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

Refilled Nests: Do we help or hinder our kids if they move home again.

Okay. So Gen Z kids are living under the parental roof again and in greater numbers and percentages than our generation did at their age.  I wrote about that in my previous post. The reasons are mostly economic--housing costs are high; they're saving money for their future. The good news from a Pew Research survey is that two out of three of our kids who live at home say they look to us for financial and career advice.

That's heartening of course. They're still willing to come to us for our pearls of worldly wisdom. Does that mean they're acting on our advice or that living at home is helping them develop solid financial habits and become independent--as in living in their own pad.

That's a question michelle singletary tackled in her column on adult kids who live at home. (Her three 20-somethings were living at home at the time she wrote her column.) She wanted to know where, as a parent, the help versus hinder, the supporter versus enabler line was and what to do if you're on the coddler side of that line.

Here's some of what she shared from her own experience:

Set up a situation where you’re helping, not enabling, your young adults.

Set goals. Make sure they have a specific, measurable, achievable, relevant and time-based plan (SMART goals). Are they living at home to pay off student debt? If so, they should have a reasonable plan in place that moves them to financial independence.

Set rules. For instance, in our home, everyone has a night to cook. If you are going to be out, you still have to provide dinner. It’s a home, not a hotel, so everyone has to do their fair share.

Make a deal. We carry some expenses to allow them to save. For example, my husband and I aren’t charging our children rent because they are saving most of their pay and/or investing it. That was the deal. We won’t charge rent as long as they are saving as promised. If we see wild spending sprees — rent will be charged.

Ask questions. We get to ask money questions within reason. We check to make sure they are meeting the goals they set in exchange for free rent. Trust, but verify.

Respect their boundaries. We are constantly checking in to make sure they are on track. When the kids think we are overstepping, they say so. And we back off.

Situations deteriorate. When is it time for the enabler to cut the cord.

 You are being overprotective when your adult child is eating out all the time and planning a trip to Mexico for spring break, but can’t find the money to pay for her own car insurance. Or he is not paying down his student loans at a reasonable pace because he’s overspending on entertainment or eating out.

Bad financial habits develop if your adult child is using all his pay for all play. The financial umbilical cord has to be cut if leaving it in place ends with an overindulged adult treating you like his or her personal ATM.

The bottom line for rolling out the welcome-home mat

It is important for young adults to learn to be good money managers, but it does not have to come at the expense of them spending their 20s setting up a household they can barely afford, even with roommates.

painting: Pierre Bonnard

Sharing the Wealth: What do we owe our adult kids?

Do we have to share our wealth--be it a dollop from our savings, income or investments--with struggling grown kids? If we don't have to, should we anyway?

Many of us have answered the latter question with a "yes." That is, we want to if we can afford it. (Never mind the Boomer, Gen X or Millenial nomenclature: We are the Wealth Transfer generation.) Some of us have said yes even if we can't quite afford it.  But a woman writing to Slate's Kirstin Wong can afford it. A widow, she writes that her husband left her financially comfortable. She owns two homes, takes one or two cruise vacations a year and cares for two beloved French bulldogs that, in her words, cost more to maintain than a small child, which her only child has as well as a wife, a small apartment in a dicey neighborhood and health-related debts.

The grandmother/mother is in a quandry: Should she help them out if they have not welcomed her into their lives? Should she just write them off.

Before we rush to judgment, let's get more of the details she shared in her letter. 

--She and her son have been "extremely distant ever since he graduated college," she writes, "and especially since he got married. He didn’t even have a wedding to invite me to, and I’ve never met my 7-year-old granddaughter in person." 

--The granddaughter needed surgery shortly after birth and the parents have been paying that off as well as college debt. They would like to send their daughter to a more challenging school in a safer neighborhood but can't afford to do so.

--When she asked him recently why there was such a coolness between them, "I was shocked when he told me he and his wife have always felt that I don’t care about them because I’ve never helped them financially."

--Her daughter-in-law comes from a poor immigrant family, "yet they have a very close relationship with her parents, who watch my granddaughter every day after school. Apparently, if you can’t afford to give them anything, they won’t expect it!"

