Is Your Money Distinguishable from Your Parents?

A few years ago, an old friend of mine bought a fantastically expensive home, far larger and with higher quality furnishings than the home I live in now. I went to college with him and noted that after college, he worked at a minimum wage job for a year and had only been working at a solid salary for a little over a year when making this purchase.

“How could he afford it?” I wondered. So I asked him about it. He just grinned and said that he had a big bankroll.

For a long time, I figured that he had either done something illegal or something like that to earn the money. Eventually, though, I learned that his parents bought the house for him.

Today, this old friend of mine doesn’t have time to spend with me. Even though he’s only making about $26,000 a year (at my best estimate), he drives a Lexus and is constantly buying all kinds of different things. He spends most of his time with similar big spenders – and that’s not a group I’m a part of.

What I find most interesting, though, is his assumption that his parents’ lifetime earnings are his to spend however he likes.

For some people, this could be a happy arrangement. As a parent, I can understand the desire to want to make life easier for my children – to make sure they’re content, have social stature, and have the possessions they want and need. I can also understand, on some level, how it would be nice to simply have all of the things that I want without having to be responsible for earning them.

The problem is that the solution isn’t permanent – and when it fails, everyone suffers greatly.

In this situation, the parents are getting older and, at the same time, their financial resources are being slowly drained. Unless they are prodigous accumulators of wealth, there’s going to come a point where it will become difficult to make ends meet – and that point will come when it’s more difficult than before to earn money. When they reach the age that they’ll actually need their savings and investments, they may find that they’ve been whittled away.

On the other hand, when the support of the parents disappears, the child will be stuck without having learned how to live within his means. In fact, the child’s standard of life is so far beyind his/her means that, unless the child is very, very aware and centered, their life will enter a very difficult period, laden with debts and some incredibly difficult lifestyle changes. This disruption will alter almost every element of their life – and many of those elements will involve a serious downgrade.

If you find yourself in a situation like this, the best thing you can do is to begin the process of distinguishing and separating the finances of the parent and the child. It is far better to do it slowly, surely, and together than to do it abruptly, shockingly, and without personal support.

This way, the child will be able to stand on their own two feet financially and the parents will have the resources they need as they reach their later years (and, hopefully, have enough resources to truly enjoy those later years).

A final note: I’ve witnessed again and again that people who choose a $20,000 career believe (or pretend to believe) that they can live like they have an $80,000 career. A $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career – but it’s not financially fulfilling. Life is full of gives and takes – your career choice is just one of them.

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  1. Johanna says:

    Holy missing apostrophe, Batman!

  2. Cathy says:

    This guys parents’ have completely failed him. They should have taught him how to live life standing on his own two feet. Now he is an adult dependent.

  3. Laura in Seattle says:

    I believe Johanna is trying to say that she thinks your title should read “Is Your Money Distinguishable From Your Parents’?”

    However, she had inadvertently pointed out a layer of meaning in this post that you didn’t thoroughly touch on – that people like this often have no real relationship with their parents. Their calls or visits coincide with the need for a check or the desire for a present. They see their parents AS money – and see money as the thing that sustains them, maintains their lifestyle, and fulfills their needs – all things a parent does at the beginning of one’s life. (And should NOT continue to do until the end of one’s life.) So Trent, I think your title is right on – exactly as it is!

  4. Molly says:

    I’m one of 4 kids. There’s no way my parents could afford to “help” all 4 of us like this guy’s parents do, even if they wanted to! One of the things I am most proud of is my ability (with my partner) to take care of ourselves financially. Most of our friends have gotten help from parents with car/home purchases; we haven’t. We’ve purchased a car on our own, and we’re quite on the way to saving enough to purchase a home. That’s financial independence. And it’s fantastic.

  5. Kevin says:

    “A $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career…”

    HUH? How can you possibly make this assumption?

    What’s the basis for this statement?

  6. Daniel says:

    I think that parents should let their kids live their own lives starting with when they can first start supporting themselves. When I went off to college, my spending money came from summer jobs and school was paid for by loans (along with a generous gift from them that I did not realize the magnitude of when I was 18 but am now extremely grateful for.)

    I stopped using their credit card and relying on them for financial help. If I didn’t have enough money, I couldn’t spend on extravagant gifts, but being a college kid is about eating pasta and cereal for every meal. If they had kept throwing money at me, I’m sure I would have made some different choices and not turned out to be the person I am today.

  7. Chelsea says:

    I think situations like this are strange. I always wanted to be financially independent from my parents. Granted they couldn’t afford to buy me fancy cars or a house, but I always wanted to have my own money to spend however I wanted. It makes you wonder what kind of strings are attached to gifts like that…

  8. Jen says:

    I agree with Kevin. That is quite an assumption.
    However that doesn’t really have anything to do with the post itself.

    I have been on the other side of this, I guess, as a spouse of someone whose home was purchased for them. Other that that one thing (which happened before we were married) we do everything else on our own. We have purchased our own cars etc. However, the fact that they are still paying for our home gets constantly thrown in my face in just about any argument we have. At first, I thought it was great that we had a house just starting out, but sometimes I wish it had not been that way.

  9. Leslie says:

    Kevin – I was just about to ask the same question. I am pretty sure that not all people that make $20,000 are in personally and spiritually fulfilling careers (or even a majority of them)and not everyone making $80,000 is in a career that is soul sucking. I understand the point Trent is trying to make about how the choices that people make about careers lead to compromises in other areas (financial etc.). However, the statement itself is more than a little crazy.

    The broader theme of the article (parental support of adult children) is one of my father’s pet peeves. My parents are 70 and many of their friends seem to be supporting their adult children. Either they give them money now or they have written their wills in such a way that their financially responsible children will get nothing when the parents die because that money “needs” to go to the financially irresponsible child or children. I believe it was the “Millionaire Next Door” that called this something like financial life support.

