Economic Outpatient Care

[Ultralight]

In The Millionaire Next Door the authors talk about this very interesting phenomenon called "Economic Outpatient Care." The best example of this is when wealthy parents raise kids who are not capable as adults (for reasons like laziness and over-consumptive behaviors) of maintaining their wealthy lifestyle.

So the parents step in and pay for all sorts of things for their adult kids -- anything from grandkids' private school or cars or "starting new businesses" and down payments on houses.

Then this creates a negative feedback loop. The kids feel like they don't need to earn as much or save for retirement because they are always going to get paid by their parents. So the kids then don't earn or save much.

Anyone doing this or know people who live this way? Thoughts?

[catherine]

Yes I do. He's living in my house. Not DH. Textbook example of what you're talking about.

[Ultralight]

Yes I do. He's living in my house. Not DH. Textbook example of what you're talking about.

Is this what you were talking about in the other thread?

I just found out two people I work with are really, really on the EOC plan. I was actually taken aback by it...

[Teacher Terry]

I don't know anyone like this.

[Ultralight]

I found out a woman that works in my building married a guy from a wealthy family. He is about 30 and he just got his first job this past year because he has been in college and graduate school. His parents paid a huge down payment on their $300k+ house. He also had been receiving a considerable allowance in cash to do has he pleased. This may or may not be getting cut off soon.

So he is considering going back to school for another degree (he has two degrees in music). He wants another music degree. He might think if he goes back to school his parents will support him again.

He is currently a music teacher (his first job ever) at an elementary school in a poor district (it was the only place that would hire him). They have a one year old child.

I guess he complains endlessly about his job and does not help out much with childcare. She is thinking that maybe she can get a job to support them both, maybe with help from his parents, so he can go back to school again.

She has urged him to be a history teacher because his job prospects would be better. He will not consider it.

Together they probably make $85k or maybe $95k.

[Teacher Terry]

She is married to a loser. She and his parents are enabling him. Ugh!

[ApatheticNoMore]

I know people who are lazy but that's more middle class than anything that would actually qualify as wealthy.

But helping with downpayments on houses, I'm sure it's done by parents all the time and it's normal (it's how various ethnicities get ahead - they help family out etc.), how else would anyone get started with housing around here. I'm not saying all parents are doing it or can afford it, but then renters are a significant part of the population anyway.

[Ultralight]

She is married to a loser. She and his parents are enabling him. Ugh!

Another woman in my building at work is in the same situation, but probably even worse.

But I would not say these guys are losers. I think that might be a bit harsh, as they are educated and employed.

[Teacher Terry]

Employed now but whining and looking to get a 3rd music degree so he won't have to work. If it quacks like a loser and walks like a loser.................

[ApatheticNoMore]

Employed but more often unemployed, but wow he has 1 year of employment in 30 years of living or something so impressive. Look I wouldn't judge if he lost his job or whatever. Hmpf, it happens. But stupid idiot is going to quit his job after one year with a one year old kid.

although I do half imagine his wife's thinking: well if someone is going to go back to school, it should probably be him, as men make more over a lifetime ...

[Ultralight]

I know people who are lazy but that's more middle class than anything that would actually qualify as wealthy.

But helping with downpayments on houses, I'm sure it's done by parents all the time and it's normal (it's how various ethnicities get ahead - they help family out etc.), how else would anyone get started with housing around here. I'm not saying all parents are doing it or can afford it, but then renters are a significant part of the population anyway.


Apparently his parents told him that the downpayment for the house would be coming out of his inheritance. But he really wanted that house. His wife thought it was too much house for their salaries "but it was just what he was used to."

[Ultralight]

although I do half imagine his wife's thinking: well if someone is going to go back to school, it should probably be him, as men make more over a lifetime ...

That is the past, not the future.

[catherine]

Is this what you were talking about in the other thread?

I just found out two people I work with are really, really on the EOC plan. I was actually taken aback by it...

