Wednesday, May 24, 2006

Back to the Bank of Mom and Dad

I'm way late in coming to this subject but I thought I'd touch on the April 20th NY Times article titled "The Bank of Mom and Dad," which has also been mentioned at My Money Blog and others, such as Make Love Not Debt, where a post about wedding expenses generated quite the brouhaha.

I do believe that parents should support their children in certain ways. For one, children are children. Even by the age when you're heading off to college, you're not necessarily all that mature in some ways. I think parents should do as much as possible, i.e. make sacrifices, to give their kids the best possible education. If the kid has to pay for all or most of it himself, at that age, will he take the long view of the benefits education can provide? (As Jonathan of My Money Blog did.) Or will they just decide they'd rather have some more cash and fewer loans to worry about? The only problem with this is that nowadays, most kids see college as a matter of prestige and partying. I really don't think a lot of kids are thinking very clearly about the future--they are just going to college because it's what all their peers are competing to do, and when you get there you can drink and have sex and play Ultimate Frisbee all day, and purchase logo sweatshirts to signify that you did so.
This is why I also believe that the children themselves should contribute to the cost of college to some degree. They should have a stake in it. They should have a reason to feel like they'd better get their money's worth. But to bear the entire burden is a lot to ask of someone that young. Some parents aren't going to be able to afford college costs no matter what, though hopefully, that is where financial aid comes into play. But if parents say they can't afford to contribute to college costs because they've been spending too much on clothes, cars, etc and just suddenly remembered they'd also need to save for retirement, that doesn't go down too well with me.
I have friends who were left high and dry by their parents the minute they graduated from high school and it's taken them decades to get over it-- the stories of people who put themselves through school while working multiple jobs are inspiring, but let's face it, that is a really tough thing to do. For some people, it becomes impossible, and they suffer setbacks that have a ripple effect lasting years, especially if they feel like the support that was withdrawn was emotional as well as financial. They didn't need everything to be handed to them on a plate, just a little more help getting on their feet as truly self-sufficient and productive adults. It's like having a broken leg, sort of-- you shouldn't hobble around on a crutch for the rest of your life, or your muscles will atrophy. But if you don't use a crutch for at least a few weeks, the bone will never heal properly and you'll have a limp forever.

Weddings are another interesting example. In some cases, the wedding is an opportunity for the parents to have their little day in the sun, and reciprocate the invitations they've received from other parents, so why shouldn't they pay for at least part of it? This is in itself a bit sad, that a child's marital happiness is kicked off with the parents' social status game. I personally don't see the need for huge elaborate weddings. I do see the need for fun parties and social rituals, and the occasional opportunity to wear something really fabulous. There should be a happy medium where it doesn't need to break the bank for anyone concerned.

But back to the NY Times article, which wasn't really about college and weddings-- what annoyed me about it was that these parents were supporting their mid-20s college graduate children with regular monthly stipends just to uphold a certain standard of living. One mother gave her son $300 a month and paid his cellphone bill. That is just lame. It's one thing for a parent to lend or even give some money to cover a one-time emergency expense, but if you are a young adult with a job, you should live within your salary. If that means not having your own huge apartment or not going out much or not having a cellphone, too bad. Suck it up. It's only temporary and living without luxuries is what it means to be young and on the first rung of the career ladder. If you really can't live without something you can't afford to pay cash for, go ahead and take on a little debt for a while-- even that is taking a certain degree of responsibility that is totally lacking in someone who gets a monthly handout to cover their cellphone.
Sigh... remember the good old days when spoiling children was defined as sparing the rod?

Now here's an odd personal perspective on the issue... as I've written, my parents covered most of the cost of my education, but I haven't taken any money from them since then except for a small loan that was quickly repaid (and the implicit costs of living with them temporarily after college.) My parents aren't poor-- for all that my dad openly worries about being able to afford his retirement, he told my sister that he would pay for her wedding, "within reason." Of course he neglected to specify what amount he thought was reasonable and I think it ended up being way more than he expected! My sister and her husband did pay for some things themselves, but from an offhand remark I overheard, I think my dad might have forked over something like $20,000, or even more. (The funny thing is that I think he would have been totally fine about it except that the organist at the church totally butched the piece that my dad had had specially transcribed for the ceremony. He sort of made it a condition that he had to be allowed to choose the music if he was paying, and thought he had put together a program of music that would be so unique and extraordinarily uplifting and unforgettable that he was totally crushed when the performance didn't live up to his expectations, and didn't feel much better being told that everyone else thought it sounded great, as all they were really paying attention to was the bride and groom coming down the aisle together!)
So since I have no intention to get married, or at least no intention to have any kind of big ceremony like that, my mother was joking that I would inherit the house to make up for my sister having gotten the wedding. That never made any sense to me, and would be a pretty lopsided deal! Later, when I started talking about buying the condo, my mother said she thought my dad should give me money towards that. More recently, she mentioned it again, saying she had talked to him about giving me money, and he sort of brushed her off, saying yes yes yes of course he planned to give me a substantial amount and to stop nagging him, basically.
So now I am in this awkward position-- I wish my mother had never mentioned it. I have the money to buy this condo on my own. I don't really expect anything from my father, and I'm certainly not going to ask him for money. But I'm looking at a pretty tight budget for the next couple of years, so of course it would be nice if he did give me something! But I don't want him to feel guilted into it, and I don't want any money from him if it's going to give him any anxiety about being able to pay his own bills. Also, my mother is likely to be asking him for a large sum quite soon, which may change his ability to give me anything-- see this post and its links for the lengthy background about why that is the case!)

Anyway, I plan to make my decisions based on my own savings and earnings. If some other money comes along, great, but I'm not counting on it.


mOOm said...

I have mixed thoughts on this... in families where there is pretty certainly going to be an inheritance passed onto the next generation - why should it only come once the parents have died and the children are themselves likely quite old... very wealthy families tend to pass on money earlier - of course most less wealthy parents might need the money and aren't sure how much can be passed on.... but paying for cell phone bills or specific things like that doesn't sound the way to go. Some time I will write more about this in my blog.

Anonymous said...

This is an interesting discussion, and it brings up all sorts of thought for me. It's tricky in families, especially when you have siblings. It's hard to spmetimes not feel bad about it. My parents paid for my sister's and my education. They paid for her wedding, provide her with free child care, but expensive toys for her children and loaned her a down payment for her house. Now I am finally in the market to buy a condo, and luckily I have the money in my retirement accout to use as a down payment, as no assistance seems to be forthcoming at this point. In a way I'm glad I can do it on my own. I've learned to be self reliant. Sometimes i feel like the financial witholding is a disaproval that I don't have a family of my own, but part of the reason I've made that choice is that i don't have the financial resourses to do so. So it's frustrating, but I ve made the decision to accept and love the situation for what it is, and work hard to build the life I want anyway, as ultimately I am the only one responsible for it. I totally agree on the last line fo your post, where you said "Anyway, I plan to make my decisions based on my own savings and earnings. If some other money comes along, great, but I'm not counting on it."