  10. Leslie says:

    Kevin – I was just about to ask the same question. I am pretty sure that not all people that make $20,000 are in personally and spiritually fulfilling careers (or even a majority of them)and not everyone making $80,000 is in a career that is soul sucking. I understand the point Trent is trying to make about how the choices that people make about careers lead to compromises in other areas (financial etc.). However, the statement itself is more than a little crazy.

    The broader theme of the article (parental support of adult children) is one of my father’s pet peeves. My parents are 70 and many of their friends seem to be supporting their adult children. Either they give them money now or they have written their wills in such a way that their financially responsible children will get nothing when the parents die because that money “needs” to go to the financially irresponsible child or children. He can really work himself up into a rant when he gets to talking about his friends and neighbors that are in serious financial trouble because they have been supporting grown children for years.

  11. Vicky says:

    Having grown up dirt poor – I mean, eating out of a soup kitchen-free school food was the best meal of the day poor, I know the value of a dollar.

    My mom lives in a falling apart house and drives a $300 car, and it too, is falling apart.

    She has no money to give me. Instead, I learned from her mistakes – I did not have a child at 15, I did not become heavily involved with drugs and alcohol, and I do not rely on a man to take care of me.

    I drive a paid off car, have a roof over my head that I can afford, clothes on my back, and food in my belly.

    The only real benefit of this is that when you’ve reached a point in your life that you have to shower at school and wipe your bum with a telephone book – everything is an improvement!

  12. Adam says:

    Yikes, if I had a $20,000 career I’d have a very spiritual time trying to keep my hunger away and the lights on, never mind survive a cold winter.

    I love articles like this because it makes me feel like I’m completely backwards in the world. I’m 33, and my parents borrow large sums of money from me a few times a year. Sometimes they pay it back, other times its forgiven as part of Xmas or Birthday presents from me to them.

    Suze Orman says that kids giving money to parents is okay, but not to siblings. I know everyone says not to give money to family/friends, but when its your mother asking its hard.

    I would only give money to my kids to keep them out of harm (groceries, utilities, rent). Never a Lexus or a big house, that’s just awful (to me).

  13. Jessie says:

    My husband and I have discussed this very topic recently since we’re currently anticipating the arrival of our first child. We both agree that the best gift we can give to our children is to remain debt-free through college. Past that, we really don’t intend to give them money into adulthood. Inheritances are great, but I think they should only come after the recipient has lived a long life and learned how to provide for him/herself.

  14. chacha1 says:

    I have received financial help from my parents in several ways: free lodging for the first three years of college; funding for a summer abroad; rent for a senior-year apartment; a new car of my choice at graduation (my choice being a Honda CRX, very practical of me!); occasional gifts since graduation. My sister on the other hand was a re-nester for a time, received a small down-payment for her house, and has received many more “gifts,” including help with cars, over the years. To me it’s a function of continued parental responsibility … to what extent do you need help, and to what extent can they give it? Every family’s solution is different.

  15. KC says:

    My experience with “big bankrolls” is that the bank roll isn’t as big as the kid assumes it is. I have friends who live off mom and dad and frankly m & d aren’t that well off. They might have a nice home paid for and a decent retirement, but all told they have less than a million. Now that may sound like a lot of money, but if the parents are still living and the kid is spending like a drunken sailor that money is going to disappear before the kid is ready to go.

    Now if your parents truly are rich ($5+ million) then maybe you can live it up a little bit. I do actually have a few friends that fall in this category, but they are pretty good kids. One has her PhD and is a college professor – she’ll never be rich on her own, but she has a good, prestigious job. The others are doctors, lawyers, and business professionals, who likely will have serious money of their own regardless of m&d’s bankroll.

    After all, money begets money. Truly rich people teach their children how to be rich and continue on the family legacy. That doesn’t mean the kid always has a high paying job, but it usually comes with some practical money lessons on how to stay wealthy even if you aren’t adding that much to the pot.

  16. Sara A. says:

    I have kind of a counterpoint to that. My aunt has had a disability since she was a child. She has been able to take odd jobs and certain non-demanding part time jobs, but has not had nearly the work opportunities she would have had without her disability. Recently, my 80 yr old grandfather bought a house with her cash from his retirement money. He was concerned for her and wanted to make sure she had a roof over her head after he passes. Her brother (my father) cried foul that she should get such an expensive gift and he didn’t. I, however, think that this is an appropriate situation for a parent to be supporting a child this way.

  17. Meg says:

    You say that “the problem is the solution isn’t permanent” – but that’s not always the case.

    “My parents bought it for me” is a general statement that can mean a lot of different things. Sure sometimes parents simply buy cars/homes/college degrees for their kids. These are pretty much “one time” deals that can be good or bad for the kids depending on a lot of factors.

    But sometimes there is a different, more permanent situation in place. Many people don’t want to (or don’t even know how to) get into the specifics of the trust that benefits them, the family limited partnership they own part of, or the inheritance they got.

    You just know about their salary, but there may very well be a “permanent” wealth solution in place for your friend.

    Of course whether or not kids should be handed all the finer things in life is another argument. But in wealthy families sometimes the truth is you really don’t have to earn it – there’s enough to go around and you can choose to work or not, or to work for a lot of money or not.

  18. Eric says:

    Does that mean the guy mentioned in the story doesn’t pay the mortgage either? So his parents pay two mortgages?

  19. Courtney says:

    Add me to the list of those who are wondering how you can possibly assume that a $20,000 career is more likely to be fulfilling than an $80,000 career.

  20. Patty says:

    I think there is a saying that it takes a generation to make it, a generation to keep it and a generation to waste it. Rinse and repeat. Hopefully the current times will remind the current and upcoming generations to make it and keep it and we can change the cycle.

  21. Jennifer says:

    I have an answer for those who wonder how a $20,000 job can be more fulfilling than an $80,000 one – the non-profit sector. I can totally see how it can be much more fulfilling to work with the intellectually disabled or street kids than to be a lawyer defending known criminals (making much more than 80K, I know). There are people who have a real heart for the disadvantaged in society, and changing jobs just to make more money may not appeal to them.

