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Old 07-18-2018, 11:39 AM
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Big Sky Big Sky is offline
 
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Default Giving financial help to adult children

Sat in a boat for a couple of days with a friend last week. Solved all the world's problems.

Something we talked about at length was helping out our kids financially.
Generally, I've long been in the "let them make their own way" camp, but after talking with my friend I am rethinking some things.

His thoughts ....As an example, $10k contributed to a down payment on a house will save them much more than that in the long run. Why wait until you die to give them money when a small amount given now can help so much more?

What we have done is repay for post sec educations.
Also, sold my kid our old pickup for a steal of a price. He's saving tons by not making payments and putting the money towards his next vehicle.

What are your thoughts?
Have you helped your adult children?
What have you done?
What's reasonable? What's too much?
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Old 07-18-2018, 11:51 AM
fishtank fishtank is online now
 
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iam not this far yet,my kid is only 2 , small help is ok only if they can stand on their own , no point of helping them get a bigger house if you cant afforded on their own. its better the distribute your $$ to them over time because if they don't know how to manage their money, when they get the lump sum they will **** it all away .

like the saying goes

"You give a man a fish and you feed him for a day. You teach him to fish and you give him an skill that will feed him for a lifetime "
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Old 07-18-2018, 11:54 AM
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I've been think about this too. I am in the planning stages since my kids are still young.

I see it as a fine line. What I plan to do could very well change but this is my plan as of now.

I will help the kids get their first vehicle and will pay for a reliable vehicle. If they want anything newer or different I will pay half after the amount for a reliable truck. Within reason (Asked them what they want for first vehicle. Son wants a monster truck and daughter wants my '77 vette)

Still undecided for schooling if it will be a lump sum or pay half ect. I have seen too many kids have all schooling payed for and end up taking twice as long to get a degree because they have no financial strain if they fail a class or take a few years more.

Down payment for a house. I plan to pay half of their down payments.

Like I said this could all change but it's just what I am planning for.

I got travel luggage for my 18th birthday and got told to use it... That was the last help I got. Things have turned out alright for me and I have no hard feelings since the money wasn't there. I do think it would have been a better start with some help but I like to look at what I do have and know I worked for it.
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Old 07-18-2018, 11:56 AM
250mark1 250mark1 is offline
 
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i had my parents help me with a 10K down payment back in 1997 when i was 20 years old on my first house when they were cheap lol ( paid 110K)
saved me a boat load of cash as who knows how long i would have rented for

also put the mortgage in there name with the (mortgage payments coming from my account )
which would protect the investment if there was a bad common law relationship
once i was married we assumed the mortgage
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Old 07-18-2018, 11:58 AM
Gerald J Gerald J is offline
 
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Agree with a lot of what you said, ie "why wait", etc. Selling/gifting vehicles, paying for post secondary education during or after, helping with down payments, these are some of the things I've done. There is a balance there. I happen to think it's ok for your child to struggle a little bit, ie. eat Kraft dinner when going to school, drive a clunker for a while. But help them out a bit if you can/when you can.

Good post.
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Old 07-18-2018, 01:02 PM
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Little red riding hood Little red riding hood is offline
 
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Quote:
Originally Posted by fishtank View Post
like the saying goes

"You give a man a fish and you feed him for a day. You teach him to fish and you give him an skill that will feed him for a lifetime "
I thought it was "if you teach a man to fish, he can go on pogie and complain about how bad the fishing is!
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Old 07-18-2018, 01:15 PM
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I am generally against, right now anyway, my oldest is a long, long way from being an adult, financial help, but I have no issues with providing help. Borrow the car, no problem, live at home while attending post secondary education, not an issue, give you $10k, probably not going to happen. We hired four summer students, all attending some form of post secondary education. Its fairly evident via their work ethic and attitude who is receiving financial help from their parents and who isn't.
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Old 07-18-2018, 01:20 PM
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The best way to save some cash for your kids. Pay there education to get them started.


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https://en.wikipedia.org/wiki/Regist...n_Savings_Plan
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Old 07-18-2018, 01:28 PM
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omega50 omega50 is online now
 
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My wife divorced in 1999. Three kids under 15. Her ex convinced 2 of the older kids to follow the money and move in with him.
Youngest stayed with her on a frugal lifestyle.
Fast forward 19 years the two kids that had Daddy pay for their loyalty struggle in every aspect of their finances making bad decisions and still getting subsidized by Daddy to the tune of 2k-3k a month each.

Youngest has great work ethic-good person and great decision making greatly surpassing the trajectory of the other two.
The two money grubbers are always looking for the easy button and despite their continual moaning have never had to struggle or develop appreciation for what they have. They bad mouth the ex relentlessly despite being into him for so much money. He controls them with money or the threat of getting cut off.

