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

Money Matters: We're still supporting our kids into their 30s and 40s

If we can afford to do it, a number of us are the financial backers of our grown kids. We're not just helping our recent college graduates with rent or a cell phone bill. We're doing the same and more for our kids in their 30s and 40s--kids who are established on their career tracks but moving into the "expensive" part of their lives, the time when they marry, have children, buy homes. (The percent of kids getting help, according to a 2018 report, is more than half adult kids between the ages of 21 and 37.)

The reason, per this NYTimes story: Millennial incomes today are lower than they were for Gen Xers and boomers at the same point in their lives. Many of today's millennials graduated from college into the recession, and that put them behind in terms of salaries and savings. Add to that today's real estate market: In many of the big cities where our grown kids live, the cost of simple housing is out of  their affordability range--if not for our help with a down payment assist here or a co-sign there.

Beyond cash outlays, some of us provide services that add up. A recently retired friend of mine babysits her eight month old grandson three days a week. The other grannie sits the other two days so that the mom could go back to work full time. The value--apart from the irreplaceable loving care--is  upwards of $25,000 a year.

While our kids may need the help, researchers found they don't feel great about taking it. Accepting help from the bank of mom and dad when you're in your 30s or 40s is evidently "the last taboo of finance that people don’t want to admit." 

Shame or not, our largesse gives our kids an edge. While families with means have always helped their children, what’s different today, the Times reports, is that the economy has more extreme gyrations, which tends to flatten wages. That's when family wealth plays an outsize role in helping people get ahead. Those who don't get that parental financial boost are grappling with paying off student-loan debt, which effects their ability to save to buy a house--a key way to financial stability and the building of wealth.  (Nationally, homeownership rates are falling for millennials; only two in 10 have a mortgage or home loan.)

A Boston real estate agent who works primarily with first-home buyers told a Times reporter that in the 20 years she's been an agent she has rarely seen anyone in their 30s who did not have family help or an inheritance for their down payment. (In the Boston market, a 20 percent down payment is between $80,000 and $100,000.)  In even pricier New York City, a real estate agent estimates that  a quarter of his 30-something clients who are buying larger, family-size apartments receive money from their parents, whether it’s in the form of a gift, a low-interest loan or co-purchasing.

It's a good thing we're around for them, as, evidently, more and more of us are.

 

 

 

Supporting Grown Children: Golden Handcuffs Edition

It's a wonderful feeling to be able to be financially generous to our adult children--to support them if an unexpected need arises or to indulge them so that they can do or buy something they've always wanted. If we've got that bit of extra to spare, there's a deep pleasure in seeing our children enjoy it now rather than later--when we're no longer around.

And our kids are grateful. Why shouldn't they be? We've offered them support out of love for them and respect for their ability to handle the resource well. But sometimes, there's a little less of a heartfelt thank you. There can even be resentment, especially if there are strings attached. This letter that appeared in an advice column in a local Colorado newspaper spells out the dangers of attaching those strings--even if we do so indirectly:

When I met my wife five years ago, I had no idea of her financial status. I knew that her parents had a nice home and spent a lot of time traveling but she lived frugally and worked hard. When we got married, I learned about the extent of her family's substantial resources. Admittedly, they have been very generous — helping us with the down payment on our house, taking us on family vacations and starting college funds for our kids. The issue is that they've increasingly put pressure on us to raise the kids in specific ways, build our schedules and vacations around their needs and spend money according to their values. We, and my wife in particular, have been struggling to say no because of everything they continue to give us.

The letter was signed: Locked In Golden Handcuffs

The couples coach who answered the plea from "Locked" talked about the "aging" parents and their need to feel relevant. They also focused on what was triggering the son-in-law's negative response, such as feeling a loss of empowerment, freedom or authenticity or a sense of emasculation.

Whatever it is, it's not something I would want to visit on my son or daughter or their spouses. To give is to give freely. It's their lives to live. We are not in the driver's seat--even if we bought them the car.

 

 

Little Emperors: Complaints Chinese parents have about their grown children. It may sound familiar.

