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There is an article on the MSN Money page today regarding retirees and pre-retirees giving sums of money to their children for home purchases. I am substituting "Kick-Start" as the terminology in place of "home purchase" because funds transferred may have been used for homes, student loan debt repayment, initial funds for retirement savings investments, etc.
So how many of us have done this, or considered doing it and decided to not do it, and why?
Starting off:
Yes we did it.
Dollar amounts to remain confidential.
Financial Advisor thought we were Nuts but developed a plan for us
We did it to "pay forward" in the same manner my wife and I benefited from unannounced money gifts from my parents when our household and family were young. Why make our children wait, and potentially struggle financially, for decades until our deaths?
No strings attached other than each couple was told 5-6 months in advance that this would be happening, what the dollar amount would be, and asked to determine their own plan of how they would use the money.
I fully expect to be called Nuts by this forum too. Oh well, we are all different.
I'm proud to say we gave our Dear Daughter an advantage. I had started saving for her College Education the year she was born. We rather painlessly built a nice chunk of money such that her choice of College (and it's cost) were a non-factor in her decision. She finished her undergrad degree in 3.5 semesters, so she graduated in January and found a job before her classmates had walked for their diplomas. Her new job had a tuition plan that paid for her MBA degree.
She was looking at Townhouses near her workplace. When she found a nice unit, we gave her the 20% down payment, so she wasn't paying PMI. Her Mortgage payment was less than comparable rents.
This money didn't fall from trees. It took planning and some sacrifice on our part. But I consider it one of the best investments I've ever made. So I didn't get back to that Caribbean Island for vacation or buy that new car.
- paid college tuition, no loans, no debt
- bought first car (used Honda)
- started an UGMA when born and matched every dollar he put in it 1-to-1
- Started Roth IRA as graduation from college gift
We paid for our 2 sons’ college education. Both were private schools, so not a small item
We also bought their first used cars.
Since then, we’ve helped at random times with emergencies. Also, when an inheritance was larger than expected, we shared by giving each of them 15% of the amount.
No regrets. It’s similar to what my parents did for me.
No, and certainly everyone goes about this differently. We allowed them to figure things out on their own, the if you want it- you work for it model, and to crawl out of a hole if they made one. Luckily no major screw ups, all doing well and can fend for themselves no matter the economic conditions. When the time comes, they will inherit whatever we would have given them, plus! That will be their reward for fiscal responsibility.
If I could do it without jeopardizing my own retirement, then it’s fine. We paid for our children’s college, and a nice wedding for my daughter. We co-signed one time @ on a car loan.
Now that we are retired, we would enjoy giving the grandkids more, because they do have student loans, but we just can’t.
Nope. We did it on our own and wanted our kids to do the same. We helped out here and there but didn't pay for their college or their homes, etc. They get whatever is left over after we die, like we did from our parents.
We paid for our children’s private school education from Preschool to Law school.
They received a new car after undergraduate was completed.
Paid for their weddings.
After they were established, we moved 1k miles away...they’re on their own and doing fine.
My kids attended private colleges. We paid in full for undergraduate degrees. I'm giving them living expenses for graduate school. When they finish graduate school, we'll probably give them a lump sum to help pay off their student loans.
Funny, I don't think I'll pay for weddings. It's the first big ticket item the couple purchases together. I think a couple needs work together and figure out a wedding budget they can afford and pay for it. Then again, we don't have much extended family for a big wedding.
Frankly, paying for undergraduate and helping with graduate school is more important.
My parents and my husband’s parents didn’t pay much for college. No first car either. I’ve already paid for college, and a brand new car. I’m holding off a bit. But lately I’ve heard California is floating proposal to tax more inheritance money. So I may change my mind. So far both kids are not where they are in order to buy anything yet.
Last edited by NewbieHere; 05-20-2019 at 12:59 PM..
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