--She is thinking of leaving her worldly goods to her church instead of to her "greedy and materialistic" son.

The French bulldog reference pushed some hostile buttons for me, but Slate's Wong wisely moved away from the judgmental. Her advice revolved instead around the symbolic meaning of money and the importance of communication. Here are some relevant excerpts:

Money issues are rarely just about dollars and cents. Money holds symbolic value for all of us, and to your son and his wife, financial support could be tied to emotional support, care, or even love. It’s easy to characterize them as greedy and resentful, but consider another explanation: Maybe, given all their struggles and your relative ease, he feels unimportant and neglected.

Money is a resource, and it seems to be one that’s readily available to you, so I can see why your son is interpreting your lack of financial help as a lack of care. He and his wife might not expect the same from her family because they support them in other ways, using other resources, like time and child care—both of which are immensely valuable.

Talk to your son without holding judgment or making assumptions. Figure out what care means to him and what he needs from you to feel it. Chances are, it’s about not just money.

painting: "Bacchus and Ariadne" by Frank Auerbach

Money Matters: Great expectations on gifts for new grandkids

A friend, C, called this morning. Distraught. Needing to vent. She was upset about expectations for a gift for a second grandchild who is due in a few months.  On a visit to her son and family over the weekend, C and her co-grandparent (D) had made an offer to their son and his wife: They would buy the basic room furnishings--crib and dresser--for the new baby, as they had for the first grandchild.

The son was appreciative, and the next day sent C a link to bed and dresser for their 4-year-old son--on the theory that the new baby would inherit the crib and dresser from their brother.

So far, so good--until my friend C opened the link. The bed and dresser were roughly five times what she and the grandpop thought they would spend as a gift--certainly, it was much more than the crib set they had sent as a gift four years earlier. True, there's been inflation and a bed and dresser for a young boy are more expensive than a crib and dresser for a baby. But my friend was outraged, in part at her son's expectations but also at the high-priced furniture he and his wife had chosen.

C is from the Midwest, born into a working-class family where money was tight and the idea of a gift for an adult child was a non-starter.  She admits her background colors the way she sees things. That said, she was stunned not only at the high price of the furniture but its cost in light of the upcoming expenses her son and his family faced for a new baby.

C told me that she and the grandpop had agreed that they couldn't afford the furniture the son and his wife had chosen and that they would instead offer a cash gift to be used for furniture or other expenses. This seemed like a reasonable and fair compromise. But then she went further: She wants to sit her son down and tell him his expenses are too high and that he has to trim down his choices for such items as a new bed and dresser for the older grandchild.

Does that cross a line? In today's world of parenting grown children, unless we the parents are asked to contribute in a major way, our adult child's family budget is none of our business. Not only that. Spending habits and pressures have changed since our generation and that may be why what seems a value issue ("They bought too expensive a house!") is more likely a financial fact of life. (Housing is more expensive today.)

The share of money going toward essentials like food, housing and medical care has dramatically changed in the past few decades. For instance, when some of us were our parents' young adult children, we didn't have to spend as much on health care, housing or education as young families do today. But we had to fork out more for food, clothing and transportation. This is according to a Washington Post analysis of Consumer Expenditure Survey data. And then, of course, there are costs we never faced: charges for Internet access, wi-fi, cell phones and all the accouterments of the modern digital age.

After C vented, she backed off the idea of intruding into her son's financial affairs. After all, it wasn't as though he and his wife were behind in mortgage payments, not paying utility bills or failing to provide food for the family. There were no red flags that would invite an intervention. It's just hard sometimes to sit back and watch our kids spend their money in ways we would not. But budgeting is an exercise in setting priorities. They have theirs and they may not be ours.

Painting: Vincent Van Gogh, The Blue Room

 

 

Money Matters: Who's picking up the check?

Many of us have been here: We've fallen into the habit of picking up the bill when we take our grown child out for dinner. If we're not struggling to pay our own bills, we feel good about indulging a child who's just starting to make their way in the world.