Backstory on BIL: When he was 3 (DH was 12), my MIL suddenly became a widow when her husband had a fatal stroke. She couldn't drive, she didn't work at that time--she had come to the US from Scotland and she and her husband were apartment building supervisors and then he bought into a car dealership. Life was looking good until he died and left her alone with 2 kids.

She learned how to drive, and she got a job as a clerk in Macy's. Her parents moved in with her, and every time she tried to go out in the evening her mother would tell her "Don't forget you have wains at home." (wains=kids). Big guilt trip on MIL. And if you don't go out, you don't get the chance to find another partner to help you through life. She never even dated after her husband died.

MIL pressed DH into service as the man of the house, but at 17 DH joined the Marines, and then came back and met me and we got married. So BIL and MIL developed a codependent, symbiotic relationship. She discouraged him from going away to college. She didn't trust him to walk to the mailbox to mail a letter. When he got a job as an adult, she got up at 6 to make him his lunch. She also never, ever asked him for rent, or food money, even when he was making a full-time wage. He would go to the supermarket and buy the most expensive artisanal cheeses and meats and put it on her credit card. Meanwhile, she brought her own tea bags to restaurants and asked for hot water, and inspected every receipt for errors in the store's favor and then fought for every nickel .

But she also would criticize him--tell him he would never do this or that. When he forayed out to the West Coast to see if he would like living there, she would send him letters telling him he'd never make it and he should come home. He gave in after 3 months.

When he got fired from a full-time retail job, he didn't go back to work for a couple of years, and later that's when the seasonal low-wage jobs came in. He's 10 years younger than I am, but he had no computer skills whatsoever. None. He basically became cocooned in his mother's house and never left until she died. And then you know the rest of the story.

Yes, DH and I unfortunately did a lot of carrying the same torch since MIL died, but the damage had been done. When he spent money to go to a community college 4 years ago, he simply floundered in the most basic classes, despite hours and hours of tutoring from DH and I. Not because he wasn't trying--because of his cognitive issues and also because he never had used his brain for basic stuff for his entire life.

So while anyone could say we've been enabling, the fact is, if you don't hand a crutch to someone who can't walk, is that enabling or is that accepting that that person needs help? DH and I struggle with that all the time.

And then, of course, there's my MIL's deathbed instruction to DH: "Take care of your brother."

[Ultralight]

Backstory on BIL: When he was 3 (DH was 12), my MIL suddenly became a widow when her husband had a fatal stroke. She couldn't drive, she didn't work at that time--she had come to the US from Scotland and she and her husband were apartment building supervisors and then he bought into a car dealership. Life was looking good until he died and left her alone with 2 kids.

She learned how to drive, and she got a job as a clerk in Macy's. Her parents moved in with her, and every time she tried to go out in the evening her mother would tell her "Don't forget you have wains at home." (wains=kids). Big guilt trip on MIL. And if you don't go out, you don't get the chance to find another partner to help you through life. She never even dated after her husband died.

MIL pressed DH into service as the man of the house, but at 17 DH joined the Marines, and then came back and met me and we got married. So BIL and MIL developed a codependent, symbiotic relationship. She discouraged him from going away to college. She didn't trust him to walk to the mailbox to mail a letter. When he got a job as an adult, she got up at 6 to make him his lunch. She also never, ever asked him for rent, or food money, even when he was making a full-time wage. He would go to the supermarket and buy the most expensive artisanal cheeses and meats and put it on her credit card. Meanwhile, she brought her own tea bags to restaurants and asked for hot water, and inspected every receipt for errors in the store's favor and then fought for every nickel .

But she also would criticize him--tell him he would never do this or that. When he forayed out to the West Coast to see if he would like living there, she would send him letters telling him he'd never make it and he should come home. He gave in after 3 months.

When he got fired from a full-time retail job, he didn't go back to work for a couple of years, and later that's when the seasonal low-wage jobs came in. He's 10 years younger than I am, but he had no computer skills whatsoever. None. He basically became cocooned in his mother's house and never left until she died. And then you know the rest of the story.

