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

Supporting Grown Children: When to close down the helping handout

A lot of us have sound criteria for helping our kids out financially. We know when tough love should be levied and when a helping hand is appropriate. But those decisions can get muddied, especially for those of us who are grandparents.

The surveys suggest we're generous with our Grands, that way more than half of grandparents--around 60 percent, according to most surveys I've seen--say they provide some assistance to their children and grandchildren. Clothing, general support and education top the bill, in that order. In my own informal, anecdotal collection of what friends and friends of friends are doing, the top item is day care. A lot of us open our wallets to pay for or help out with child care on the theory that we want our children to choose the best, safest care for our Grands regardless of cost.

But how long can or should that go on and should there be strings attached to our largesse? Friends are struggling with that issue and its complications.

Judy and Hal's "complications" started when their daughter, a Spanish major, was in college. She spent her junior year abroad--in Chile--where she met and fell in love with a Chilean student. The romance prospered, as did her language skills. After she graduated from college, she moved to Chile and married her fellow-student who was studying engineering.

Two years ago they moved back to the U.S., to a small apartment in the same city as her parents. She started to teach Spanish in a high school while he continued with his studies. They were managing on their own--living in an inexpensive apartment and watching their pennies. No need for parental help.

Then everything changed. They had a baby.

Judy and Hal offered some support: They would pay for day care, but only for five months. They set a time limit for one reason: Their son-in-law had finished his studies and they wanted to put pressure on him to get a job. That, however, was proving more difficult than expected. His English is far from fluent--not a problem in solving engineering problems--but it created difficulties in the job search. "Most of the initial interviews are on the telephone and that is a problem for him," Judy says. He does not get call-backs.

He is increasingly discouraged and the five-month deadline is ticking to a close. For Judy and Hal the questions that raises are tricky. If they stop paying for daycare and the husband stays home to provide the care, what will that do his self-esteem, his attitude about his future in the U.S.? Will the young couple decide they would be better off in Chile and move there, taking Judy and Hal's grandchild with them?

Both Judy and Hal work full time and are in no position to provide hands-on child care themselves. Their son-in-law's mother has come for visits from Chile for three-week stints and helps out. But the mother has other children in Chile who depend on her for help.

Given that they can afford to pay for child care, the questions Judy and Hal are asking themselves now are whether they should walk back from their five-month deadline? If so, how and for how long should they provide the helping hand of a child-care stipend and under what circumstances? Should strings be attached--should they, in effect, demand that the son-in-law land a job, any job, even a low-paying non-career job? And if he does, and his after-tax earnings barely pay for child care, what then?

The stakes are high. It's not as though their daughter or son-in-law have a sense of entitlement or aren't trying to make it on their own.

These helping hand questions are never as clear cut as we think they are--no matter what criteria we've set down. And when our grandchild's future and proximity are thrown into the mix--who can say what the right decision is. Of course, the answer ultimately isn't in our hands. It's in our children's. Our insertion of financial assistance is probably not the key factor in whatever decisions they make. It's their life, whether we choose to give it a helping handout or not.

 

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The trend line in the U.S. is in one direction: Most of those of us who can afford it, like to help our grown kids financially--even as society takes a dim view of it. It's the same in Australia, where the name for financial help flowing from parents to grown kids is Sponge Society. But there's a very different attitude in South Korea. Here are findings from surveys in those countries that inform my point.   

In Australia, a recent survey found that 86 per cent of the parents of grown children provide financial help to their adult children. Loans and cash head the list, but rent, credit card bills, vacations, major appliances and down payments on a house are also part of the assistance roster.

Meanwhile, 40 percent of the adult children surveyed admitted to receiving financial support from their parents. One in five of them said they were embarrassed to be getting help from mom and dad.

In South Korea, there are cultural differences but the bottom line is similar. Six out of 10 parents in a recent survey said they are willing to help out their grown children should they face any financial difficulties. 

 

Did they actually do so? 80 percent of the willing had more than once paid living expenses for their adult children. About one-third paid their children’s credit card bills.

 

While 14 percent said they deemed it “an obvious duty” to give financial support to their children regardless of the child's age, only 8 percent thought their grown children should solve their own financial problems.

