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Not myself (parents had little extra money, and made it clear that we were on our own, financially, from the time we graduated from high school), but a woman I worked for.
She paid for her daughter's college completely, including an apartment (because her daughter couldn't possibly live with anyone else). When the daughter couldn't get a job (after looking for a month) her mom offered to pay for law school completely (same deal with the apartment). She gave her daughter a brand new car upon graduation, as well. All of this with the expectation that the daughter would pay her mom back in full. The tab was around $250,000. Mom paid for it with a home equity loan, and by gutting her retirement accounts.
The daughter worked for 1 year as a lawyer (her first job ever), then decided it was too stressful, so she got a job teaching. She was limited in where she could teach, so she asked her mom again to pay for more schooling. Her mom at this point was tapped out, and had to say no. After the daughter married her wildly successful lawyer husband, she informed her mom that she was quitting her job as a teacher too, and that there would be no way to ever pay her mom back. No mention of actually using some of the hubby's money to reimburse mom. Nope.
Mom now lives in a small apartment, because she had to short sell her house (the business she owned took a nosedive when the economy crashed). She has no retirement left, so she is working at a Kinkos to pay the bills until she can collect SS. Her old truck barely runs, and can't buy another because her credit is shot. She is however, expected to watch her grandson whenever mom needs a break, and isn't paid for that.
All choices she made, and would gladly do again (her daughter is the only family she has). If you can help your adult kids, I think it's awesome. But this woman violated the cardinal rule of financial aid - don't jeopardize your own future for the sake of your children. I just cannot understand how her daughter can live with herself, knowing that she basically stole her mom's retirement. I'm sure she justifies it by telling herself that her mom "offered".
The 3 out of 4 people under/around 30 (that I know personally) who now own homes had either inheritance or other support for their down payment.
In all cases it came from their grandparents.
The other I know had a very good job right out of college and is a very good saver.
All of these homes are in So Cal.
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Personally, my parents paid for my college and let me (as much as I let myself) live at home for a bit. They also paid for my wife's and my wedding. That being said my degree and wedding were WAY below average cost, though I still appreciate it. My parents aren't rich by any stretch of the imagination.
My parents have also offered to give me money for a down payment for a house, however a down payment here is anywhere from $90k-$120k for 20%, my parent's portion would likely cover a portion of the closing costs.
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I would assume that a majority of first time buyers have had help in some way, shape, or form from their parents. And I would assume that even if they aren't current buyers, that a majority would have helped them in other ways.
Its like there's a tacit understanding that things are different now, and it is very evident.
Neighborhoods have more cars now, and new homes are now multifamily by design.
Since my parents are getting older, my wife and I considered having them live with us sooner rather than later.
My father paid 3 years of college tuition and my mom gave me an old 96 Explorer to drive in college (this was in '08). Returned it to her after I drove it for 2 years during school. I bought a condo at 25 without any support from my parents for that. Although I got the usual house warming gifts like a new crockpot and some towels.
I am likely to be buying my first home within a year and was reviewing the gift guidelines for FHA mortgages this afternoon. These were fairly generous guidelines about gift contributions for downpayments. As I'm now almost 30, I'm behind many of my peers in purchasing a home, but many folks around my age I know were quite open about their parents helping them in a significant way. My family doesn't have the financial capacity to help, so I can't rely on that. This doesn't necessarily mean on the downpayment of a mortgage, but also paying college tuition, paying off debt, or really any bailout.
Did you help your children any major way financially? What exactly did you do and how much did you contribute?
Moderator note: Thread moved from Retirement to Personal Finance forum on 03/08/2016.
The book The Millionaire Next Door talked about this. It found most millionaires would partially or completely fund college, but otherwise let their adult kids fend for themselves. They generally found the adult children who got little or no money from their parents were actually much better off financially, on average, than those who got lots of parental cash infusions (other than for college tuition). They called these parental cash infusions "economic outpatient care".
Yes I have. Our parents helped us when we were first starting out, including lending us $10k to get into our first house in 1984. We paid that back in 4 years but couldn't have done it without them.
I have and will continue to help out where needed as long as my adult kids are making good choices and not squandering money away. College for both, and a car to get them where they need to go. The eldest was self supporting for 6 years post college and only recently has needed some financial help due to a career change. My youngest just graduated and still lives at home. He's looking for a job now but he can stay here until he's got something steady.
My college was mostly taken care of by my parents though I have 15k debt to show for it all. I was more fortunate than most to be able to have used my fathers old 1700 sq ft house on half acre lot and his cars, though I was responsible for all repairs, gas, etc. I would have probably been broke had I had to pay rent haha.
Otherwise, I've been on my own. Done very well for myself.
I gave him 2 1/2 acres as a high school graduation present. Other than that, he's done it all on his own. He certainly would have done just as well without the land gift because he is a hard worker with a lot of common sense.
Oh wait..... I taught him a lot about working a budget, about real estae, and about running a business.
Good for you! My daughter and her boyfriend will be finding out over the next several months just how much value there was in my 'cheap' help to them, by providing room, board and free internet.
Thanks! I do want to make an important distinction because I'm reading crazy sums of money that some parents paid for their students' college tuition, mine didn't cover 100%...I had scholarships that covered most of it, I've said 2/3 before but it might've been closer to 3/4 of the tuition costs...so they didn't have to remortgage their house or anything that I'm aware of. But I'm very glad they helped me with that so I didn't have to take it out in loans. I moved out when I was 21 and they haven't had to help me since then...and if they needed my help....I would happily give it. I don't think they'd ever ask me though.
Good for you too, I hope your daughter and her bf find their footing quickly!
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