Yes, DH and I unfortunately did a lot of carrying the same torch since MIL died, but the damage had been done. When he spent money to go to a community college 4 years ago, he simply floundered in the most basic classes, despite hours and hours of tutoring from DH and I. Not because he wasn't trying--because of his cognitive issues and also because he never had used his brain for basic stuff for his entire life.

So while anyone could say we've been enabling, the fact is, if you don't hand a crutch to someone who can't walk, is that enabling or is that accepting that that person needs help? DH and I struggle with that all the time.

And then, of course, there's my MIL's deathbed instruction to DH: "Take care of your brother."

Your BIL is probably your cross to bear.

[Teacher Terry]

Catherine, you guys didn’t create the monster but now have to deal with it. I feel sorry for all of you including him. I used to tell parents of kids that were disabled the sooner we can get them into the work force and productive the better the child will be when the parents pass away. We would start working with kids at 16 to prepare for the future. Obviously depending on how severe the disability is, etc.

[jp1]

My senior year of college I lived off campus with some friends. Our next door neighbors were an older couple with a 30-something son who was mentally handicapped. He was functional, loved fire engines and Michael Jackson, and was very excited the entire month of his birthday. We went to his birthday party and gave him a video tape of Yellow Submarine. For the rest of the school year anytime he saw any of us he would sing Yellow Submarine so we obviously picked a suitable gift. But I often wondered what was going to happen to him after his parents died. His sister lived literally as far away as possible while still being in the US (Alaska vs. Miami) so she wasn't at all involved in his life.

[Teacher Terry]

That is the type of situation where he could have worked, done chores at home and lived in a group setting with supports. Parents do their kids no favors. It was not a fun conversation to have.

[Ultralight]

I am really wondering how widespread EOC of the children of the wealthy is...

[iris lilies]

I am really wondering how widespread EOC of the children of the wealthy is...
It is not unusual here for grandparents to pay all or part of private school bills because the public schools suck. When you live in this neighborhood you dont send your children to public schools, although wedo have a new charter school in the neighborhood, and that is drawing many children from this immediate area.

I know a couple of people with real money, old money, it is in a family trust. From what I can get in bits and pieces over the years, these old trusts like to pay for education and sometimes down payments on houses. Once I was shocked to hear that one of them was paying for a subscription to the Wall Street Journal. I thought that was funny. This was someone who could afford to pay for a subscription to the Wall Street Journal himself. He is the same one who shared brief stories about life in a genteel house. He said that when he was a kid he went upstairs to the attic of his family house and discovered a grand piano! That attic had to be pretty big to house that and have it be a surprise. He is the same person who said that his parents had no idea how to make coffee because they’ve always had household help to make the coffee.

[bae]

I am really wondering how widespread EOC of the children of the wealthy is...

Well, I paid 100% of the tuition/room/board for my daughter's undergraduate education, as she wouldn't have qualified for financial aid, and it seemed cruel to task her with taking out $200k of loans for a Classics degree. And we'll be paying for her PhD program as well, as the market for Anglo-Saxon/Norse/Celtic language academic specialists is a bit thin.

And then in my old age she can support me on her lofty professor's salary.

[iris lilies]

Well, I paid 100% of the tuition/room/board for my daughter's undergraduate education, as she wouldn't have qualified for financial aid, and it seemed cruel to task her with taking out $200k of loans for a Classics degree. And we'll be paying for her PhD program as well, as the market for Anglo-Saxon/Norse/Celtic language academic specialists is a bit thin.

And then in my old age she can support me on her lofty professor's salary.

I am curious, and of course it is none of my business, how your daughter is handling her inheritence from her grsndmother. And—how did that factor into,you funding the next several years of her student life?

[Teacher Terry]

Bae, you have one child and can afford it so really a no brainer.

[iris lilies]

Bae, you have one child and can afford it so really a no brainer.
We will talk around him, haha. I agree with you.

