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Plans to help adult children financially? Ideal? Too much?(16 Posts)
DH and I are both from families who were not in a position to help us financially at the start of our adult lives, and we didn't need any help.
We recognise that for our DC to have what we had (no/non significant student debt and able to buy 2 bed starter home age c.24 without maxing out mortgage on good but not exceptional salaries) they will require fairly significant help. Just a sign of the times...
We've done fairly well financially and I am confident we can give them at least that but as first generation at this I am torn over it, even though they are haven't even hit the teen years yet!
What are you planning/hoping to give your adult children when the time comes (hopefully well before you die)? What do you think is too much?
I hope to be able to pay for driving lessons and test and buy them their first car outright, and pay for the first years insurance.
To have enough money to help to support them through college/Uni, without them having to work all the hours under the sun just to get by...I had to work 30 hours a week in the evenings through college and i'm pretty sure it affected how I did.
I also intend on asking them for a decent amount of keep money if they're working full time and living at home, but then saving this and gifting it back to them when they're ready to buy their own house.
Other than that, anything else is a bonus. I hope to support them to a point where they'll be able to manage on their own as fully earning adults.
It's only now i've realised that my intended help is about me though. So i'm now hoping to be flexible enough to help the dc where they need it!
These are the things I would have loved, and would have made my life a lot easier - having a car in my late teens to get from college to work to home. Working a few less evening hours. Having a chunk of money when dh and I got our first house. Times were lean and even £500 would have been a massive, massive help to us at the time!
It's further off for us as the DC are primary age but I don't think you can plan too far ahead for this as you don't know what might change ... if you lose your job, will you still be in the same position? If you or a family member suffers a life changing illness or injury, will you still be in the same position? This is one of the reasons why we don't save specifically for the children as we don't want our money to be tied up in something we can't access.
Another "what if" is how much your view these gifts as yours. One family member is very resentful that, having bought a 2 bed flat in London for her son, he married, divorced after 18mths or so & the wife took half of the assets. An acquaintance lives in a very nice house with her husband & their DC. A large part of the reason they can afford such a nice house is that her first fiancé tragically died in a car crash shortly before the wedding & his will left everything to her. Obviously, she was devastated at the time but met the man she's married to only just over a year later & was married within three years of her fiancé dying. In the meantime, the house she had inherited and which had been paid for by her fiance's parents had doubled in value (London). You may be able to tie the assets up legally so that "gold diggers" don't benefit from your generosity to your children but that might get quite complicated.
Interesting point about your intended help being about what you would've liked MyGiddyUncle. I can relate to the working during college/uni thing - I am pretty sure I would've done better at uni if I didn't have to work so many hours on top too.
My husband is definitely planning on buying the first car and paying for all driving lessons, as for him that is what he would've liked. I'm less bothered about that as I lived in a city up until I started my first professional job so didn't miss not being able to drive until later.
Good point about protecting substantial gifts BoaConstrictor - we would definitely do that. We have saved money in DC's name - but most of the help would come from our own savings pots, for the reasons you mentioned.
Actually, that has helped a lot - thinking of it in two different groups. Outright gifts (like paying uni fees/support, driving lessons and first car, helping to pay for a wedding) and protected help (equity in a house).
probably a good idea to save for them and revalue later on, when they are 16/17/18 and onwards.
Yes NoahVale - I think you are right.
I guess I was after a savings goal of some sort - whether we do it or not.
We've met our initial ones (which when in our twenties seemed like a pot of gold at the end of the rainbow but when realised in our late thirties seem a bit...like we were missing the point of life somehow).
One thing that definitely makes it easier is that we only have one DC - so there is no complex 'keeping it fair' to add in the equation. I would've like four children so I'll cling onto any mild advantage ;)
I think my advice would be to save as much as you can in each adults ISA & make sure you both have a reasonable pension provision.
After that, maybe save into an ISA or such for the DC, but with the bulk of savings in your own names for reasons given earlier.
Ours are older, 16 & 18, but we have managed to save a decent amount in our own ISAs and also some into Isas for them. We part paid for driving lessons for eldest as his 17th birthday & xmas presents (he contributed earlier birthday/xmas money that he had saved), we bought a small car but he insured it from part-time earnings. Without the car, we were having to ferry him to work at weekends and look after my sick mum 70miles away, so it helped us.