Some kids benefit from the umbilical cord and some suffer.
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Old 07-18-2018, 01:31 PM
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Quote:
Originally Posted by Gerald J View Post
Agree with a lot of what you said, ie "why wait", etc. Selling/gifting vehicles, paying for post secondary education during or after, helping with down payments, these are some of the things I've done. There is a balance there. I happen to think it's ok for your child to struggle a little bit, ie. eat Kraft dinner when going to school, drive a clunker for a while. But help them out a bit if you can/when you can.

Good post.
Agree with this. I have also bought two daughters first vehicles, helped with second, Pay for secondary education for both and housing while in school. Helped with apartments while starting out, portion of the rent until there are established in there jobs, I really want my kids to be happy while I am alive , but they have also had to learn as they have to pay there own bills, phone, utilities, toys, groceries and portion of the rent until they were established in there careers then they take over on there own, few months, vehicle payments if they want something other than the one I bought for them. There are kids (up to 30) out there that don't know how to manage money and have never needed to, There are also lots of this same age group that do very well with there own money. I would never flaunt it to my kids and have an open wallet policy, but if they need it and I can help I will. (key word is need). get it all when I am dead is not very rewarding for either side.
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Old 07-18-2018, 01:48 PM
angery jonn angery jonn is offline
 
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When school is done the free ride will be over in my house. With 4 boys I won’t be able to afford to support that many man children, lol. I’m blown away by some of the things parents do for their grown children. I also find the kids who get the most help always seem to think they have it the worst.
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Old 07-18-2018, 02:03 PM
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Okotok Okotok is offline
 
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Quote:
Originally Posted by Little red riding hood View Post
I thought it was "if you teach a man to fish, he can go on pogie and complain about how bad the fishing is!
Actually it's "Teach a man to fish and before you know it, he'll be microwaving it in the office and stinking the place up".
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Old 07-18-2018, 02:07 PM
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Depends on the kid and depends on your own financial situation. If you have a good kid who has proven they are responsible and you are in a financial position to give them a leg up, I say why not? If you have a kid that is a leech and a bum and has never shown any modicum of responsibility, you are probably doing worse for them by enabling their poor life choices. I don't think you can have a general reply to something like this. Every case is different, but yes, in general I want to help my kids however I can without causing them to stop helping themselves.
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Old 07-18-2018, 03:11 PM
bobtodrick bobtodrick is offline
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Quote:
Originally Posted by tirebob View Post
Depends on the kid and depends on your own financial situation. If you have a good kid who has proven they are responsible and you are in a financial position to give them a leg up, I say why not? If you have a kid that is a leech and a bum and has never shown any modicum of responsibility, you are probably doing worse for them by enabling their poor life choices. I don't think you can have a general reply to something like this. Every case is different, but yes, in general I want to help my kids however I can without causing them to stop helping themselves.
X2 I've got two teen boys that are hard workers, both in school and with part time jobs to pay for some of what they want to buy.
Why wouldn't I help them if they need it, and I can afford it. I don't deny myself anything I want...and last I heard you still can't take it with you.
If you're not willing to help them...why did you have them?
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Old 07-18-2018, 03:31 PM
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Nicer to a give a little help with a warm hand than a cold one.....
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Old 07-18-2018, 03:33 PM
Norwest Alta Norwest Alta is offline
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My kids are 25,23,22. All three work. Unless they ask I don't help. They've borrowed money from the wife but the rule is that the loan has to be paid back before we'll loan them anymore.

What ever they have saved for a house we'll match is another rule around our house.

For post secondary school we told them that we'd pay only after the school work is done and they've passed.
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Old 07-18-2018, 04:17 PM
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Quote:
Originally Posted by tirebob View Post
depends on the kid and depends on your own financial situation. If you have a good kid who has proven they are responsible and you are in a financial position to give them a leg up, i say why not? If you have a kid that is a leech and a bum and has never shown any modicum of responsibility, you are probably doing worse for them by enabling their poor life choices. I don't think you can have a general reply to something like this. Every case is different, but yes, in general i want to help my kids however i can without causing them to stop helping themselves.
x1,000,000
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Old 07-18-2018, 04:49 PM
Big Grey Wolf Big Grey Wolf is offline
 
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Just be careful, okay to help with post secondary school/trade etc, some down payment home, possible help after graduation with vehicle. Never I mean never help with starting business, investments etc. I knew guy cosigned for business loan for son, lost it all and dad and mom lost nice acreage.
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Old 07-18-2018, 04:56 PM
Roderek Roderek is offline
 
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I bought both my kids there first car when they were 17, they both had to have a job in order to pay for gas and insurance/maintenance. This has been great for both of them. They both have appeared to learn responsibility with this and both have managed to save a decent chunk of money on part time wages, stocking shelves.