We have a similar situation in my family. My cousin,who has millions, has a young daughter going for her doctorate. He is funding it.

While he isnt a self made millionaire, exactly, because he did inherit a ton of his wealth, he did always work, save, and invest as well as live frugally to add to the stash. Anyway, from bits he has said here and there, he seems a little miffed that she sails through life expecting things to go smoothly and money to be forthcoming. I dont know her, but I cant help but think she saw a middle class life on the modest side, and adopted thise values. I doubt thst she is a spendthrift, yet, she is going thru many years of grad school on her dad’s dime. i am guessing that he struggles with giving her too much vs. requiring her to be independant.

I think he is doing the right thing since she seems to be a very bright, popular, busy, and happy young lady. The money is there, so why not use it for worthwhile things?

[bae]

I am curious, and of course it is none of my business, how your daughter is handling her inheritence from her grsndmother. And—how did that factor into,you funding the next several years of her student life?

It is in trust for her, she doesn't receive it until she is 25, unless I choose to allocate her funds from it for educational purposes.

I have involved her in the investment strategy for it over the past several years, she has 4 years to go until she gets it, my intent is to help her learn more about capital management, taxes, and that sort of thing. It is going quite well, she just submitted to me today her proposed budget for her coming first year of grad school overseas, and I will fund it quarterly as she presents updated reports.

The goal is to preserve as much of her capital as possible so she can live the life of an underpaid post-doc and then college professor, much as her grandmother did. And to teach her how to continue managing the capital so she can be relatively independent.

This approach is also much more tax-efficient for the moment :-)

[ApatheticNoMore]

I am really wondering how widespread EOC of the children of the wealthy is...

I suspect if they are actually wealthy it might work as the slack is there (assuming the kids just want supplements to their income and aren't really far gone - drug addicts and the like, then they'll just self-destruct).

It's middle class parents trying to support a failure to launch kid that isn't going to work because the money really isn't there. But I still suspect help with downpayments is fairly widespread.

[dmc]

We funded 95% of the kids college. They did not qualify for any loans, but I wanted them to pay at least a token amount of their own money. But I didn’t want them to have school loans to deal with. We also bought them several cars and have helped them a little here and there.

But they also never moved back after college and have been pretty much on their own since. Except for the two months one did live with me while buying a new house down here.

i don’t mind helping a little, they are most likely going to inherit a nice sum anyway, why not them have a little here and there when they could use it. I just don’t want them to depend on it.

[Gardnr]

It's middle class parents trying to support a failure to launch kid that isn't going to work because the money really isn't there. But I still suspect help with downpayments is fairly widespread.

Hubby's sister to a tea. Parents money gone, house fully mortgaged (they bought it 39y ago) and they still work at 75 and 77yo. She moved away as did the 3 adult sons....sigh.....................

We asked for a small short term loan on 2 occasions. Denied. Don't say parents treat their children equally....my Dad gave us the first loan request-we paid it back over the 5y agreed upon with interest at current rate. 2nd time we got a small commercial loan short term. I know we're better off for it.

[Tybee]

I see college educations and house downpayments as great if you can swing it for all of your children equally. If not, you can't.
In colonial America it was completely common for young couples starting out to get a house built for them. Often, it was smallish. Then, they moved into the larger house as their families grew and the grandparents went into the smaller house.
It's not like this is new behavior, for people to help their children to start out in houses.
I don't think it hurts the children, unless they cannot swing the payments etc on their own. I thought that was what Stanley was writing about with the economic outpatient stuff--the grown children who never grew up because their parents were funding their lifestyle on an ongoing basis.

This is very different from those parents dealing with disabled children who grow to adulthood. A whole 'nother kettle of fish. I learned recently that my great grandfather worked until he was 60 in a career he hated to care for my disabled great uncle. When the uncle died, he practiced law and then became a judge.

This was a hundred years ago.

Many parents still face these decisions when they have disabled children.

[Teacher Terry]

Yes big difference between helping kids get a start in life versus making them dependent on you.

