifting the money.

There's a pithy proverb that fills this bill, courtesy of the Bard on Avon:

Posted at 02:13 PM in bank of mom and dad, helping hand, loans to adult children, money matters | Permalink | Comments (2)

February 19, 2016

Money Matters: Is there a new normal for supporting adult kids.

When is it time to close our wallets, tie up the purse strings and let our grown children make it on their own? A lot of us help out the first year or two after college--as our kids wrestle with career choices, entry level jobs and paying off college debt.

But it can go on longer than that: 40 percent of adult millennials in the U.S. currently get financial help from us, their parents, according to a Bank of America/USA Today survey. Across the pond, a survey finds that a large cohort of parents in Britain are supporting their grown children even as those children pass the 30-year-old mark. A quarter of the "grown children" in the survey said they did not feel financially stable by the age of 35 and still need the assurance of their parent's financial help.

It's not necessarily support via free rent at home. Nine out of ten of grown children in the British survey who were older than 35 said they live away from home. By comparison, a recent survey of young adults (18 to 30) in Europe found that half of them reported living with their parents.

What's behind the late launch into financial independence? Among the reasons that the Brits put out there: low wages, high rental costs, zero-hour contracts, university fees, rising living costs, an unwillingness to take on responsibility, a generational lack of ambition, or plain old inertia.

Despite the delays in setting off on their own, the British study had bright spots. Once they were launched, 70 percent of the 35+ year-olds said they felt indebted to their parents for their financial support over the years. And here's the really heartening stuff: 60 per cent said they sometimes picked up the tab at restaurants and outings. A quarter have paid for a holiday for their parents, helped their parents with rent or bought them clothes when money was tight.

Posted at 02:43 PM in bank of mom and dad, empty nests, helping hand, loans to adult children, money matters, supporting adult children | Permalink | Comments (0)

December 30, 2015

Money Matters: Postponing retirement to help out our kids

A friend worked two or three years past her preferred retirement date. The reason: To help out her grown daughter. The help? $100,000+ to pay for a surrogate-mother pregnancy. The twins that ensued: priceless.

Many of us toil on for similar--if less dramatic--reasons. Before we settle into the tensions of a fixed income, we want the extra bit of wherewithal to help our grown children with ordinary and extraordinary needs. Sometimes it's to help with the down payment on their first house or to pay for top-tier day care for a Grand.

If several of us are guilty of working well past retirement age to aid and abet our grown children, we are not alone. In Canada, half of parents surveyed reported that they will retire later or work longer and one-third said they would save less for their own retirement to support their adult children financially, according to a BMO Wealth Management Report

The report, titled aptly enough "The Family Bank" looked at the financial support Canadian parents are providing their young adult children (aged 18-34) and compared it with the kind of support the parents say they received from their parents when they were young adults.

What kind of support are we talking about?

--19% are providing regular ongoing expenses; only 7% received such support from their parents.

--23% give frequently when help is needed, such as payment of a monthly bill; 6% had received that kind of help when they were young.

--38% help out occasionally, such as in an emergency; 39% got that kind of assistance from their parents.

--20% give little or no help; 48% were totally on their own financially as young adults.

Here's a link to more data in the form of infographics from BMO (which is part of the Bank of Montreal)

The bank's takeaway from its report:

These days, many parents feel they are on track to being financially comfortable but worry that their children are not going to attain the same level of comfort just on their own resources.

Posted at 10:37 AM in bank of mom and dad, emerging adulthood, helping hand, money matters, supporting adult children | Permalink | Comments (2)

Parenting Grown Children: What Dr. Spock Forgot to Tell Us

The kids may be adults now, but the parenting isn't over. We still have our issues.