For School, I have told my kids they need to pay for there own schooling, I have seen to many kids **** away their parents money by not taking school seriously. Once they have completed there degree/diploma/trade whatever they have chosen to do, I will reimburse them some or all(they don't know that)
My oldest was actually able to pay for his first year at SAIT without needing a loan at all. and by the Fall will have enough money to pay for his second year as well.

My hope is when I reimburse them they will be able to use that for a down payment on a house/condo, but who am I kidding they will never be leaving.....
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Old 07-18-2018, 05:29 PM
Sundog57 Sundog57 is offline
 
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Education
Started putting money in an RESP as soon as kids were born.
As much as we could or as much as was allowed.
Many years this was a tough tough thing to do - RESP money came out of after tax earnings - no new car, no cable TV, lots of careful budgeting.
Both kids now in the workplace, making their own way very nicely and with no student debt.
No whining about the cost of education and "the govt oughta"
Probably the best thing I ever did for them.
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Old 07-18-2018, 06:20 PM
Drewski Canuck Drewski Canuck is offline
 
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Default Hope for happily ever after, expect DIVORCE!!!!

This is my Stock in Trade. Pay attention or don't, I make more money the hard way from you that don't pay attention.

IF you are giving a gift to a married or unmarried common law Child to buy a House, the fight always is the same in the Separation when the benefactor says it was a LOAN or a gift to their Child only, and not to the Spouse / Partner.

A Trust Declaration on the money advanced can be registered on Title of a House as a Caveat. When you die, your Estate can decide how to handle it. If there is a breakup, the Trust interest is protected by the Caveat and there is no fight.

IF the Spouse / Partner does not like it, they can decide to accept the help or not. Their call.

This also ends a lot of fights between siblings over one Child getting more than another while you are alive.

Just for fun, if you don't want to listen to me, look up Sparrow v. Sparrrow Alta CA, and see the chaos a gift of a Cabin created when proper steps would have ended it all in the beginning.

Dream about what the bill might have been on that file on both sides.

Everyone understands the issue when they have to talk through their wallet.

Drewski
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Old 07-18-2018, 07:55 PM
oldjeda oldjeda is offline
 
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Default Die broke

As the saying goes, it's a pity to die poor but it's total insanity to die rich. I firmly believe that with the proper planning, there will only be enough money left in my estate to pay the funeral home. If I plan it well, that cheque should bounce.
Coming from my experience, seniors of my parents generation have most of the savings in our banks and they are now living well into their 80s and 90s. What kid of theirs, who is probably also retired, needs an inheritance at that age? Help the family while you can see the benefits, but do it with as much wisdom as you can find. Set up education funds for the grand kids, help get the kids into houses, or vehicles, then let them work things out. Beware of the bail-out black hole though. There is no returning from that one.

My thoughts
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Old 07-18-2018, 08:23 PM
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TireBobs take hit it pretty well. MY family has done this for three generations that I'm aware of. My Grandpa and his two brothers started a construction business but were working for the family business that they were born into when they started the new venture up. One of them spec-built a home following WWII and he made good money selling it, then he built a second with the same results, then he got his brothers into the fold with him. I suspect some seed money from great grandpa went into that. The 3 brothers business was a great success and they became even more well known in their community than from the preceding family business. When my Dad was positioned as a manager to buy into his employers business here in Calgary there was some family money that helped him do so.

When my sister and I were young adults our Grandmother liked to help out with sensible purchases, she wanted to sponsor mattresses and major appliances. I was renting a suite and using a Laundromat when she made the offer to help with a washer and dryer, being that I wanted to be very respectful of her offer and show some sensible frugality I selected a mismatched laundry pair from a used appliance shop. Grandma was a frugal woman, a daughter of Scottish immigrants she grew up in the Great Depression so that surely accounted for her penny-pinching ways in spite of having become wealthy.

Grandpa's surviving brother is very financially comfortable and he has been generous to his adopted daughter, his surviving biological son though is another matter. The guy is useless and my uncle knows it, but he supports him anyways. He has declared his adopted daughter as his executor (he's 94) and it will be up to her to send the cheques to her useless substance-abusing brother who is living in Vegas. Sometimes the apple falls pretty far from the tree: WWII veteran/ businessman & self-made millionaire/ community philanthropist spawns freeloading junkie. This uncle is a real hoot, he's 94, he day-trades stocks for 6.5 hours a day and continues to make an enviable income. The curious part is that I'm the spitting image of him, so much so that my late Aunt was looking at me rather entranced when we were last together.