[bae]

There's also EOC in the other direction, I suppose. Parents in the past typically planned on their children help support them in their old age.

[catherine]

Yes big difference between helping kids get a start in life versus making them dependent on you.

Absolutely. And I agree with Tybee, too. We gave our kids their undergrad degree--anything past that was on their dime. As for houses, that will be tough but I am hoping I can maybe make small contributions when the time comes. One son already has a house--the Champlain Housing Trust gave him the down payment.

When one of my son's needed help with rent one month he asked us for it, but it took him weeks to build up the nerve and he cried on the phone when he asked, because he had never asked us for anything.

[Teacher Terry]

We helped our kids when they were young and needed it. I wouldn’t help with a house down payment because we are semi-retired and need to look out for ourselves.

[ApatheticNoMore]

Yes big difference between helping kids get a start in life versus making them dependent on you.

it's very difficult to figure out where one ends and the other begins when you are a young adult trying to figure it all out and navigate the world and what help one should take (for education etc.). I opted for extreme independence but have to wonder .. especially as money was not even kinda distributed evenly and I opted to ask for little.

I have at times been advised to ask for a fair share, but figured my parents would need that money. But would I support my mom if need be despite a sibling bankrupting her? If I could (in no position to now). Yea, the other cheek gets turned and as we were always told: "life is not fair". Mom is a sweet person though and so, both my parents were terrible parents, but mom is a nice *person* and so I would help if I could, she is happy now even in old age that she no longer has to caretake anyone, not kids, not an older spouse etc.!

[Ultralight]

I think that if your kids are capable of buying a house and they choose one well below their means then you can spot them for the down payment and probably not run into trouble. But I would like to see research on that as I am speculating.

But the women I know from work who get EOC bought way too big a house for their income. And the parents helped so the kids could live upper middle class lifestyles without having to earn upper middle class salaries.

MND says the best gift you can give your kids, by way of money, is to pay their college tuition. That is really all.

My dad paid for two community college classes I took when I was 19.

He also gave me $3,000 for a Roth IRA. It is still sitting in the IRA now.

My parents have, off and on, given me a couple hundred bucks on my birthday.

Perhaps these things were very low level EOC...?

[Teacher Terry]

I guess it depends on the cost of the house. Here homes are starting at 350k so couldn’t give 20% of that to 5 kids without hurting our financial future.

[Ultralight]

I guess it depends on the cost of the house. Here homes are starting at 350k so couldn’t give 20% of that to 5 kids without hurting our financial future.


All the houses there are $350k+? That can't be possible. Let me zillow it. Which city are you in?

[Teacher Terry]

Median home is 421k. You can live in the north valleys for 239k and drive in. We are at a record high for housing costs even surpassing the bubble.

[Ultralight]

Median home is 421k. You can live in the north valleys for 239k and drive in. We are at a record high for housing costs even surpassing the bubble.

People should just move to another state or city. It does not seem worth it to me, unless you have some bangin' ass high payin' job.

[Teacher Terry]

Luckily we bought before it got crazy. People are moving in like crazy due to mild 4 seasons, proximity to Tahoe and ski resorts, mountains, etc. Also Californians are retiring here. We landed a bunch of tech companies so that is bringing people in. Rents are skyrocketing and many people are finding it unaffordable.

[Gardnr]

Boise ID was recently named the fastest growing city in the USA. Median home price: $300k. $200k is what the median income family can afford. How does this work?

Reno NV just 6.5h SW of Boise? Median home hit $400k in April.

https://www.rgj.com/story/news/2018/05/30/how-renos-median-housing-price-stacks-up-other-cities/637621002/

All I can say is I'm glad we have 2 paid for smaller homes. 1 in the city and 1 in the mountains. We're set!

[Ultralight]

Median price for a home in Columbus, OH is $186,000.

[Ultralight]

One of the women who is on EOC and whose husband is also on EOC was telling one of my frolleagues about her family's lake house and how her dad and his siblings are selling it. She was like: "It is my lake house too! I don't want them to sell it!"