Even as our kids establish themselves--pair up with a significant other, start a family, earn a stable living--we continue the pick-up-the-check routine. Old habits die hard. But we also reach a point where it would be nice if they pulled out their credit card (or phone with its digital wallet) and paid for dinner or just a share of it.

For some of us, the gesture occasionally happens. For others, getting stuck with the bill is frustrating. We may worry that our son or daughter has succumbed to a sense of entitlement. We may feel frustrated about the expectations of our seemingly oblivious child. How to break the cycle and keep resentment of our darling child from creeping in? Philip Galanos' Social Qs. has the almost perfect answer. It's short, it's sweet and it's just a line to tag onto an invite to meet up for a dinner out. Any variation of it will do:

“Bring your wallet. Dad and I think we should take turns paying the bill.”

As Galanos notes, many adult children need a nudge into grown-up arrangements with their parents. I pass this along as a non-threatening and perfectly pleasant nudge.

painting: Pierre Bonnard, The Conversation

Money Matters: Our helping hand is bigger and broader than ever before

It's a trend that's grounded in fiscal reality. Our kids--twenty-somethings and 30s--are living with us, nearly 25 percent of them, according to several surveys. The surveys also find that they've moved into their childhood bedrooms for monetary reasons.

Although many of them are on the first rung of career jobs or are earning decent money in the gig economy, they see how much it costs to live in the world.  They may be carrying sizeable student debt, buying cars on credit or face a rental market that's unfriendly.  The national median for a one-bedroom apartment is currently around $1,500 a month, according to Zumper, but rents are significantly higher in cities like New York ($4,300), Boston ($2,990), San Francisco ($2,970) and  Miami ($2,600), cities where young adults are drawn to live.

For many of our adult kids, living at home isn't a sign of social failure. It's a way to save for a future goal--whether it's to buy a place of their own, start a business or have a decent nest egg before plunging into marriage. Sometimes the move home is transitory. A friend of mine's 34-year-old son relocated from a city in the Midwest to his hometown where rents are high. He's living home while he searches for an affordable place. My friend would like him to speed up the search--she's finding the adjustment to his presence tricky--but he doesn't seem to be in a hurry. For him, the price is right and the refrigerator full.

Whatever their reasons for living with us, we're party to a parallel trend: 65 percent of us (the parents) are providing some form of financial support to our adult children between the ages of 22 and 40. According to a USA Today survey, housing topped the list (either paying their rent or letting them live free at home), after that came help with the cell phone bill, then car payments and more personal stuff like clothing, their takeout bill and entertainment (Netflix and the like). Dead last: health insurance or medical bills.

A good number of us--one in three--report that the support is a strain on our budgets. Nonetheless, we have not set limits. Nor have we let our kids--or ourselves-- know for how long we’re willing to put them up and help out.

painting: Cezanne

 

 

 

Leaving a Legacy: Keeping mum about our will and estate plan

I do not have the complication in my life of a second marriage and stepchildren. That means my adult children do not have to worry about whether step brothers or sisters will complicate the inheritance of the worldly goods their father and I leave behind.

I mention that because, experience-wise, I was unprepared for a complaint in a Philip Galanes Social Qs column from a reader whose stepchildren have stopped talking to their father (the reader's husband of two years but partner of 20). The husband's children asked for and were granted access to the terms of their father's will. They didn't like what they saw--their stepmother (the author of the letter to Galanes) stood to inherit a chunk of the father's property and money--and that's when the silent treatment began.

Galanes answer is specific to the problem of the letter-writer and the tricky business over property. But most of his observations are general enough to hold wisdom for us all.

You probably don’t need me to tell you that your husband’s children behaved atrociously — both by counting their father’s money as if it were their own and by disrespecting your relationship of two decades. I am not shocked by this story, though. Inheritance often brings out the very worst in people.