 

As to the grown children, 87 percent said they were willing to financially help their parents in their retirement years. Half of them said they believed it was their filial duty to do so.

 

Not sure how widepsread that attitude might be here.

 

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When our kids are 20-somethings, they may need a little financial assist. A good job may not materialize right after graduation; school loans may be a drag on an entry level salary; we might prefer to pony up for part of their rent than have them live in an unsafe, low-rent neighborhood.

But when they get to their 30s or 40s, the calculus changes. They ought to be on their feet and independent. And yet, parents of 30, 40 and even 50-year-olds still feel the pull: We want to help out. A need is a need: Who's to judge? A 40-year-old child may have lost a job, be going through a divorce or have extraordinary education costs for the kids--your Grands.

The problem for those of us who are retired--and if our kids are in their 40s, we may well be--is that we're no longer bringing in the big bucks. Pensions and social security aside, the earnings from savings are a big chunk of our income. What if we live to be 100? If we give too much away, we could be without adequate means.

That said, if we can afford to help out, why shouldn't we? Here's one reason: Fairness to the other kids. Whatever savings we don't use up in this lifetime are part of the corpus we leave our children--all of them and presumably equally. And that's the hitch. We're giving more to the child in need by giving money up front--at the expense of the other children, all of whom split what's left.

There is a way around this, according to B. Kelly Graves, a financial adviser. Writing in the Wall Street Journal, Graves suggests making the financial assistance to the child in need a loan that's due in, say, 30 years, or when the second parent dies. "Even though it’s a loan," Graves writes, "the chances are the client [that's you or your spouse] is never going to see that money again." But now the financial aid is, in effect, an advance on the child’s inheritance and the loan is repaid to the parents’ estate from the child’s inheritance. So the assistance is not a handout, the estate is made whole [at least on paper] and the split becomes equal among the heirs.

Now all that's left is too have the conversation with everyone that explains the strategy. Good luck with that.

 

 

 

 

 

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Money Matters: What we pay for when we help pay our grownkids' or grandkids' bills.

  Think our millennial kids can manage without our help? Think again. While most of us grew up in families where we fended for ourselves after we graduated from college--paid our rent, bought our food and clothes--times have changed. Not just here. In the U.K. as well. There, a survey finds that the bank of mum and dad has expanded its base to include the repository of Nan and Grandad as well.

Here in the U.S., a recent survey at VibrantNation.com found that 84 percent of those polled said they cover more costs and expenses for their grown kids than their parents did for them.  Half report they spend more than $5,000 a year on their adult children's expenses. In this connected and digitized world, they are contributing toward more than the rent or the groceries.

Here's what we boomer moms and dads report we are paying for (for our college and post-college kids): 

59 percent are paying for the adult child’s cell phone (a percentage that doesn’t decline as the child reaches age 30).

 

53 percent are picking up the tab for insurance.

 

39 percent are covering their adult child’s rent

 

38 percent take care of travel costs (and this does not include travel to and from school)

 

36 percent are paying for clothing.

 

33 percent help out with cars and computers.

 

24 percent provide money for home furnishings.

 

According to the survey, we are also called in for advice on key purchasing decisions:

 

42 percent for financial services advice

 

40 percent on insurance

 

39 percent about what car to buy

 

34 percent about food and recipes (20-somethings in the supermarket are more likely to call parents for advice than their friends.)

 

31 percent ask for help on appliance purchases

 

14 percent even ask for advice about buying technology

 

In the U.K., a survey looked at help young adults were getting on education costs. A Saga Savings poll found that more than a third of Britain’s estimated 11.8 million grandparents have funded, or are planning to help fund, their grandchildren’s studies--to the tune, on average, of nearly £4,000 [around $6,600].

That's a good deal more than grandparents said they were saving and contributing to university costs five years’ ago. Then the total pledged was a £1,000 [$1,660]. Tuition there is roughly one-half to one-third of here.

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We were well into our pear-tini's (a delightful pear flavored cocktail) when my friend C said she didn't mean to gossip but....her husband's father still pays his daughter's credit card bills even though the daughter (the dad's youngest child and only daughter) is about to turn 40. The daughter, C says, has a good job and so does her husband. "He [the dad] just spoils her rotten," says C, whose Midwestern father wouldn't have dreamed of running up a credit card bill, no less paying his daughter's debts or minor indulgences.