**

We've read a lot about our helicoptered kids. They're the one who, as young adults, have gotten used to their parents overseeing life's key decisions. Their parents have been spotted going on job interviews with them and even calling their bosses to complain when they believe their child has been treated unfairly in the work place.

We've also got our entitled young--and older--adults who think the world, to say nothing of their parents, should bend to their needs. These are the kids who expect--and are not particularly gracious about receiving--a parental allowance, even though some of them are grown up with children of their own. There are those who call this a "brat allowance."

Well, small world: Chinese parents have, according to a professor at China's Renmin University, "birthed a generation of freeloaders who feel entitled to leech off their own parents."

China's one-child policy is partly to blame, professor Zhang Ming writes. As he details his observations about these "Little Emperors,**" his commentary begins to sound familiar.

"Even after helping them find jobs and planning their whole lives out for them, a generation of so-called helicopter parents still feels compelled to help their kids buy a house. Lucky are those whose kids only ask for help with the deposit and don’t expect their parents to help them make their monthly mortgage payments, too."

In our country, recent surveys find that roughly one-third of Millennials hoping to buy a house will be relying on a loan/gift from a parent, grandparent or other relative to help with some or all of the downpayment.  There's been less follow-up on how many of us continue to help with the monthly mortgage payment.

Zhang Ming has more to report. When parents don't come up with the cash fast enough, the grumblings of Chinese adults

"are a fixture of social media feeds, where they whine about their parents having the temerity to suddenly go on a trip or moan about their in-laws playing mahjong instead of giving that money to their grandkids instead."

Evidently, it's woe unto the grandparents as well.

"Many grown children remain reliant on their parents for financial assistance even after they’ve had kids of their own, thereby perpetuating the cycle of freeloading into a third generation — except the grandkids don’t turn to their own parents for help. Instead, both generations sponge off their grandparents together."

 It wasn't always so. Zhang Ming says he asked many parents of these Little Emperors whether they had turned to their parents for help and support. Just like many of us tell our children or friends, those parents tell Zhang they never asked their parents for anything, not even "for a single yuan" and then, like many of us, they reel off the the challenges they overcame to get where they are today, including supporting their parents— not the other way around.

 Zhang Ming's conclusion about what he calls China's "kidult" problem:

China’s young people are paying the price of the country’s rapid urbanization drive. The high costs of migrating and living in cities have drawn multiple generations into the financial orbit of their youngest relatives, exacerbating a psychological disconnect between what is appropriate to demand from one’s elders and what is appropriate to give. The resulting emotional tug-of-war often does more harm than good.  But these reasons do not begin to explain the degree to which parents are expected to support their kids, however, or how kids came to feel so entitled to their parents’ money in the first place.

 **‘Little Emperors‘ is a name that refers to only children in China after the one-child policy was implemented. Attributed most frequently to increased spending power within the family unit and the parents’ desire for their child to experience the benefits they were denied, the syndrome results from the children’s sole command of the attention of their parents and grandparents.

 

Bank of Mom and Dad: What to do and how to do it when it's time to close the helping hand

 

Some of us tap into our retirement accounts or we delay retirement: We need the money to keep up with the relentless press of supporting our grown kids. Or grandkids. It may not be full support--just help with the rent, the cell phone bill or car payments. Sometimes it's a monthly stipend to defray their cost of living. For one of my friends, it was to pay for a major expense--the cost of a surrogate mother so a daughter could start a family. (The ensuing twins, priceless.) Another couple played venture capitalist and put money into their son's daring new business--which has since attracted real-life, Silicon Valley venture capitalists.

Whatever it is we're doing--and with whatever rationale we have for doing it--there comes a time when we want to or have to close the bank of mom and dad. The tipping point is different for every family; let us not judge our neighbor.

That said, when Closing Time comes, here are some tips from financial experts on how to tighten the fiduciary fist.

Set boundaries: One end of that boundary is to Just Say No. Make it clear that you will not provide assistance anymore. But if that isn't going to work for you--if it's too harsh or doesn't fit your situation--set financial boundaries, such as how long this will continue and how much cash will be involved. In some situations, you're doing yourself and your kin a favor. When support continues into a grown child's 30s and 40s, you may be an enabler: preventing your kids or grandkids from becoming independent and living within their means.