The gist of the rest of his answer was a version of this basic truth: We love our children but what we do with our worldly goods is none of their business, until it is (and we're no longer here to hear the arguments). There's this caveat: If we are favoring one child over another (one, say, is more successful financially than the other), we would be wise to alert them to our reasoning, an issue that I discuss here  and here.

credit: painting by Pierre Bonnard

Doomed: Our adult children's concerns about our drag on their future

Our adult children are worried about us. Not necessarily about our health and well-being. It's more a generation vs generation thing and the fear that the aging population (that's us) might doom their economic future. That is, we'll drain the purses that support  Medicare and Social Security and leave them working without a future safety net and in a disrupted economy. Here's why: Those of us who are currently working pay into a fund that pays benefits to those who are retired. Since we're living longer than our parents and their parents did, we're using up those funds faster than they can be replaced. The math is not in Gen Z's favor.

To sum it up with brief factoids:

The share of Americans age 65 or older is expected to grow faster over the next 30 years than the share of Americans between the ages of 25 and 54, the so-called “prime working age.”

The labor force participation rate is expected to dip over the coming decades.

With more people in need of care and fewer people working, economists see a potentially crushing burden on the U.S. economy and welfare system.

All is not doom and gloom. There are economists out there who see an alternative reality. A 538 story  reports on three scenarios that tackle the labor part of the problem and one that takes a less gloomy look at the financial side.

Encore Careers: Jim Johnson, a professor at UNC's business school, sees us--America’s 70 million or so baby boomers --as an asset that could help build “the longevity economy,” which is what the economy will have to look like to accommodate an aging population. Here's how he puts it:

“Everything has to change in both the built environment and the social environment to accommodate an aging population. ... Given the labor market challenges that we're facing today, post-COVID, ‘encore careers’ [beginning a new vocation later in life] are something that we're going to have to pursue in a major way.”

Immigration Boost. Higher rates of immigration help countries experiencing population aging because immigrants tend to be younger and therefore more able to work than the domestic population. Many economic forecasters assume that by 2030, population growth from immigration will supersede that from natural increases (births minus deaths).

Recruiting Workers. Only two OECD countries spent less than the U.S. on programs to encourage labor market participation — like job training programs and employment subsidies — as a share of their GDP. Economists suggest that we (theU.S.) invest more in such programs to get more people working.

We Have Assets: We may not be the drain on the social security purse that everyone fears. As retirees, many of us have saved for our so-called Golden Years. What sets us apart from our European counterparts is the share of income we older residents draw from assets, rather than government transfers, in our old age. That means we may not be the burden Gen Z fears we will be.

painting: Heidi Malott

Bank on It: Why aren't our adult kids moving out and on?

I remember it well: The thrill of graduating from college, getting my first "career" job and, highlight of highlights, moving out of my parent's house in the suburbs and into a one-bedroom apartment in The City with my best friend as a roommate.

A generation later, our kids graduated from college and did things a little differently. They had the thrill of independence by moving around the country, taking non-career jobs and living in group homes with an assortment of roommates.  They eventually figured out what they wanted to do with their lives. But they never lived in our house again.

Another generation later, reports tell us, the kids aren't into the kick of independence.  A good number of them aren't moving into their own apartments or taking a share of a room in a group house in a city in another part of the country: They're living at home with their parents--even if they have "career" jobs that pay well. They're doing this while they calculate how much in savings it will take for them to achieve their personal and financial goals. Those goals may not include living independently right now.

It's a trend that's been noticed by the NYTimes. Here's the newspaper's observation/explanation for the phenomenon:

Young adults are often encouraged to leave the nest as a rite of passage to establish financial independence and build a life and career away from their parents. But for some members of Generation Z and younger millennials, factors like the high cost of living, student debt, family obligations or cultural traditions keep them living at home for longer than expected. The pandemic and its resulting economic downturn also forced many young adults to move back in with their parents.

A Pew Research Center survey this past summer gives the rising trend a numerical perspective. 

In July 2022, half of adults ages 18 to 29 were living with one or both of their parents. This was down from a recent peak of 52% in June 2020 but still significantly higher than the share who were living with their parents in 2010 (44% on average that year) or 2000 (38% on average).