I cringe. I don't pay my children's credit card bills but I do help out my kids occasionally--and I enjoy doing it. Am I spoiling them? They give no indication that they expect any assistance. The few times they have asked for money to help them ride out a cash flow problem, they have paid it back quickly and in full. It was hard to express to C how much pleasure I get from giving--from knowing I'm there as a helping hand, to take the edge off any financial worries or make some small indulgence possible.

Now I feel vindicated--and pretty upbeat about myself. A new study finds that while we parents of adult children want our kids to be independent and self sufficient, some of us still get a thrill from helping out--though some decidedly do not.

The study looked at 337 older parents of middle-aged children and found that parents are giving help to their children, well into their children's middle age. "This support is often associated with lower rates of depression among the older adults," reports Lauren Bangerter, one of the researchers from Penn State. Those who felt rewarded by providing financial support had fewer depressive symptoms when they were helping generously compared with when they weren't. Meanwhile, those who did not feel rewarded by helping financially had more depressive symptoms when they helped financially.

The results also suggest, according to Steven Zarit, a Penn State professor also involved in the study. "that depressive symptoms are more frequent when the level of reward a parent feels regarding giving is inconsistent with the amount of tangible support that he or she actually gives."

To those of us who have the wherewithal and share it with our grown kids no matter their age: Let's have another pear-tini and give ourselves a pat on the back. We make ourselves feel good about being indulgent--even if others see it as spoiling our kids rotten.

 

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Money Matters: Inside the bank of Mom and Dad

So the kids have made their way through college. They're launched into the world of work and creating their own families. We're still their parents, of course, but the financial part is over. We can now center our financial plans around us and our retirement needs. At least that's what we're thinking.

Think again. Turns out that for many of us, that was an incorrect assumption.  A Merrill Lynch Retirement Study, conducted in partnership with Age Wave, finds that 62 percent of those of us older than 50 have provided financial assistance--a helping hand--to family members during the last five years and that most of us never budgeted to do so.

A few other points from the report ("Family & Retirement: The Elephant in the Room.")

Payback: Those helping family members rarely do so because they expect future help or financial payback. Older adults are 20x more likely to say they are helping family because “it is the right thing to do” than because “family members will help me in the future.” They are 5x more likely to stop family support because the recipient is not using the money wisely than because of worries about being paid back.

--The Now Factor: Those giving money to family members are 3x more likely to feel “appreciated” than “taken advantage of.” This generational generosity also extends to a shift in mindset regarding inheritance and giving to family. Three in five (60%) people age 50+ say it is better to pass on their assets now rather than waiting until end of life. Age 50+ women are even more likely than men to say it is better to pass on inheritance during retirement (65% vs. 53%).

--Favorite Subsidies: We tend to help out our adult children by paying for rent or mortgage payments, insurance, cellphone bills, car purchases or leases and tuition expenses. These subsidies averaged a total of $9,200 over the past five years among people with less than $250,000 in investible assets, and $19,100 for people with between $250,000 and $500,000 in investible assets. Among the very wealthy (those with more than $5,000,000 in investible assets), the average five-year family outlay was $313,000.

--The Stepkids: Adults age 50+ generally feel some financial responsibility for stepfamily members (most particularly stepchildren), but usually less responsibility than they feel for biological relatives. That said, three in ten (32%) also say that they and their spouses have different financial priorities for their own children than they have for their stepchildren. Those with stepchildren are less likely to divide their assets equally than those without stepchildren.

 

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Parenting Adult Children: Their choice of an ill-suited spouse may be our fault--and Darwin's.

 

 

Don't like your child's choice of partner or spouse? I have lots of friends, as this previous post attests, who can't understand what their daughters or sons see in the person they've chosen to marry or partner with for life. Take Jane and Lew. Their daughter is on her second spouse and they haven't liked either one of them: Where their daughter is a lawyer, both of their sons-in-law were/are in law enforcement positions that have little upward mobility, to say nothing of a financial future. Jane and Lew are making their peace with the second spouse since he is the father of their grandson. But they're still confused and confounded.