    That said, I take a bit of issue with the statement that “people who choose a $20,000 career believe (or pretend to believe) that they can live like they have an $80,000 career.” I make more than $20,000 but not yet $30,000 and I don’t behave like I have money coming out of my butt. I try to be reasonable in my living, and I have a small house that is within my means. From time to time, my parents have offered to help me out with certain things along the way. I have often said no, but have accepted when in real need. I certainly don’t treat them like an endless bank account and think that people who rely on their parents for constant handouts are just spoiled children in a grownup body

  22. I honestly hate people like this. I find it funny, because I was just talking about this the other day… Only in reference to the punks in high school that act like the money their parents make makes them somehow better than those who have poorer parents.

    For me, if you don’t make the money I don’t care what you have, you can’t afford it. Period. And anyone who expects me to be jealous over their stupidity of buying things they cannot afford is out of their mind. I work hard to have what I have, and nobody came and just handed it to me. I wouldn’t ever dream of asking for help from anyone, let alone my parents. They raised me to be independent, and the best thing I can do for them is to show them they did right by me.

  23. Courtney says:

    @Jennifer

    I can understand how certain low-paying jobs may be more satisfying than other higher-paying ones. I just think it’s pretty silly to make a broad statement, as Trent did, that “a $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career”.

  24. J.D. Roth says:

    Trent, you’re killing me with your title. You need an apostrophe after “parents”. As it reads now, you’re asking if my money looks like my parents, which is pretty hilarious, but not what you mean. :)

    (I’ve had some pretty lame typos of my own lately.)

  25. Jennifer says:

    @Courtney

    Just as I find it silly to make a broad statement, as Trent did that “people who choose a $20,000 career believe (or pretend to believe) that they can live like they have an $80,000 career.” :) I don’t know any people making $20,000 who drive new cars, take expensive vacations or buy the latest electronic toys. They’re struggling to pay the rent and utilities, buy decent groceries, and in most cases, are searching for better-paying jobs.

  26. kristine says:

    That “final note” was a nuclear bomb of controversial distraction from your point, which was otherwise good.

    “a $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career”.

    Wow. I’ll bet a survey of earners of 20K annually would reveal a rather small percentage of NFP employees who felt spiritually fulfilled by their jobs. But then again, few people have the “choice” between a 20K or 80K job.

    And it may be your experience that many people who earn 20K live like they earn 80K… but I’d like to know if fiscal irresponsibility has a proven positive correlation to low income.

  27. Ashley says:

    Yikes, Trent…you really stepped into it today!

    Although I like the “lesson” of this post (to stand on one’s two feet and not depend on the folks) you made some assumptions that ruffled feathers.

    Of course, the spiritual benefit of $20K vs $80K…I think you got the verdict to that remark pretty loud and clear from the previous comments.

    But it has been my observation that those that earn less (the 20K crowd per your example) are far more responsible with their finances than their 80K counterparts. I’ll offer myself up as an example:

    My husband and I earn a combined income of $32K. We bought our property back in the early 1990′s when we had to come up with the full 20% down, verify our income, submit three years of tax returns, dress appropriately to meet the banker, etc. I recall having $300.00 outstanding debt on a credit card at that time, and was told our mortgage application would be denied unless that got cleared up. And our housing costs (mortgage, homeowner’s insurance, and property taxes) were never to exceed 28% of our annual income. Very stringent, but I’m so very grateful for the process.

    We purchased a tiny cottage on 16 acres in Western, MA. Our outstanding mortgage is now $14,500.00 and we expect it to paid off in three more years.

    Now…I have many, many friends that earn more than $100K/year, and their debt-load is STAGGERING. They are the ones who tended to live beyond their means. Their lifestyles expanded with their salaries, and they are the ones really ill-equipped to deal with this recession.

    Just my experience and observation. Living on less has made me more self-sufficient.

  28. Troy says:

    Not sure I understand the real issue.

    Lots of people live off their parents in some way to some degree. Nepotism is rampant in this country. It is the norm actually.

    Kids working with parents. Taking over the family business. Going into the same line of work. People getting money, positions, hired, enrolled, etc because of their parents.

    It is a commonality that extends back generations.

    Self Made is the minority. We happen to be in the minority.

    But really…who cares about this guy, or how he got his house or cars or how he cashflows, etc.

    Things have a way of balancing out, so relax about the MIG.

  29. JB says:

    What a timely post. I have a friend and while I don’t know how much money she makes, it must be between 45-55k. Yet she spends like someone who makes at least 100k and doesn’t save a penny because her parents subsidize her lifestyle. I honestly think they are okay with it.

    When does it end though? Everytime she gets a higher paying job she will feel entitled to nicer stuff, but it’s not really the case since she is already living beyond her means.

    Setting this precedent with adults kids means the parents will most likely have to do it forever, because they are enabling them and not letting them find their own way.

  30. Ken says:

    My parents were both blue collar workers that worked hard for minimal wages. They never game me anything because they didn’t have it to give. I was able to get a college degree that they wanted me to achieve. They modeled hard work for me. My mom did save a small part of her earnings. I’m glad to say that I am able to do the same.

  31. Michele says:

    Well, I AM one of the ones who gave up an $80,000 a year job to take a less than $20,000 a year job. I work for a Church, and it is equally frustrating and stressful (sometimes more so) than the $80,000 a year job, but I would not trade it for the world. It IS spiritually fulfilling and I do feel as if I am making a difference, and fortunately, I also can help support my son in college, because my husband and I promised to do so. Trent, you did say in an earlier post that education for children is the best way to give them a leg up, and my husband and I agree with that…so we are putting our money where our mouth is. My entire salary goes to help pay tuition, medical insurance, car insurance, housing and food for my college kid…and he has a part-time, 30 hour a week job to help suppliment that. Yes, we bought him an energy efficient new vehicle to get around, but it’s worth it to know he is driving a safe vehicle in So Cal when we are so far away in Oregon. Everyone makes choices and deals with the consequences!

  32. Henry says:

    @ #3 Laura in Seattle

    I don’t think so. When you look at someone’s parents, you’ll have no trouble identifying them as people, not money. So no, that apostrophe defense of yours is quite the strech.