Many of us are waiting for our adult kids to move on and out, but generation Z  seems to see the world as more perilous and less financially sound than we did. And they're not going anywhere for now. The thrill is gone.

painting: Edward Hopper

 

 

Money Matters: Should a financial gift come with strings attached?

We are a generation that wants to--especially if we have the wherewithal to--help our kids out financially. Whether it's a gift to assist with the downpayment on their first house or money to pay health insurance premiums, we're often very generous with our grown children.

Whatever the reasons behind the gift, there is always a question of whether they do with it what we intended. That is, if we hand over a chunk of cash to pay down their car loan, will we be angry if they use the cash to buy new clothes.

In a recent Social Qs column, Philip Galanes answered a reader who told Galanes she often sends her brother and sister-in-law, who were living in financially tight circumstances, a check "to make their lives easier." Her aim, she explained, was to make sure they had money for emergencies; that her largesse would, in effect, be put aside as a safety net. But when her brother called to thank her for a recent gift, he mentioned that he and his wife had used it to travel to Europe. Her question--and one that applies directly to those of us who are financially generous to our grown children--was, how could she make sure, without dictating how they use the money, that they use it responsibly--at least responsibly in her eyes.

Galanes's answer is a practical one for those of us who struggle with the same or a similar issue:

There is nothing wrong with calling your brother to say: “Please tell me to butt out if you like, but I worry about your financial security. If you ever have an emergency and can’t pay an essential bill, please let me know, and I will try to pitch in.” From a distance, this seems to be what you want to do: help protect them without becoming their bank or fairy godmother.

But to continue giving them money and then feeling resentful when they spend it differently from how you imagined, isn’t fair to any of you — particularly given your hazy sense of their financial condition and prudence.

In other words, we can tell our kids there's a string attached to a particular gift--paying off of a car loan, say--and hope they use it that way or we could pay off the loan directly. No point building up resentments over gifts: they're supposed to be joyful and helpful not a sourse of future ill will.

Blessed are those of us who are able to give the gift and trust our children to use it as they see best.

painting: Picasso

 

Money Matters: Raising cash to help your kids fix up their house

If I were to survey my friends and their friends, I'm pretty sure I would find that almost all of us who could afford it helped our grown kids buy their first home. As a generational trend, it's kind of what we did and do. For some of us, the help is a loan and we expect to be repaid. For others, whatever chunk of the downpayment we give them is a gift, no strings attached beyond an expectation of a few invites to dinner.

But what happens when we retire and feel less flush--especially today as the financial markets are eating away at our savings. Our kids may already own a house but may need substantial help to update or add on to it--for a growing family or even for a suite for us.

Should we tap our IRA to help them out? Or just say no? For one set of parents whose daughter needed a loan to renovate her house, the answer was yes, and with good reason. Once the renovation was complete, they planned to sell their house and move into their daughter's home. They couldn't sell their house to raise money since their daughter and her family were living with them while the renovation is underway.

So, how to finance the help for a daughter who's very much part of their future living arrangement?  The parents wrote to a Washington Post real estate columnist to ask whether they should tap their IRA for the $300,000 to lend their daughter or if there is a better way to borrow to finance the renovation, which is slated to take about a year. The parents plan to use the proceeds from the eventual sale of their home to boost their retirement account or pay off any loan they may incur.

Using IRA funds may be the simplest way to tap into money--interest-free cash! no closing costs! no bank fees! But it would be the worst of all possible options. Withdrawing such a large amount from an IRA would trigger a huge tax bill.

The columnist suggested other options. Here are the nuts and bolts of two options: A cash-out refinance of the parent's house would raise money but it would incur interest rates (ever-rising) and upfront fees. A home equity line of credit wouldn't raise quite as much money as a refinance could but would probably mean higher interest rates on the loan--though lower fees/closing costs. The interest rates might not be that much of a factor--if the renovation is finished on time and the parents can sell their house quickly to repay the loan.

Which is a long way of saying, our helping hand is a riskier business than ever.

(BTW: If you want to know more details on how the relative costs of the refinance versus home equity line of credit might work out, check this link to the Post story.)

art: Rauschenberg, Third Time