Apparently she said: "It is a $1,200,000 lake house. The property taxes are $30,000. So they want to sell it and split up the money."

My frolleague was like: "Wow... The property taxes are more than half my salary!" But the woman who is my boss's boss said just went on lamenting the loss of her lake house.

She consoled herself by saying: "Someday my husband and I will buy a lake house. That way our kids can grow up with a lake house because I grew up with one and my husband grew up with one too. We want our kids to have that and our grandkids too."

[Teacher Terry]

Median income for 2 wage earners is 52k. We have discussed cashing out and moving but have lots of friends, so many things to do all the time. Plus beautiful and perfect weather.

[catherine]

One of the women who is on EOC and whose husband is also on EOC was telling one of my frolleagues about her family's lake house and how her dad and his siblings are selling it. She was like: "It is my lake house too! I don't want them to sell it!"

Apparently she said: "It is a $1,200,000 lake house. The property taxes are $30,000. So they want to sell it and split up the money."

My frolleague was like: "Wow... The property taxes are more than half my salary!" But the woman who is my boss's boss said just went on lamenting the loss of her lake house.

She consoled herself by saying: "Someday my husband and I will buy a lake house. That way our kids can grow up with a lake house because I grew up with one and my husband grew up with one too. We want our kids to have that and our grandkids too."

I don't consider this to be an example of EOC. I know I'm not alone in that if you are lucky enough to have grown up on the water in the summer with family, you develop very strong emotional ties to the house. I can definitely speak for myself, having lived on the beach in my great-aunt's cottage in the summer. I idealized that place for decades and to this day I refuse to do a Google Earth on it because I couldn't take the emotional toll if I saw that someone HGTV-d it. I was devastated when my mother sold it, and I probably took the words out of your friend's friend's mouth.

My husband had a similar experience in the summer with his relatives. Our common history with family beach houses is probably a strong reason why we wound up here with a house right on the lake.

Taxes on a beach house can be extremely ridiculous, that's true. I became FB friends with the guy who lived across the street from me at the beach (and with whom I had adolescent summer fling in 1965. :). He and his sister finally sold their cottage, which had been in the family since the turn of the century, because they couldn't even use the cottage in the summer. They rented it out to pay the taxes.

So your friend's friend is just having a normal emotional response to what she considers a huge loss. I think you can cut this particularly EOC a break. Family vacation homes are a luxury for sure, but they're not about the money.

[Gardnr]

People should just move to another state or city. It does not seem worth it to me, unless you have some bangin' ass high payin' job.

Well, because you don't have relationships and always want to be ready to run with what fits in your vehicle, you wouldn't understand what it is to be a family, make a home and feel rooted in the life created over decades. So I shouldn't be surprised that you think everyone should simply pick up and move. Sigh......

[Gardnr]

Median price for a home in Columbus, OH is $186,000.

So you choose to pay more in rent than you would buying a home in your chosen city? Hmmmmmm.....

166k mortgage is $785. You could save $150/m which would pay most of your utilities. You'd break even and be a homeowner......oh wait, then you couldn't run! Nevermind.

[eleighj]

In The Millionaire Next Door the authors talk about this very interesting phenomenon called "Economic Outpatient Care." The best example of this is when wealthy parents raise kids who are not capable as adults (for reasons like laziness and over-consumptive behaviors) of maintaining their wealthy lifestyle.

So the parents step in and pay for all sorts of things for their adult kids -- anything from grandkids' private school or cars or "starting new businesses" and down payments on houses.

Then this creates a negative feedback loop. The kids feel like they don't need to earn as much or save for retirement because they are always going to get paid by their parents. So the kids then don't earn or save much.

Anyone doing this or know people who live this way? Thoughts?


EOC to me is defined by the following statement: The authors also make the observation that UAWs tend to have children who require an influx of their parents' money in order to afford the lifestyle that they expect for themselves, and that they are less likely to have been taught about money, budgeting and investing by their parents.