    There is a great blog called ‘Apostrophe Abuse,’ several of these posts would be great fodder over there!

    A $20,000 career is more satisfying than an $80,000 career? You mean a ‘career’ at the Wal-mart or one wiping butts in a nursing home bring more satisfaction than one where you probably work in an office, don’t get dirty, have plenty of benefits, the ability to miss a lot of work as long as it’s made up later, go out for leisurely lunches, being treated respectfully instead of constantly being accused of lying about one thing or the other, and the like is not satisfying?
    Yes, I know everyone that wipes butts at the nursing home, abused by patients and superiors, not able to take a day off without intense consequences (write-ups and threats of termination) to tend to their families, no insurance because what it would cover isn’t worth the money, that’s really satisfying. To top it off you can’t get state assistance on health care because you turned down the worthless insurance offered at work. What a great scheme industry and government have on that one. They struggle to keep the utilities on and the rent paid, and then they’re slammed with December where they are still behind on the bills and then the kids all expect a great Christmas. Yes, that $20,000 a year is just so satisfying.

  33. lurker carl says:

    I don’t know anyone who supports their adult children in such an outrageous fashion. There seem to be a lot of assumptions and speculations with this story. But we do know folks with couch potato offspring that refuse to work and live like roaches with Mommy and Daddy.

    In my experience, most folks making $20,000 per year have jobs while the ones making $80,000 per year have careers. A job may lead to a career but $20K is hovering just above minimum wage.

  34. Henry says:

    And, come to think of it, I’m glad these kids are spending Mom and Dad’s money. If they didn’t spend it, Mom and Dad would probably be hoarding it. At least this way a stream of cash is pumping into the economy. Besides, little Johnny Freeloader would wind up inheriting a lump sum plus the lumps of cash from liquidating the estate, and would probably be tempted to either go on an orgy of spending on drugs and booze, or buy something big like property or an expensive car, and that doesn’t really help me out unless I’m a car dealer or own the property that they want. So I’m glad these kids are out there, keeping the money moving.

  35. gexx says:

    Wow. My parents help me out, but I’m in grad school. And they only help me with some rather serious things, like dental work (my very generous xmas gift!) or when my heating at my place died.

    But… it’s up to his parents how they spend their money. While I find myself too proud to take their money to this extent, if they want to buy their kid a house it’s up to them. Like my grandfather has worked really hard through his life and had decided to not worry about having anything left for his will, so he’s flying us family members everywhere to go on trips with him and treating us to things that I could no way afford myself because he wants to do all these things *with him*.

    So, personally, I couldn’t handle doing this myself, but it’s up to the parents. Hopefully the person realizes that this might not always happen and can support himself when it all crashes and burns.

  36. chris cruz says:

    Being an only child I can relate to this. My parents will give me money any time I ask but I never ask. Sometimes they even force me to take money from them. I’m fortunate to have them if I REALLY need help but I’ll always feel like there’s strings attached if I take money. I have a couple of friends that I grew up with that fit in this category. Their parents are doctors and are friends with all doctors so they pretty much have connections to anything. They’re all in their mid-late 20′s and have nothing to show for themselves but live like they’re doctors driving bmw’s, paying for expensive dinners, and have all the latest gadgets. To me all those things are materialistic and will deteriorate in time.

  37. Ryan says:

    @Laura in Seattle

    I love this point!

    @J.D.

    I have a feeling Trent wrote the title like that on purpose…

    I find it really clever.

  38. getagrip says:

    I have seen that in many families, one or two children are often considered the “helpless one(s)” who need more. This happens regardless of the parents assests or income. The Millionaire Next Door does a good job of describing the results of this economic outpatient care and why you should avoid it.

    As one of my parents’ children who didn’t need the help I have to say there is resentment having watched a sibling siphon what should have been my mothers’ income for later in life, to the point where living on nothing but social security she took out a home equity loan on her home to pay for the property taxes and interest on the siblings house before the county foreclosed. So while I resent that this happened for the pain it caused my mother, who’s to blame? My sibling for being raised to be dependent and has come to expect to always get bailed out no matter what insane choice they make, or the parent who never lets the child fail or face the consequences of their choices?

    I vote both, but I’ve still got kids to raise and the jury is still out as to whether I eat crow on this one or not.

  39. Henry says:

    Yes, #38, I’ve seen in almost every family with three or more kids (usually the youngest) is a constant siphon on the parents. And yes, that child is usually resented by the siblings. The siphons I’ve seen get the help because the parents can afford to hand it out, so they’re not really in danger of being broke in old age. So the resentment isn’t from endangering the parents’ economic stability, but rather that everytime the sibling gets help, they feel a little bit of their inheritance disappearing. That’s not exactly right of them to have that sense of entitlement to an inheritance either, so they’re not exactly shining examples of morality.

  40. Tracy says:

    One of my sisters has never really gotten over the idea of having our mother bail her out. She is 52. The rest of us have been completely self sustaining since we were in our late teens. I am not sure why she is the way she is, she makes a decent living, but being somewhat dependent on our mom seems to comfort her and my mom allows it, so I don’t interfere. It doesn’t make sense to me though.

  41. Shevy says:

    I was right there with you (missing apostrophe notwithstanding) until you said:

    “A $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career – but it’s not financially fulfilling.”

    My mind boggles at that statement — and I work for a non-profit!