Make it legal: If you decide to be the mortgage banker for your grown child's home purchase, act like a bank. Have a lawyer draw up a contract  complete with dates when payments are due. Of course, you don't have to be the banker--for a mortgage or other large loan. You can walk your grown child into a bank--and even co-sign the loan (if you're sure you don't need to be paid back). That way, the bank is the debt collector, not you. Financial experts note that people are less likely to repay family members than they are a bank. Many of us do help out with the first-home down payment--not because are kids have been spendthrifts but because of student debt. Student loan debt seems to be the biggest obstacle standing in the way of young people buying their own home.

Use it to educate: However much money you decide you can afford to shower on your kin--a grown child or a grandchild--it should be a gift with no strings attached. Yes, they may squander it, but even grown children need to fall down and scrape their knees. Gifting them money that they may use unwisely is better than using your credit card to bail them out.

Get a second opinion: If you're lending money for a new or on-going business, don't limit yourself to your and your child's take on the business plan. Get an opinion from someone not directly involved in the business. And agree to specific terms--how much and when it will be paid back (if you hope to be paid back).

 

 

 

 

Observation: Cheryl Strayed and Steve Almond on supporting grown kids financially

 

Writing on The Sweet Spot, Cheryl Strayed and Steve Almond tackle a question from a reader about financial support for their grown children and if it's fair to withdraw that support while they are still dependent on the parents. 

Cheryl Strayed:

You’ve been deeply generous because you wanted to provide your children with an education, security, comfort and ease. Well done. Now you must be deeply generous in another, seemingly paradoxical way: by giving your grown children the gift of independence and self-sufficiency.

They don’t pay for their own way in the world for one reason and only one reason: because you do. I encourage you to stop doing it. Allow your adult children to find a way to do it instead. And allow them to struggle with doing it.

By providing all that you provide your kids at this point in their lives, you’re preventing them from learning how to problem solve, sacrifice, persevere, and suffer and benefit from the consequences of their own decisions. In other words, from becoming adults.

Steve Almond:

The reason it’s been challenging for you to stop paying for your kids is because it’s a reversal of the way you’ve operated since your kids were born. They needed something, and you paid for it. That made sense for a time. But it doesn’t make sense now, and it hasn’t for a while. Your children aren’t children anymore and they don’t truly need you to pay for their lives, even if they find it convenient that you do.

 

Part of being a good parent is modeling healthy boundaries for our children, and this is ultimately that. In establishing yourself as a person who knows and states her limits, you’re showing them how to do that too.

 

The Bank of Mom and Dad: Who pays your grown child's rent?

Surveys on parent-child financial relationships are often run by or at the behest of banks or other financial institutions. They've got a particular reason to understand what's happening financially to the generation that should be forming households and buying homes.

That's what makes this most recent study so interesting. It's by analysts at the New York Times (informed by a data set known as the P.S.I.D. Transition to Adulthood Supplement.) It found that almost half of the people in the data base in their early 20s reported that their parents help them pay their rent. Among those who get help, the average amount is about $3,000 a year.

For some, the dependence stems from difficulties in finding a stable career job. For many others, it's a Big Expensive City issue. Skilled work is increasingly concentrated in high-rent metropolitan areas, and salaries aren't in sync with rents. Help from the Bank of Mom and Dad is a means to staying on the job in order to move ahead.

 Some data bits from the study:

The average amount of parental help for the 20-somethings — roughly $250 a month — covers 29 percent of the median monthly housing costs in America’s metro areas.

Twenty-somethings who work in farming, construction, retail and personal services tend to get the least parental assist; those in the art and design fields, the most--an average of $3,600 a year. In part that's because of the high barriers into fields like art, education, health and law.

Young people in metro areas with a million or more people are 30 percent more likely to receive rent money from their parents--almost twice as much money-- than those in smaller cities.

