Making Do With Help From Mom And Dad

My parents paid for uni (although it is considerably less expensive in the UK). They also paid for my flights home last year (I live in Canada) because they wanted to see me and I couldn't comfortably afford them at the time. I think partly because my older brother is still living at home, paying very little in rent, they feel they should continue to help me out. Also they make considerably more than I probably ever will based on my occupation
I appreciate knowing they are there if I need them, and always have, but I think for too long I used their generosity, so I'm saying no more often, although I think they'll at least contribute towards my next plane tickets home otherwise they might not see me this year at all.

What you describe comes under the heading of cultural capital. Your parents have social and intellectual advantages as well as buying power that they can and should pass along to their children.

Given the outrageous costs of housing, of automobile insurance (especially for young men), of basic education (a bachelor's degree today is comparable to my generation's high-school diploma), and the low pay most young people can expect to earn, there's really only one way we boomers can hope to see our kids stay in the middle class: that's to continue to help them well into adulthood. Tossing the kids into the icy water to sink or swim may (or may not) have worked for earlier generations, but just now it's not a wise policy.

Assuming your children are reasonably responsible (not doing dope, drinking, spending insanely, or otherwise diving off the deep end), this is not foolish altruism, controlling behavior, or "spoiling" them: it's just common sense.

Wow, there is so much in this post to consider. You certainly could have made this a series!

My parents helped pay a sliver of my total tuition, but the benefit of not having my college education funded is that I worked HARD in school. I went to a school in another state, and knew that if I didn't do well in school and stay above ground financially, I'd have to go back home, which I didn't want to do. I had a LOT of motivation. Close friends of mine who had their college tuition funded by their parents? I don't know that any of them invested the difference. I do know that one of them failed every class one semester and the parents still don't know. It seems like such a waste of the parents' money.

With so many siblings, when we attended weddings growing up, my father would ask us if we liked how nice the wedding was. We'd all nod our heads. Then he'd tell us that we'd probably have to pay for it ourselves. So us kids would be only too pleased to help clean up after the reception. We'd come home with cheesy wedding decorations with our hearts set on using them for our own wedding! My parents did help out a tiny bit with my wedding, but I didn't grow up expecting them to foot the bill, so it was a pleasant surprise.

I think the most important thing that my parents gave me that has lead to my financial success in life is education in personal finance. They taught me well about credit cards before I was old enough to apply. They taught me about building up a good credit report before I even started college. I knew the value of compounding over time. I knew that when I got out of school, I'd have to start saving for retirement.

I was fortunate enough to fall in love with a field that pays pretty well, so I am only too happy to see some siblings get more financial assistance than me. They're hard workers, too, but in fields that don't pay as well, and live in areas with a higher cost of living. I love your advice about helping someone else get started. I am trying to help a sibling who just left the military find a house, and am willing to be a co-signer to help secure a mortgage and get a decent rate.

I don't have any children, but I really wonder how I would approach helping them out financially. I am far better off than my parents were, but I have seen too many examples of children who got too much help from their parents and therefore still don't know how to manage basic finances in their 30's.

I had considered the idea that I had a better grasp of how things worked than some of my peers -- and got much better insight into my middle-class behavior when I lived alongside of those who held hourly positions at factories (my apartment). I seemed to know intuitively that a college degree was nearly essential but didn't guarantee anything; that 2 can live nearly as cheaply a 1; that waiting to buy something was better than buying on credit; that you can outspend any income; you gotta save. It is difficult to measure the contribution of cultural capital (basic knowledge of financial systems) on financial status; it is even trickier to separate the two: the contribution of cash/gifts and financial know-how. My main point is that middle-class children (me, for example) may underestimate the value of our parents' cash/gift contributions. 

As far as weddings, my sisters and I all had non-country club receptions: one at a relative's house; the other two at the church. One was catered; the others my parents catered themselves.   

I will mention though that when I graduated (during a recession) that employers valued experience over talent and knowledge; so new grads nearly always made significantly less than their parents. In my part of the world, the opposite seems true: knowledge of recent grads is valued over experience and new grads often make more than their parents (I have heard this multiple times; also know a woman who mentored a college student, whose starting salary was well over her own pay after years of successful experience in the workforce). But add in high cost of housing and student loan debt, and we may be even -- sure that's open for debate though.  

Before anyone co-signs, I'll mention that the cap on my obligation for the utility bill was $100 and if the cousin didn't pay, I was sure my friend would have paid me back. So, be generous but don't go crazy with the co-sign thing.  

Unfortunately, I had quite the opposite experience. I was raised by a single mom with no help from my biological father. We struggled off and on for years, moving from apartment to rental house, back to apartment. My mom did the best she could, and now that I am a parent I'm not quite sure how she did it.

I took student loans for my first two years of college, and paid my way for the last three (it took me that long because I changed majors). Upon graduation I also started paying back my student loans. My mom still works, so we don't get much help on child care.