  42. Rachel says:

    My husband and I both got married young (20 and 22), and lived at home until then. I saw a few friends getting married and being bought a house jointly by both sets of parents. Ours could surely have afforded to, but it wasn’t brought up, and we have been renting for 8 years now.
    All this time, it doesn’t seem wrong that our parents hadn’t bought us a place, and didn’t really bother me that friends’ parents had. What irked me all the way was that they didn’t seem to think it was a big thing, they were taking it for granted. One is now planning to move somewhere bigger, whilst she’s in college, her husband has an unstable job, 2 young kids, and their parents will be “helping” again (they’ve now been married 6 years)
    Now, with two young children, my husband and I are starting to look at buying a place. As soon as we mentioned this, my parents presented us with a fat check to be put towards the downpayment (part of an inheritance from my grandmother, that they wanted to be sure wouldn’t be frittered away), and my husband’s said that they also had some money intended for that for each of their children, and we should bear it in mind when looking at property.
    I know that many couples save up and buy property without any help from anywhere, but I also think that our situation is a lot less problematic than that of our friends’ – we have “slummed” it for 8 years, finding out what we can and can’t do on our own salaries, and now we appreciate these gifts as tremendous gifts, rather than sliding from the living at home mindset straight into a parents will provide mindset.

  43. Lenore says:

    Know what I found interesting about this story? (Aside from the apostrophe debate and weird assertion that $20K beats $80K. I worked at a non-profit for $30K, and it mostly sucked.) Trent’s friend must be ashamed on some level because he wouldn’t admit how his house was paid for. Perhaps he thought the question was out of line, but I doubt it since most of us tend to be pretty relaxed and upfront with college buddies. At least you know he’s not an assassin or drug dealer, Trent. I suppose I wouldn’t be angry if my parents bought me a house, but I could never accept it unless they had a mansion and mountains of cash for themselves.

    In case anyone cares or is bored enough to read just about anything, it’s 4:30 a.m. and I have a dental appointment at 8:30 that I’m dreading. I have to get 6 fillings, and I’ve only had one cavity in my life before these. Soda really does rot your teeth, and fluoride is your friend! My boyfriend keeps making drill noises because he’s such a sensitive guy. I guess I should go to bed…again.

  44. kirstie says:

    I think the worst thing about this kind of arrangement is that it is often based on an illusion. The grown-up child thinks they are surviving well on a low salary and, as noted in the post, fails to take into account how much more money they would have to earn to maintain their lifestyle if they couldn’t take advantage of tax free hand-outs.

    Parents maintain the illusion that money grows on trees by remortgaging and spending savings. People talk about poverty being passed down from generation to generation, but there is an upper class equivalent where families assume that there will always be more money to inherit and that they will never have to make difficult choices to earn a living.

    In this context I agree with Trent’s $20K/$80K comment. There are quite a few career choices that you are only able to make if you have somebody else there to ensure that there is food on the table, whether that is a high earning spouse or bountiful parents.

  45. Maureen says:

    I see this situation every day. My sister lives with my mother, doesn’t work, and suck the life and money from my mother. She claims to pay my mother rent, but $400. a month on a $1200. a month mortgage plus utilities isn’t going to cut it when mommy dies. She’s in for a rude awakening. And you know what? I could give a rats ass. She isn’t going to be living with me or my other siblings when my mother dies and I kick her out of the house to sell it.

    On another note, this article is about people living beyond their means and relying on other people to pay their short comings. That’s why there are so many forclosures around and credit card debt, etc. If people would have been told “no” when they went for the $300,000. mortgage, I’m sure the country would be in better shape than it is now. I’m sick of paying for people to sit on the butts all day collecting checks or people living beyond their means and getting the government to “forgive” their debt. Grow up!!

  46. Peggy says:

    Schools aren’t teaching financial education anymore, and if parents don’t pick up the slack, we can expect to be footing the bill for a while. We need to educate kids about financial matters while they are young, expect them to contribute to the family’s income when they are able, and lovingly shove them out of the nest when it’s time.

  47. T'Pol says:

    Leslie wrote:”Either they give them money now or they have written their wills in such a way that their financially responsible children will get nothing when the parents die because that money “needs” to go to the financially irresponsible child or children”. In my country that cannot happen. It is required by law that when a parent passes away, her/his children receive equal parts of the inheritance. If real estate is involved, any of the kids may ask everything to be all sold and shared equally if they cannot reach an agreement as to which part of the estate goes to which sibling. Sometimes parents try to favor one child while they are still alive but even that can be challenged and frequently we see such news on the papers and TV. A person however, may choose to leave parts or all of her/his belongings to a charity. In that case, she/he needs to make arrangements prior to death so that there are legal documents drawn up to make sure she/he took that decision while still sane.

  48. kristine says:

    Maureen,

    LOL. Where I live in NY, a 300,000 mortgage would barely get you a garage! Housing is astronomical, even with the downturn. We’ll be out of here soon.

    But I agree with your point!

  49. annk says:

    PLEASE take time to proofread before posting! A writer who can’t use the basic tools of the language isn’t much of a writer!

  50. getagrip says:

    With respect to Henry’s point in #39, I would state that most of the people I personally know who resent their siblings are not looking at inheriting anything of significance from their parents. I’d have no problem if my mother spent all her money treating herself to nice vacations, better living conditions (e.g. a new furnace or AC for the home or a custom bathtub to help her arthritis), etc. Instead I get to watch someone repeatedly making stupid choices, making lame excuses, and other than some BS yelling and empty threatening occuring, never having to face consequences as they get bailed out yet again. I’ll admit, there is a fairness component to this that goes back to childhood, but to watch and to see that “helpless” sibling seemingly not only not care they are potentially paupering their parent but taking pains to ensure they are still going to get “what’s theirs”, is a part of what causes my resentment.

    Yet in my view there is ultimately a stronger cause for resentment, and based on my discussions with others who are in similar situations, this is their primary reason. If the parent starts hurting for money (as is my case), what happens is that any money provided by other siblings to the parent, any bills paid to help out, in essence anything done that frees up more of the parents’ money, gets siphoned off to support the “helpless” sibling. Not only that, but the parent puts pressure on the family to fill the role they can no longer fill.
    So while my mother can do what she wants with her money (hence why I am still on speaking terms with my sibling), I truly resent that I can do nothing financially for my mother which doesn’t turn into “my” funding of my sibling’s poor choices.

