Giving kids a down payment
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Anonymous
My thinking is more along the lines that it's going to be theirs eventually, and they may as well reap some of the benefits when we're still around. |
Anonymous
Ditto here, although I'll tweak it to say Idk a single person my age (mid 50s) who had parental help buying a house. But of course, back in the olden days this was possible. I bought a $115k 1BR condo as my first home with a 3% down payment which was pretty easy to save up, even though I was only making $36k/yr. Then saw the latter comment from someone who said they don't know anyone who didn't have parental help. How times change... |
Anonymous
This 1000% Also, not just for you to see/be around, but at a point in your kids life that it makes a bigger difference. $100K (or whatever amount) for a downpayment in your 20s/30s makes a much bigger difference than an estate when your kid is 50+ and you are dead. It means not struggling, living in a good school district (with your grandkids) and possibly having a shorter commute to work so you have a much higher quality of life overall. It means more vacations for them, because their mortgage payment is lower, etc. |
Anonymous
Hey put your binoculars on and see the rest of the country... For most there's not any "it" or a very tiny "it" to be "theirs someday" and no real "estate" with even $100k in it. |
Anonymous
I grew up in the midwest so I understand that. But for many like that, it's about choices. Have a sibling like that, they are a teacher in a state where teachers get paid very well even at entry level, relative to the cost of living. But that sibling has always chosen to live above their means---as in, if you cannot afford it you don't need to own 3 winter coats, and you don't replace a perfectly safe/good car with 75K miles on it because you want a new car---or at least you don't do things like that and then complain "I don't have enough money, and I'm in debt". You also take advantage of your time when you are not at school (think summers for 8-9 weeks) and get a job, if you are in debt. Tutor, teach summer school, anything, once your kids are old enough to not require you home all day (or daycare). This is someone making plenty to live in their area, but somehow manages to spend it all (not much to show for it) and be constantly in debt. And they have plenty of friends who do the same. Life is all about choices. You choose your career path. If you don't like it, then work to find a way to improve it. But in the meantime, you have to live within your means. If you only make, X then you cannot spend more than X, and ideally you need to find a way to save some for retirement. Anything at all. So yes, the economy is not good now, but there are jobs, and a smart person takes any job to pay the bills doesn't waste money they don't have. |
Anonymous
I’m in my 50s. Zero parental help, most of my friends did not get help either. I know one friend whose husband gifted them a large down payment. I saved up for my children’s college, and whatever is left will be their down payment. |
Anonymous
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My partner and I have debated this heavily. Our parents paid for college so we had no loans, but otherwise we had to figure it all out ourselves. Our careers did very well and our (now young) kids would each inherit 10M by default, but that would probably just mess them up really bad. We both know plenty of helpless trust fund babies.
We want to pay for college, but I'm not sure about house down payments. We want our kids to live within their means and have careers of their own. Unless they grow up to be very responsible and successful themselves we plan to just donate our fortune to charity instead of leaving the kids millions. |
Anonymous
Ha, you must be new here! |
Anonymous
We are similar and we realize it's good estate planning to start transferring assets to our kids...but we absolutely refuse to provide money based on a life decision like buying a house or getting married or sending their kids to private school. I will admit that I have feelings about all these things (well...pro-marriage in general if they find the right partner). For example, many of these posts talk about giving kids a down payment when they are in their early 20s. I lived in 5 different places in my 20s, receiving promotions and better jobs along the way...I think it's a huge mistake for a kid in their early 20s to own a place and potentially limit their career progression, so I wouldn't give above-and-beyond what we are currently providing for this. My kids also attended public schools, graduated from top 10 colleges and have great jobs. If they want to send their own kids to private school...have at it, but we didn't make that choice and we live in a city (yeah, application schools...but many cities provide this choice). Which is all to say, I don't get why I would treat one kid who decides to rent (and invest their money) and send their kids to public school differently than another who decides to buy and send their kids to private school. Unless I have reason to believe one of the kids will waste the money on gambling or drugs or whatever (whatever could include deciding to quit their job because they think they no longer have to work), I will transfer money to them as part of wise estate planning and they do what they want with it (and both are quite responsible). |
Anonymous
PSA for people with this mentality....Memory care is $10-12k a month. Don't assume someone in your family won't need it. If you dole out your kid's "inheritance" when THEY need it, YOU might not have it when YOU need it. Learned the hard way - paying for a mortgage on a house we bought with a gifted down payment and end of life care for my mother. |
Anonymous
You can set up trusts to manage how money is distributed. If you raised your kids right, they can be very responsible and successful themselves, while you still assist them along the way with funds to make it easier. Nothing better than living within your means but also having enough to max your ROTH and put $10-15K per year into your 401K when you are 22 and only making $60-70K at your first "out of college job". Do just that (with parental gifts since most people making $60-70K are not saving $20K+ for retirement and living on their own), and your kid is set for retirement. By the time they get married/have kids they won't need to worry about investing much more for retirement and can focus on other parts of life. |
Anonymous
My 26 yo has no desire to own a place yet. It's just them, so a nice 1 bed/1 bath is great. Easier to clean, and if something goes wrong, they just file a maintenance report, authorize access to the apartment and it's fixed before they get home from work. They have a job that requires them to be in the office, so if they want to sit at home for 3-4 hours waiting for a repair person, they have to use "sick day" or one of their precious/limited "work from home days". So instead they invest the money we give them and enjoy not having the headaches of home ownership. By the time they are ready, they will have $200K+ saved for a downpayment (half from themselves). But until then, they don't need the hassles or the being tied down to an area...you earn almost as much if not more investing in the stock market. Sure their rent goes up $25-50/month each year, but the management has added services for that over time. A few years ago they added ultra high speed internet and rent only went up $50, but on their own it was $75/month for "lesser speed internet", so it was a savings. When they decide to settle down and want to own, they will, but until then it's much easier to just rent |
Anonymous
Obviously, don't dole out everything without considering that. I am well aware of those costs, and for us our kids will be getting $10M+ each, after we have paid for any end of life care. So we can afford both. But yes plan for 2-4 years of $15K/month as part of your retirement planning. But once you are 100% set for retirement and LTC, giving to your kids now is definately a better choice, IMO. My kid's life will be changed by putting away $20K+ per year starting at age 22 for retirement, as well as maxing their ROTH since they had any income in HS (we've been matching it). By age 30 they will have enough for $2-3M at age 65 if they never put in anything else (they wont stop). Makes life easier in your 30s+ when you don't have to max retirement all the way until 65. |
Anonymous
Perhaps, but many people don't become wealthy until much later, like in their seventies, after compound interest has really worked its magic, and by then, their kids are in their 40s. My parents, for example, finally sold their business in their 70s and realized they are over the estate limit, so it's time to start gifting a bit. Until now, they weren't sure they had enough to give away. They both want to age in place and hire full-time healthcare aides for end-of-life care, and that's going to be expensive. We never expected anything from them because we didn't think they had that much extra to give. |
Anonymous
so don't gift/give until you are set for yourself. For some that is apparent in their 40s/50s, for others it's much later. Personally, I'd reconsider the "age in place" strategy, and instead get into a CCRC your parents love while healthy. Then you have so much more socially to do, less to manage (for the kids) and guaranteed parents are in the same facility if you can no longer provide care at home. Also, in home can run you $150-200K easily per year, typically much more for 24/7 coverage |