In the 1980s, fewer than half of 20-somethings received any parental support; by 2010, nearly 70 percent did.

Living expenses account for only 20 percent of the help that parents give their children. According to the survey, the bulk of the support comes in the form of lump-sum gifts for things like a down payment on a house or capital to start a business.

Little did we know--and a point the survey makes--is that being able to reassure our kids that the Bank of Mom and Dad would be there for them influences the  decisions they make--from what to major in in college to the career they choose. It's also a reminder that economic advantages begin at home and continue as kids grow into independence.

 

Empty Nesters: Who loses more sleep over the kids now?

We worried about them when they were toddlers; we had anxious moments when they started school; our hearts were thumping when they were learning to drive. Most of us thought we would sleep a deeper, sounder sleep when our kids became adults.

Researchers have come up with some interesting findings in that regard. Dads may lose more sleep over the adult kids than moms.

The study, which ran online in January in the Gerontologist, looked at data from interviews with 186 married couples who had two to three adult children. The underlying premise was that sleep problems in older adults are associated not only with a variety of negative physical and mental health problems but with relationship issues with their grown children. To compile comparable measures, researchers asked parents how often they provided different types of support to their grown kids. The list included almost every interaction we might have with our children--from  talking about daily events to offering emotional support, practical help, advice and financial assistance. They also asked the parents to  assess their sleeping.

The findings conclude that relationships with adult children have different associations for sleep quality among middle-aged husbands and wives. Overall, though, when it comes to worrying over supports for grown children, dad's are the bigger nail biters than moms--as measured by quality of sleep.

Here's what the study says:

...husbands’ more frequent support provided to their adult child was associated with less sleep, which validates the findings that support may be an indicator of caregiving (suggesting burden) rather than an indicator of a parent/child connection for fathers. When husbands provide more frequent support to adult children, it is often more need based than mothers, that is, it is in relation to life problems experienced by the adult child.... Thus, support may be more taxing for fathers making it more difficult for husbands to get a sufficient amount of sleep as a result of the time and energy demands related to giving such support.

The researchers see their study as a way of fine tuning sleep therapy for parents of grown children. We may see it as confirmation of what we already know: The kids may be grown--they may have kids of their own--but being their parent never ends. We are, as the old saying goes, only as happy as our unhappiest kid. Even if that kid is forty.

 

 

 

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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.

 

 

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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."

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Money Matters: How much does it cost if your kids refill your empty nest?

There are lots of studies that give us the price tag on raising a child. The U.S. Department of Agriculture pegs it at $250,000 for the first 18 years. Now comes a British report that lets us know how much it costs us should our young adults (21-year-olds) return to the nest--or continue to live at home: Each year, British male children cost their parents an average of £2,195 (that's around $2,800 in our currency); women a mere £2,036 (or $2,600).

The study cross referenced those figures with data that suggested that in Britain many grown kids don't leave home until they're 30 years old. In which case, the price tag for providing all the feathers of the nest for an adult child comes to nearly £20,000 ($25,000) --or £19,489 for men, and £19,837 for women. 

Here's how the researchers got there. Their survey base was 1,000 parents with adult children over the age of 21 living at home with them. They took into account increases in weekly food bills, utility bills, broadband use and pay TV subscriptions as well as such incidentals as household insurance premiums. The kids weren't total freeloaders. They made some contributions to household expenses and that was factored in.

The point of the research was to study the impact of rising rents and housing prices on young Brits. So the study looked at the reasons children chose to remain living at home. The top answers:

 --34 percent were saving for a deposit to buy their first home.

--33 percent weren't earning enough money to move out.

--23 percent liked the quality of life at their parent's home.

--13 percent enjoyed their parents' company.

That said, there were downsides:

--35 percent said there were parent-child clashes over the housekeeping and help or lack of it.

--28 percent argued regularly over money.

--11 percent said the parent/child relationship turned sour.

One Brit financial adviser's solution: Lend the kids money to buy or rent their own place. It's cheaper in the long run.

 How relevant is the Brit experience to ours? There are certainly some parallels. And then there's the Brexit vote. I'm just saying.....

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