    Finally, what happens when the parent dies even if you never had to help the parent financially. The helpless sibling either grows up, goes bankrupt, or more often than not, expects and demands you fill in the gap. Telling them you won’t doesn’t work. They heard it dozens if not hundreds of times from the parents, but they still got bailed out. So I also resent that there is high probability I will be required to do my parents’ job and force my sibling to grow up should I be approached for financial aid.

  51. Ellen says:

    Ditto all the above – I like the basic point of adults getting real about their finances, and you got off track there at the end.

  52. After seeing the $20/$80K controversy erupt in these comments, I wonder if Trent is unconsciously making the same assumption (which he has *consciously* stepped back from in past posts) that I also tend to make unconsciously: that people are just like him/me, i.e. professionals with the education and general means to choose a profession.

    In that world of education and means, I think his statement has a lot of validity: many people feel like they have to choose between a good salary (engineers, investment bankers, lawyers, etc as possible – but not guaranteed – good salaries) and a job about which they may be passionate (teacher, NGO/non-profit, entrepreneur). I know because my husband, several friends, and several of his coworkers are all stuck in the same argument between trading a good salary for a good job, and maybe not hating life so much but being scared about making ends meet.

    The thing is that this is a funny and bizarre unconscious assumption for both of us to make – as he currently is Mr. Frugal with the blog as proof, and before my current good job, I spent a decade scraping the bottom of the barrel, job-wise, and sweating blood over rent money. Ha, the spotlight that assumptions shine on our own internal inconsistencies!

  53. triLcat says:

    I read a blog about economics in the Orthodox Jewish community called Orthonomics, and her argument about parental help is that one-time starters and “boosts” are ok, but regular help that people grow to rely upon is a real problem. Thus, parents who help their kids through college and/or give money towards a first car/first house are probably helping their kids, but those who are creating a reliance situation are probably not doing their kids any favors as that kind of help all too often comes at the expense of learning to live independently, learning frugality, and the parents’ own retirement.

    On the other hand, I don’t think there’s anything wrong with a parent who sees that their child is living frugally out of necessity and chooses to buy their adult offspring a nice outfit or a nice meal here and there that they couldn’t afford on their own budget – as long as the parents aren’t doing damage to their budget to give these gifts.

  54. Evita says:

    Trent is living is his own little world, not ours. He left a high-paying, unfulfilling career for a low-paying, fullfilling one. This is why he can write “A $20,000 career is likely to be much more personally and spiritually fulfilling than an $80,000 career”. Likely for YOU, Trent, not the rest of us. Just ask around.

    Oh, I so hate it when you state “truths” that aren’t and that spoil the rest of your post!

  55. Amateur says:

    I think Trent is stating that personally, his new lower paying position is very much more satisfying than his old one. He is able to achieve this because he has an understanding spouse who does keep a job with a decent salary and good benefits to keep this going. He also has a spouse who is committed in making this arrangement work. I do not think if Trent were single and even without a child or two, 20k a year with stingy benefits would be very satisfying with some student loans and some credit card debt from basics like snow tires. If he changed the wording to reflect himself more, the post would have been a bit better.

  56. Henry says:

    @#50 Personally, the adults I know who have dependent siblings have money, and have the sickness of wanting and needing more money. They can have $100,000 or more in the bank, more money rolling in and doing their Christmas shopping at the Goodwill, but they have a thirst for more money.
    They treat their siblings with contempt, or outright hatred. They salivate thinking about what’s in their parents’ bank accounts. I know people like this with parents that are alive, and those that have died. They fight over every last penny from the estates, even though the whole worth may only be a fraction of the kid’s worth. Yet they fight and fight, charging the highest executor’s fees they can get away with and then label every item in the house with the excuse that “Mom wanted me to have this” that they can get away with.
    This greed is a sickness among adult children, and why? Are they competing to see who can die with the biggest bank account? Are they trying to keep their parents’ money out of their siblings’ hands so they can give their own children a free ride? This all boils down to jealousy.
    The money will trickle down eventually, either before or after death. If the child would take the money and act recklessly with it while a parent is alive and forking it over, they will act even more recklessly with it after the parent has bequeathed the money.

  57. Lily says:

    Great topic.

    My kids (25 & 26) have been leaches. I earned $40-80/hr and let my retired husband run the finances. There was almost NEVER any extra $ unless I worked extra. I LOATHED my $120,000 a year job – I mean LOATHED! But I felt stuck.

    So last year I finally took control over my $ and realized the vast majority of MY hard-earned $ was going to the kids. Husband would give incredible amounts to them and they would say “thank you” to HIM.

    Four months ago I made a dramatic change. I quit my job and decided to live off my husband’s two retirements, and told him to give me all his money so that I can manage it. His combined income grosses almost $50,000, plus a job that he loves landed in his lap for an additional $1000/month. Already we have more in the bank than ever. I have him on a very tight leash. He has been cooperative and is impressed with what I’ve accomplished. He said I should have been running the finances all along (we’ve been married 28 years). The reality is that my job was so demanding that it literally sucked the life out of me and I had no time or energy to deal with bills. He’s a smart, stand-up guy, so I trusted him.

    He says that now, when the kids come to him for $, he is gratified to tell them, “I have nothing – your mom has it all.” I am keeping a tally of what each of those little life-drainers owes us. And I lecture them relentlessly when they ask for $. Now they rarely ask. I even told them their only x-mas gift would be a nice dinner.

    My daughter accidentally sent me a text intended for her father where she even called me a derrogatory name. LOL! Both kids are experiencing $ withdrawals and I like it.

    There is nothing I wouldn’t do for my kids, but enabling does not equal love.

    I’m 48 and have earned over $100,000 a year for the last 6 years and today I have nothing of tangible monetary value. Now I know it’s because my husband managed poorly and gave so much to the kids.

    I know that eventually I’ll get another job. But just getting this family on track financially has been a full-time job – but a satisfying one.

    Therefore, in MY case, I would say that earning NOTHING has been more fulfilling than earning $120,000 a year.

    Before quitting my job I studied Trent’s blog carefully and it has helped me say focused and be successful!

    Thanks Trent: YOU THE MAN!

