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The kids keep on taking
By Anita |
I started chuckling right after reading the first sentence of this Money magazine article:
At this point in their lives, Tony Carideo, 57, and his wife Linda, 56, of Bloomington, Minn., thought the financial load of raising their four kids would have become considerably lighter.”
My oldest is 15-years-old so I don’t have first hand knowledge about these matters yet. But I figured that “considerably lighter” was a stretch.
It turns out that the Carideos are in the process of spending $250K on their four kids for their college educations, launching the art gallery of one, rent payments for another and so on. They are doing this on an income of $130K and they have retirement savings of $500K.
Before you start chuckling and think to yourself that you aren’t going to spend that kind of money on your adult kids, consider this:
According to a 2004 University of Michigan study, parents provided about $2,200 a year in aid to children ages 18 to 34; upper-income parents gave more than $4,000 annually. Over the past 30 years, there’s been a 50% increase in the number of adult children living in their parents’ homes - which by itself increased parents’ outlays by nearly 20%.
Still think you are exempt?
All told, a 2007 survey by Ameriprise Financial found about 9 out of 10 parents give money to their grown kids for major expenses: credit-card balances, car insurance, student loans, you name it.
So we’re all going to give our adult kids money, it sounds like.
This begs the obvious question: are Baby Boomers pampering their kids? Or is the price of independence very high now and parents simply have to provide this level of support?
Here is a useful acid test from Eileen Gallo, a psychotherapist who, with her husband Jon, a trust and estate lawyer, co-authored Silver Spoon Kids: How Successful Parents Raise Responsible Children. Consider, she says, “whether giving your kids money will speed them toward independence or prolong dependency.”
That seems reasonable.
What are your thoughts?
Topics: Kids |
February 13th, 2008 at 12:02 am
I think that is totally insane…
It is our jobs as parents to teach and release, not subsidize. I think some of “helping out” can be relative to family income. For example if a dual income family has done well with their savings and investments and can afford to pay for their children’s college - I say BRAVO! But if they have made poor financial decisions and are not preparing for their own retirement, etc. it is idiotic to sacrifice their own financial well-being to send the kids to school. The kids can get student loans, grants, work study, etc. And there are other ways a parent can help during those college age years. I try to help my son’s in little ways… and they know to come to us if they have a significant financial problem to discuss options. But, I’m not a money machine. I always tell them, they will be glad I’m taking care of mine and dad’s future, so they won’t have to take care of us when we get old!
Terrific post… it inspired me to comment, that’s for sure!
February 13th, 2008 at 12:33 am
Thanks for commenting, Dawn. I agree with you. And that’s a good point about telling your kids that they won’t have to take care of you someday if you refrain from being their ATM machine now.