They shouldn't be, at least not according to Piet Van Den Berg and Tim W. Fawcett. "a  opinion piece by. If I read their New York Times column "Evolution and Bad Boyfriends, correctly, Jane and Lew are enablers in their daughter's choices. They have, in short, gotten what they wanted.

The authors' first point: All over the world parents and children "frequently don’t see eye to eye on what makes a suitable partner." If it's so widespread, the authors argue, "there is reason to suspect that it might have something to do with our evolutionary history."

How so? "It is in parents’ evolutionary interests to distribute their resources — money, support, etc. — in such a way that leads to as many surviving grandchildren as possible, regardless of which of their children provide them. Children, by contrast, have a stronger genetic interest in their own reproduction than in that of their siblings, so each child should try to secure more than his or her fair share of parental resources. It is this conflict over parental resources that can lead to a conflict over mate choice."

After building a computer model to simulate the evolutionary process of dating and mating, the authors came up with this finding: "...[P]arents in our model evolved to invest more resources in daughters who chose mates with few resources. This unequal investment was in the parents’ best interests, because a daughter with an unsupportive partner would profit more from extra help than her more fortunate sisters (the principle of diminishing returns on investment). By helping their needier daughters, parents maximized their total number of surviving grandchildren. But this unequal investment created an incentive for daughters to “exploit” their parents’ generosity by choosing a partner who was less supportive."

So it's all our fault if we don't like the guy our daughter marries. Jane and Lew are proof of the researcher's point. They are, in fact, helping to support the couple [paying the mortgage when their daughter took a year off to be a stay-at-home mom; loading their daughter's freezer with food; providing vacations]. But there is a co-conspirator: Darwin's making them do it.

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Boomerang Children: A strategy for emptying the nest

Some of us go with the flow when our grown kids move home with us--especially if they're recent graduates and are trying to gain footing in the work world. A neighbor whose son went to cooking school (to study the glorious culinary arts) loves having his son at home: When the son cooks dinner--and he does so a few times a week--the meals are sensational.

But more of us find the experience frustrating: too up-close with adolescent habits they have yet to shed and with adult ways we're not ready to deal with. For some of us, the experience is financially draining: We're spending money on our adult children that we should be squirreling away for retirement. That is the point Barbara Torris makes in her blog Retire In Style.

She has proposed a solution: downsize. Sell [or rent] the house you brought you kids up in and move into something smaller that doesn't necessarily have room for an extra grown up.

Here's a fuller explanation of the theory from the Retire in Style post:

"Many mid-life and retired people are downsizing so that, when the children need help, coming home to live will not be a choice. They know it would not be a happy situation for them. Interesting huh?

"Could it be people are saving enough money by downsizing so they are able to help children in trouble but not make them dependent on them totally? The family remains on good terms and the children continue to mature and be self reliant. Helping pay part of the grown child's rent is a lot different than them coming home to live rent-free. The child could still be responsible for most of the cost and be forced to live within their means."

Just throwing the idea out there, as was RetireInStyle.

In case you're wondering who--daughters? sons?--is boomeranging back home, there's this recent finding from Pew Research.

Pew Research Center Notes: “Living at home” refers to an adult who is the child or stepchild of the head of the household, regardless of the adult’s marital status. Source: Pew Research Center tabulations of March 2012 Current Population Survey Integrated Public Use Micro Sample.

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Money Matters:Our grown kids' financial struggles are tougher than ours were at their age.

 Our generation may be "overinvested in our children." That's the reason financial planner (and consumer advocate), Eleanor Blayney, gives as why some of us have let ourselves slip into debt--despite carefully saving for retirement.

There is, of course, the job market problem--an issue for those coming out of college in the past few years. Now that they are grads, we may help them with rent, put them up rent free at our place and otherwise offer a helping hand until they find their footing. It can become a problem when the costs go beyond our vacation funds and tap into out retirement kitty.