  58. Henry says:

    Oh, #49 – annk I agree about proofreading before publishing. Submitting something for money or academic credit with such errors is shameful. The credibility of works that contain careless errors is easily dismissed.

  59. That guy will perish on his own, and what a false lifestyle he’s living in. The parents feel they are taking care of him, and they are in one way, but hurting his future.

    John DeFlumeri Jr

  60. Takilla says:

    @Henry, not sure if you’re in publishing or what … but do you honestly believe that the average person would see that apostrophy missing and think “well! I never! Clearly this guy has nothing useful to say!” I mean I see where you’re coming from and all but there are probably a lot of people that can’t even spell apostrophy (like me for example) much less care. Not so say that your point is not valid … I just have a hard time believing that many people would care. I don’t read the blog to learn grammar.

  61. Jill says:

    I’m the offspring of schoolteachers who went to school in places where family trust funds were common. I’d put the leach off the family fortune percentage at around 25%. The rest of the people I knew felt fortunate that they’d be getting out of law school or medical school with minimal to no debt, and would consequently have the freedom to pick post-college jobs based on area of interest and not just who offered them the most money afterwards. Or that they could take that interesting job in the arts or humanities field after undergrad that was more prestiege than paycheck. A good high school friend was able to take an essentially minimum wage entry level job in publishing that let her get her foot in the door in a highly competitive job field because her family could help her out with housing costs in NYC until she got the promotion and freelance work to bring her wage earnings up to where she was self-supporting.

    As for the 25%, I can indeed tell the stories of the people who never even managed to finish college because grandma’s trust fund was generous enough that they never had to work a day in their lives.

    Just like anything else in life, some people in those financial situations chose wisely and in a way that shows they’re thinking of their family and financial future, and others make bad decisions. It’s just that the scale can be very different than the people who come from poverty level families.

  62. SoCalGal says:

    The parents are doing no favors to the children. My father recently died & my younger sister was absolutely unable to function as a 38 year old woman thanks to Dad’s generosity over the years. My sister did not have a bank account, due to so many bad checks over the years that my dad picked up. She did not have any utilities in her name because of her poor credit. Even the lease of the home that she lived in was in my dad’s name. It became very messy, but I sorted it all out. Unfortunately, my sister hates me now & has stolen my identity. I had to file charges against her. It is a very sad situation.

  63. Henry says:

    #60, the comments are full of people pointing out spelling and puctuation errors nearly everyday. I wouldn’t penalize a commenter too much for a little laziness, but someone that is trying to be a ‘professional writer’ and offer these posts as public domain presumably so people can cite it needs to have such things pointed out, so the material can appear to be worth referencing. That is the same reason Wikipedia is unacceptable as a source, it is rickety and haphazard. And I certainly didn’t start any of the threads on the spelling and punctuation, but certainly will comment.
    Not only do we pick apart the punctuation issues, we also take issue with misspellings, which actually appear to be careless typos since they are not challenging words to spell. I would say those easy words get people going because it is a clear indication the effort is lacking here when it comes to proofreading.
    And yeah, in case you care, there is no ‘y’ in ‘apostrophe.’

    “The information on this site is in the public domain. Read this for more information. Read the privacy policy. Read the image use policy.
    This site is for entertainment purposes only. Trent is not a financial advisor and no information found on this site should be construed as financial advice.”

  64. I think that is a dangerous game to play for anyone who “relies” on their parents’ money.

    Better to go out and make your own. Your parents brought you into this world and took care of you for many many years–to me, that’s enough.

    Good post

  65. Carol says:

    I thought from reading the title (sans parenthesis) that it meant something about the kids’ finances being similar to their parents’ finances, i.e., debts, no savings, etc. — how they may have been influenced by their parents money decisions.

  66. Sierra says:

    Trent, I’m really surprised to hear you say that a $20K job is likely to be more personally fullfilling than an $80K job. The people I know who make $80K or more a year tend to be working in jobs doing what they went to college and/or graduate school for, pursuing work they love. They’re professors, or authors or computer programmers.

    Some people do what they love for very little money. I’m probably going to make between $20K and $30K this year working part-time at a creative pursuit I enjoy. But I anticipate making more in the future – this is a starting point I can afford because my husband makes enough to support us.

    Most $20K a year careers, though, are not so rewarding. They’re low wage job with little room for training or advancement, where you’re on a clock and following someone else’s rules all day long. For everyone making $20K a year writing, there are a lot more low earning jobs as a warehouse hand or a waitress.

  67. AJ says:

    I know four professional couples who all purchased homes w/downpayments from their parents or grandparents because they didn’t have tne money. No wonder the housing market is in trouble. They’re still struggling to pay w/everything else related to the care and maintenance of a house!

  68. E says:

    I have received quite a bit of financial support from my dad. Besides paying for college and paying my cc for a few months until I got work, he loaned me the down pmt for my car and later enough $ to pay off my cc’s after a year of unemployment. He said he would charge me interest but never did, and when he was out of the country at the end he had me put the balance toward my mortgage instead of paying him back.
    He also loaned a lot of money towards our house. The first time he said it was a loan but later said it was a wedding gift; the second time he never said. I keep track of those amounts so if he should want the money back when I sell the house (or make a bunch of money) I will give it to him.
    My dad is well off and smart with money, so I don’t worry that anything he gives me or my sister is going to hurt him (he gave her similar amounts for her house and student loan). My brother is also well off; I don’t think dad gives him money but I think they take turns paying for stuff when they’re together.
    I could survive on my own without dad’s help, and I have never asked – he has always offered and I think he enjoys the opportunity to be generous. But I am glad to not be dependent.

  69. Todd says:

    I’ve seen this in several people in my extended family, and I would honestly say that financially supporting adult children can be a form of abuse. It’s the same to me as parents who never discipline their children; those children often have a terrible time with friendships, marriages, jobs, parenting, etc. It makes peers resentful, it often causes the children to make friends with similarly privileged, destructive people, and it almost always crashes at some point when the money supply ends. By this point there is no sympathy for the poor spoiled one. No friend or relative would even think about helping them out. It doesn’t lead to a pretty life at age 50 or 60: Divorced, alienated from children, friends, and family, wondering what went wrong, and placing the blame on everyone but themselves.