He is now at uni, he gets minimum maintenance loan, we give him the top-up to cover hall fees and a decent monthly allowance (not over the top but enough to live on). He has also saved from his wages, so we know he doesn't waste money. We are fortunate that we were in our 30s when we met, married, had kids, so both had careers and houses bought in early 20s. We are thus comfortable enough to help now.
We had also planned to help with money for a house deposit, assuming we didnt have any life changing events, but our DC have recently inherited some money from a cousin of mine, which has now removed that need. We may still give them a bit extra, depends where they end up and how much property is, but that is now more optional.
One thing I would say, is use the time between now and 18 to instil some money values, show them that you are saving and where, encourage them to get a job when old enough, etc. My DS received his inheritence just after he turned 18 last year, it could have been disastrous, but wasn't. He was already careful with money, we had encouraged him to work, save some, spend some, etc. The inheritence has also allowed him to get more involved in his Stocks and Share ISA, choose funds, watch progress etc. Unless he changes completely at uni, I know he will go out into the wider world with some good money sense. We are now instilling similar values in DD.
One last word of advice, how much you help your DC depends only on your wishes and your financial situation. Asking, is it too much, not enough, is like asking how long is a piece of string!! If you can afford it and want to do it, then do it. Ignore any well meaning advise. One of my friends was aghast that we bought DS a car - despite her spending lots on prep school so her DDs could then get into grammar school. I politely told her I could spend my money as I wished, as she did hers.
Yes - we have got our financial house in order - paid off mortgage as soon as we could, good pensions, and save into ISAs etc and we attempt to teach DC about money and its value.
Yes, I appreciate it is a bit how long is a piece of string asking this!
I think I just need a new savings goal and completely detach my thinking about that from the DC (cross all those bridges as we come to them).
We need to rewrite our will so we've decided to take some advice about trusts etc at the same time.
Sounds like you are very financially savvy and organised, as we tend to be.
Don't worry about a specific goal, just save what you want/can, maximising ISAs first (do you do cash or S&S - we do latter, drip fed monthly, range of funds) then worry about what you spend it on later!! Much better position than not having savings, as in many cases.
I know what you mean a little bit when you say 'seem a bit...like we were missing the point of life somehow' but I think as long as you have enough to live on, and have whatever holidays, treats you want, then savings give you a cushion for yours/DC (even GC) future.
You have no idea what could happen in terms of your work, or an illness. One of my uni friends is a widow at 53, after losing her DH to brain tumour. But she has said she doesn't need to work (altho she does) as is very comfortable financially from prudent savings before he got ill.
So, as long as you can live life as you wish now, just save as you can, without having a specific goal.
In terms of wills, make sure you cover who will inherit if you all die together (eg siblings, nieces/nephews etc), also ensure you have someone you trust as executor and guardian. Think about adding a clause for your DC to become a joint executor on 18th birthday, we did that as we re-wrote wills a few months before DSs 18th. He and SIL would also be joint guardians for DD, and DD becomes a joint executor on her 18th. It means they involved from 18 but saves changing wills again in near future.
We see ourselves paying for everything, to include housing, cars and at a later point, even childcare possibly.
We've given our two the gift of older parents. I'm hoping by the time they're in their thirties they will have their full inheritance to split between them 👍
We're saving a bit for our DS but I don't think buying him a house will be an option.
Looking at the kids in my wider family, I wouldn't give anything substantial to a kid that wasn't yet established into part time work. They won't make the connection between work and money until they earn their own.
My dad didn't have a penny to give us when we were young but now twenty years later he loves bunging us a cheque now and then, I see myself more like that.
I'm hoping by the time they're in their thirties they will have their full inheritance to split between them
If it's not used for your care package fees!
I think as long as you treat them equally and don't give more than you can afford you can't go too wrong. We only have one child and aren't planning on having more. She's very young and so far we have a savings account for her that a regular amount goes in each month. My plan is that she can use it towards uni costs or a deposit when she's older. (Hopefully adult dd will agree).
My dp's parents have massively helped out one child but not the rest and it has caused quite a lot of resentment.
Sorry just saw you only have one child! That'll teach me to rtft.
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