Even thought I didn't get much financial support from my mom, I got a ton of life experience on perserverance and work ethic - two things I've used to further my own career. So in many ways, I did benefit from the experience.

My wife had a similar upbringing, and we are determined to break the cycle to provide a slightly softer landing for our kids after graduation.

After my two older sisters had huge very expensive weddings, when I got married in my 30's my dad asked me point blank to do something low key. He admitted while he had the money at the time both weddings really drained their finances. This actually was a huge relief for both of us. I assumed they were going to expect a huge formal event per my sisters, something I had no desire to plan and endure. I was leaning more towards going to the courthouse and having a cocktail party. Huge formal weddings really are not a required thing these days since usually both people are a bit older and have their own lives in contrast to the 50's where few women worked.

As far as college I had to self fund but there were more than willing to give me a place to live and free food, even after they partially retired and had moved into a townhouse.

We can't afford to pay for our kids college. But what we found might work just as well, we are trying to plan our next move to coordinate with our oldest starting college. We can do a lateral transfer via work and move to a larger city, something we really wanted to do anyway. Tuition is a bit lower there to begin with and he can have a free place to stay, again lowering his costs.

I posted on the public assistance blog about public health insurance and my worries about kids who are scarred by the experience. My folks were teenagers when my brother was born. Their parents paid for their undergraduate degrees, bought them cars, paid for childcare.... My parents still live with that safety net and still make foolish financial decisions.

OTOH, as I mentioned, I worked at age 10 to pay for school lunches. I moved out of the house at age 16. I "paid my own way." In fact, when I was 18 my parents couldn't make their car payments, so I took care of it for them. Even so, I've never thought for a second that I didn't have financial help, both tangible and intangible.

In addition to the crappy insurance I buy from the state at a higher rate than the private insurance I used to have, I have a zillion other sources of help.
* Grandparents almost completely clothe my children with overstocks and garage sale items.
* My boss's flextime allowance means I don't pay for childcare.
* Gifts of cash for holidays and special occasions. In fact, all gifts offer some sort of material comfort.
* National Guard status means I can shop tax-free on base and get discounted financial services through USAA.
* Don't publicly funded services count? Schools (my children's, my own, my state college), roads, civil servants, student loans/pell grants...
* My parents essentially threw me to the financial wolves at a young age and so I've been much more money savvy than they have been (though maybe not as savvy as I could have been with instruction).
* Death of parent resulted in modest inheritance.
* First time home owner loan gave me a lower interest rate than others qualified for.
* Learning from friends, trading services (like babysitting) with friends, generous pals have picked up the bill for us at dinner (which we've reciprocated), clothing/toy swaps... in fact, friends have helped me get through a recent health scare when my insurance crapped out (as did a family member who got a doctor to see me for free when my PCP wouldn't see me at all).

I don't believe anyone, not for a second, who thinks they didn't have help getting where they are. There are a thousand ways we get help every day from some source outside our own homes.

@guest "I don't believe anyone, not for a second, who thinks they didn't have help getting where they are. There are a thousand ways we get help every day from some source outside our own homes." Very true though some of the help you have received you have done something for...paid taxes and received services; serve with the National Guard, shop on base, etc.

@johnk: Even middle-class families are having trouble paying for their children's college now; tuition rates have risen dramatically since I was in school. Just as a side note: my dad attended college on the GI Bill and my mom benefited from the generosity of family friends who paid her college bills.

Thanks for the post, it is very interesting to me because my parents have help me financially, and I try to make sense of my feelings about it. My parents always lived frugally and taught my sisters and I about the technical-number-crunching aspects of personal finance, but also about the cultural ideas of mindless consumerism, entrepreneurship, etc.

My parents agreed to pay for my college education, but on one condition. They would pay my tuition only after I graduated with a degree in hand. So, I took out student loans in my name, but on the day after graduation they paid off my student loans w/ no interest. This way, I couldn't screw around campus for 3 years on their dime and amount to nothing. I don't agree that you have to pay for school yourself to get good grades or actually appreciate the experience. For example, I graduated early as a double major even though my parents would have paid for more.

*Luckily my parents did approve of my majors, but if I wanted to major in Art or Sociology per se - they would NOT have paid for anything.

My parents recently gave me money for a down-payment on a condo. They wanted to help me get ahead and I wanted a safe/stable long term place to live instead of bouncing around and signing new leases every year. They wanted me to buy a place more than I wanted to because I knew of the day to day responsibilities of home-ownership. (They are well versed in investment properties. In college, they bought a 3 bedroom house and I was the landlord. It was a huge hassle.) Anyways, because I had lived in the same city for 2 years and found a promising career-related job and was approved for a mortgage, we moved forward. We looked at many properties, waited for the market to cool, and finally closed on a condo. I got a first hand review of the importance of credit, mortgage terms, and how to calculate property taxes, insurance, condo fees. I make the monthly payments now and everything seems to be working out. When/If I want to sell, they will get 40% of the final selling price because their down-payment was 40% of the buying price.