  70. Kathy says:

    I have an aunt and uncle who are like Trent’s friend. They are in their early 60s and approaching retirement and they are up to their eyeballs in debt and can’t afford to retire or get basic dental or health care, but it’s their own fault.

    They both have college degrees, but my uncle is a janitor and my aunt works in retail stocking shelves. The reason why they are in this predicament is because they are so utterly stupid with money, but no longer have the in-laws (not my grandparents) to bail them out when they do stupid stuff with money. When they received a sizable inheritance after the in-laws passed away, they did one smart thing: paid off their mortage. But then they blew the rest on cars and stuff, and did not invest it or save it.

    And then a couple years ago, they put another mortgage on their paid off house to give my 30-something cousin money to go to Harley Davidson Mechanics school in Florida AND to have money to live on. My cousin lives at home and is not responsible for himself at all.

    As far as the 20/80K controversy, I’ve worked in 20K jobs and worked higher paying jobs, and I think that the point Trent is trying to make is that sometimes more money also brings more stress at work because you probably have more responsibility with that 80K per year job.

  71. NYC reader says:

    @Johanna, AnnK, JD, et al.

    In a recent set of comments, I was criticized for pointing out Trent’s problems with proper spelling, grammar, and word usage.

    The lack of apostrophe, and the repeated misuse of singular vs. plural words (their instead of her/his) in this post takes away from the credibility of the writer and his ideas. It makes Trent’s writing seem amateurish.

    Trent claims to be a professional writer now. In my opinion, he needs to use the tools of his chosen profession as a professional.

    Suggestion for Trent’s New Year resolution list: Instead of something useless, such as mastering the Rubik Cube, how about mastering proper English language skills? Trent has many posts about turning off the TV and improving one’s skills, challenging oneself, and learning new things, and how these activities improve a person’s earning and career potentials.

    I think it’s time that Trent steps up to the challenge and works on improving his writing and grammar skills for 2010. Perhaps there’s an English teacher in his circle of acquaintances, who could provide the “red pencil” and unflinching critique that his writing so desperately needs. I think it would be money well-spent on Trent’s part to hire this person to work with him on improving his writing skills.

  72. partgypsy says:

    My husband and I know a few people like this (though not to that degree), more wondering how a fellow couple could afford a more expensive house, or expensive adoption, or a new vehicle than we would think from their means, and then finding out it was really the parents. For example one couple we know the wife has a good job but the husband is a sahd. Not only did they get a house I would think would be at the limits if their budget, but are constantly doing expensive remodels! The only thing we can think of is that the parents are helping out.

  73. Sharon L says:

    NYC Reader, the use of the plural “their” instead of “his or her” IS accepted usage in most circles. I would suggest that you get off your high horse on this issue. The world and the English language are changing, and, in fact, is going back to where it used to be.

    Try doing some research on the issue!

    There is also a significant difference between writing for academia and writing for real people. Trent does have the occasional wrong use of the word, and spending some time studying grammar and writing would be of more use than mastering the Rubik’s Cube.

    Also an English teacher. College level.

  74. Johanna says:

    I’m not (usually) a stickler for “by-the-book” grammar. In informal writing, especially, certain “errors” have their place, and can actually help to enhance the writer’s personal voice. Sentence fragments, for example.

    The important thing is making sure your writing conveys the meaning that you want to convey. So what you really need to watch out for are those grammatical/usage/typographical errors that obscure or change your meaning. If an error changes your meaning into something ridiculous (as is the case here), then it makes you look ridiculous.

    If there were actually some ambiguity about whether you’re talking about one person or more than one, then using “their” to mean “his or her” would be a bad idea. Apart from that, it sounds a bit amateurish, and it always reminds me of those trashy talk shows where the woman is trying to conceal for as long as possible that the person she’s been having an affair with is another woman, but it’s not wrong.

  75. My first thought when I read this blog is that there is alot of judgement here and few facts. The truth is that your friend’s parents certainly could have placed assets in a LFP or a Trust and disbursed his inheritance to him while leaving sufficient resources for themselves. My uncle who had a thriving medical practice, disbursed assets to his wife and two children while he was still living. Now from the perspective of parents helping children and that help having unintended consequences such as prolonged dependency, drama and stife I understand your post although it is not really clear that your friend’s situation is an example of this. But I can give you a scenario that is. Over 20 years ago my father-in-law allowed his daughter and son-in-law to move into his home. My father-in-law was retired, had moved and the home was paid for. Like most of these scenarios the arrangement was to be temporary meaning that his daughter and son-in-law were to buy the home when they got back on their feet. That never happened. Fearing for his grandchildren (4 of them) my father-in-law allowed these folks to remain in his home, the home has fallen into disrepair because this family, living rent-free, never bothered to make even basic repairs. My father-in-law is being forced to use his retirement funds to repair and update this home. When his last grandchild turns 18 he is putting the house on the market and selling it as a way to recover some of the unplanned and excess funds spent on this house in retirement. His daughter who never got a degree and has no job skills will have to find somewhere else to live. The son-in-law got a divorce, moved on, is remarried and livingin a place of his own. My father-in-law is very bitter and angry about this situation. As an outsider, how this scenario is ending is pretty predictable. Now this is a situation to which your blog post is very relevant.

  76. Trent says:

    The lack of apostrophe was intentional.

  77. Sarah says:

    I really think it depends on the situation (and on the kid). My dad owns my house and my brother’s house. But we are good kids. We live within our means, we’re not in debt, and we don’t live some sort of jet-setter lifestyle. My dad didn’t put his retirement in jeopardy by buying our houses. He wanted us to avoid getting a mortage and paying 3x the purchase price of our homes by the time the 30 years were up. It’s the best present he could have given us. So, I say, as long as your kids don’t abuse the priviledge and aren’t jerks AND you can honestly afford it, buy your kid a house.

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