But the issue is wider than that. Even their older brothers and sisters who entered the job market at a more generous time are struggling with financial disadvantages. According to a March study from the Urban Institute, they have considerably less wealth than we did at the same stage of life: They bought homes at the height of the bubble--the market's peak--and are now stuck dealing with the decline in home prices; they also put less money down (unless we helped with that 'little' investment), making it more likely that they have negative home equity. The UI study also reports that younger workers have tended to marry at a lower rate, have lower incomes than their parents, pay much higher costs for health insurance, and are more likely to be carrying college debt.

No wonder many of us rush to "invest" in them, to try and even out the balance and keep them heading in the direction of a lifestyle that al least nears the equal of ours. If that sounds frivolous--or keep-up-with-the-Joneses--it is nonetheless at the heart of a worry many of us have. A friend remembers her daughter's post-graduate apartment in a run-down (low-rent) section of a city in California. It was in a dreary neighborhood in a one-room apartment that had hooks on a wall for a closet, an entryway covered with planks (to keep you from falling into a hole) and space for little more than a bed and night table that doubled as the table where she ate her meals. "It made me want to weep," my friend tells me. "How could her father and I live in such comparative luxury and let our child live in such reduced conditions. I wanted to write her a check right then and there and demand she find a better place to live."

Most of us resist (as did my friend) and let our kids build character and work their way through the "tough" times. That is, we do that unless we feel the safety of our child is compromised. And then we invest, whether we have to tap our 401k account or not. It is one thing to say--as friends without children do--that children should stand on their own two feet, that we do them no favor by sheltering them from reality. No one helped them out when they were our kids' age.

And yet, times have changed. the burdens are blurred--and heavy. We don't want to spoil them--whatever that means--or enable destructive habits. And that remains a basic tenet in whether or not to help support a grown child. But beyond that, for many of us, the investment seems both necessary and worthwhile.

 

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We've brought up our children to be independent. And many of them have grown up to be just that. Certainly, my friends Pam and Don have two such children. One of them--a daughter--lives in apartment near them. She's married with two small children. Pam and Don play an active part in their daughter's family life--picking the kids up from pre-school two days a week; babysitting on Friday evenings so the young parents can enjoy a date night. That's the kind of support they've been giving since the grandkids were born.

For the past year, though, support has turned financial as well. Their son-in-law lost his job last year; then their daughter did. Neither held high-paying positions but they were able to make ends meet on the two salaries. Though they are out of work, rent has to paid, food has to be purchased, the pre-schoolers need to be clothed and fed. Pam and Don have stepped up. Don had been a successful businessman and though he is now retired, there is a hefty nest egg in place. They can afford to use some of it to help their daughter and her family. Better now, they reason, then later when their daughter might have no need of a financial legacy.

They sat down with their daughter and son-in-law, figured out what they needed financially to get by on a no-frills budget, and Pam and Don started supporting them. "These are decent kids. They haven't done anything wrong," Don says. "They've worked hard, applied themselves. But they got hit by this downturn."

Both young parents have been job hunting for more than a year now and looking into entrepreneurial opportunities. But as the weeks and months tick by, Pam and Don are wondering when the joblessness will end, how much longer they can afford to do this and what they will do if it gets to the point where the drain on their resources will mean a change in their life style and a real threat to their financial well-being.

These are close friends, and we've gnawed over "the situation" with them and wondered what we would do in their place. They are, of course, fortunate that they can afford to help out right now and probably for another year. But should they suggest their daughter and family move into their home--the daughter's old room is still available as is the guest room/home office. Should they insist that their son-in-law, who spends his day on various aspects of job hunting, take a Starbucks-McDonald's type job just to bring in some cash. Or that their daughter do the same. Pam can't imagine what some of these choices would do to their relationship--the too-closeness of living together; the feeling that they were asking their daughter and SIL to throw in the towel on their future careers. "People talk about tough love," Pam says. "That may be something that applies when your kids are coming out of college, but when they've got a family and they're trying as hard as they can--well, it's different."

"The groping accident of life" Thomas Wolfe called it. There's so much risk out there--unexpected incidents that happen despite our best intentions and careful precautions. When our grown children are groping along the detritus of an accident, shouldn't we be there for them? Financial counselors will advise you, Don't pauperize yourself helping out your grown children. But sometimes they aren't the only ones in the accident.

 

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