Anyways, back from tangentville: there will be people who do deserve generosity and those who don't. There will be those who can get by of their own volition without any financial help and those who can't even make ends meet when the world is handed to them on a platter. If you feel like extending a gift or a loan just be sure its not going to cause you any financial hardship , what if you live 15 years longer than you expect to? As noted already, the experience of a person dealing with a few reasonable chunks of money earlier on can help them from wasting it and regretting their actions were they to receive it all at once.
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Last edited by CaberTosser; 07-18-2018 at 08:40 PM.
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Old 07-18-2018, 09:07 PM
amosfella amosfella is offline
 
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I find this topic interesting... I guess I'm on the other side of this. I've been the beneficiary of such gifts over the years. Mostly from my grandma. Over the years, I've looked after her yard, missed work to take her to appointments, helped look after her in her home which she is still in at 97 years of age, etc. I don't do much work on her flower beds though. I took a lot of time away from paying work to look after grandpa when he was dying as well.

When I graduated high school, she put $5000 towards my first car, and loaned me another $2000 to allow me to get a better car. I paid her back in 4-5 months.

After that car wore out, I bought another car, and drove it for 12-13 years. The transmission was starting to give problems, rebuild parts for that transmission are scarce, and the only rebuilt one I could find was worth much more than another car in really good condition.

So, as I was taking her to appointments, etc, she offered me $8k to buy another car. So, I found a nice car that was an collision rebuild for $7500, and talked the guy down to $6900, and put about $2500 into it, and have a really good car.

I've taken a fair bit of time off of work without pay to take her to appointments over the years, still look after her yard, for a handful of cookies as payment, etc. She thought it was a fair deal. She's also given me most of my inheritance now, as she said that she'd rather see me enjoy it, than wait till after she dies.

I think it all evens out in the end...
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Old 07-18-2018, 09:14 PM
Duncan71 Duncan71 is offline
 
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Other side of this too...

If they demonstrate hard work and smart decision making a big hand up for them now may pay dividends in the future. On the flip, small handouts to get buy staving off that “I only have $48 dollars to make it until payday” situations I think only reinforce the idea that being financially responsible isn’t that important.
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Old 07-18-2018, 09:49 PM
2 Tollers 2 Tollers is offline
 
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We have helped out several adult relatives. Early on when we were young we helped some with small amounts (under $3K) we have never seen that money again, some with used vehicles so they could maintain a job - never seen anything back. We learned.

Now we want to see some effort. We do not immediately step forward to help. In the case of our kids they have to earn and save for their mortgages. Once they qualified we helped out in effect to reduce their monthly payment. Our thoughts were they could get some of their inheritance early which would help them get roots and go forward. We learned a bit as we grew older.
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Old 07-18-2018, 10:11 PM
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Quote:
Originally Posted by 2 Tollers View Post
In the case of our kids they have to earn and save for their mortgages. Once they qualified we helped out in effect to reduce their monthly payment. Our thoughts were they could get some of their inheritance early which would help them get roots and go forward. We learned a bit as we grew older.
Like this idea.

A question for those who have given money for a mortgage. Did you just give them the money or are you listed on their mortgage as a lender?
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Old 07-18-2018, 10:12 PM
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When I & my sis started paying room & board, mom and dad(mom did the deed) put 90% back into a bank account. When I moved out to buy a house, got a nice surprise check to help with the down payment. They have helped me along the way money wise as they both said, when their parents could afford to give back, they were already set and didn't really need it. They needed the help early on. I will do the same for both my kids who are 20 & 18.
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Old 07-18-2018, 10:15 PM
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You don't want to be the richest person in the graveyard but you don't want to enable a free loader either. We don't have kids of our own but my wife raised her niece. We are in no way rich but we live comfortably and we've had to reign in the handouts. The niece hasn't really had to struggle because Aunty and Uncle will help out if it gets bad, but the bank has shut down for now. She needs to learn priorities. Can't complain you don't have rent money when you get your hair or nails done. Or don't have a job but feel you're too good to take the bus cause you can't afford gas money.

And then on the other hand, the father in law is a multi-millionaire (like 9 figures, and a private plane rich) but he does not part with a nickel. He does send a $300 cheque at Xmas but there are zero handouts. We asked for a $30,000 loan to buy a work truck and pay the loan back in 6 months. He countered with $10K and pay the loan back in 3 months. Always the business negotiator. I guess that's how the rich stay rich.

We don't need the money but it would be nice to spend the inheritance when we're in our 50's and not in our 70's.
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Old 07-18-2018, 10:17 PM
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I saved up somewhere between 10% and 15% down payment for my first house, and Grandma pitched in to supplement that just as she had already done with my older sister.

When I bought my second house it was a sudden opportunity that I had to take advantage of and I still owned my first house. I handled the down payment from my savings though my income did not qualify me for the second mortgage so my Dad stepped up to co-sign on it. I owned the two homes simultaneously for 6 months while I finished off fixing up house #1 and I got Dad removed as the co-signer on house #2 following my sale of house #1. I was proud that I didn't need to borrow a penny there, only his signature.
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