There are couple of terms that probably need to added to this discussion:

1. Under Accumulators of Wealth (UAWs) - defined as "age * income * 10% = net worth"; so a 50 year old has an annual income of $100,000 should have a net worth of $100,000*50*10% = $500,000. If that person / family has less then that number then they are UAW.

2. Prodigious Accumulators of Wealth (PAWs) - The inverse of UAW.

UWAs from both the book and my observations of certain family members not in our household want to spend their money on stuff. They haven't met a dime they didn't want to spend. As a result their children adopt the lifestyle and need more money than they make. The dominos really start falling when mom and dad can no longer work and need help.

[Tybee]

EOC to me is defined by the following statement: The authors also make the observation that UAWs tend to have children who require an influx of their parents' money in order to afford the lifestyle that they expect for themselves, and that they are less likely to have been taught about money, budgeting and investing by their parents.

There are couple of terms that probably need to added to this discussion:

1. Under Accumulators of Wealth (UAWs) - defined as "age * income * 10% = net worth"; so a 50 year old has an annual income of $100,000 should have a net worth of $100,000*50*10% = $500,000. If that person / family has less then that number then they are UAW.

2. Prodigious Accumulators of Wealth (PAWs) - The inverse of UAW.

UWAs from both the book and my observations of certain family members not in our household want to spend their money on stuff. They haven't met a dime they didn't want to spend. As a result their children adopt the lifestyle and need more money than they make. The dominos really start falling when mom and dad can no longer work and need help.

That is an excellent summation of the EOC material from the book, eleighj! I had forgotten about the PAW/UAW and how that factored in. I think you really nail it here:
"As a result their children adopt the lifestyle and need more money than they make. The dominos really start falling when mom and dad can no longer work and need help."

[Teacher Terry]

I spent my summers on a cabin at the lake. When we went to Wisconsin we located it and walked the property. I brought pictures to show the owners but they weren’t home. It was a small resort when my folks owned it. I understood when my folks sold it. Here you have to be wealthy to own anything on a lake.

[ToomuchStuff]

My experiences are, it isn't wealthy parents who tend to have kids that are EOC, but those that would still be classified as middle class income.

[Gardnr]

My experiences are, it isn't wealthy parents who tend to have kids that are EOC, but those that would still be classified as middle class income.

That's my in-laws. They could have had a comfortable retirement. Instead they are both still working in their late 70s:(

[jp1]

Thinking back to my childhood/teenage years I remember my parents always being 'fussy' when it came to money. Any request was questioned. Is it really necessary, etc. But there were plenty of things where money was spent freely. Like music lessons for my sister and myself. In hindsight my parents were teaching a dual lesson that both my sister and I learned. First, spend thoughtfully on the things that are important only. Second, don't expect your parents to supply your every whim. I took those lessons to heart and was perfectly happy to receive an 8 year old hand-me-down Nissan as my college graduation gift. I did ask for help with an apartment deposit because NJ, where I moved to upon graduation, was pricey. But I paid that back within a year. After that I never again asked for, nor expected, financial support from my parents. They had already given me plenty of things that I will always be grateful for (including the above-mentioned music lessons that helped lead to a half tuition music scholarship at a private university) so it never really occurred to me to ask for more.

I couldn't quite comprehend the mindset of a friend of a friend in college who expected one set of parents to gift her a brand new car for graduation (she already had a 3 1/2 year old car that was a high school graduation gift) and the other set of parents to give her a fully paid for condo. It felt like she was from a different planet than I was.

[Gardnr]

I couldn't quite comprehend the mindset of a friend of a friend in college who expected one set of parents to gift her a brand new car for graduation (she already had a 3 1/2 year old car that was a high school graduation gift) and the other set of parents to give her a fully paid for condo. It felt like she was from a different planet than I was.

I'm with you. I worked full time while going through nursing school (the faculty said no one can have a job and pass). A study group friend said "I quit my job and called Dad saying I need a $500/month allowance so i can go to school-she was married as was I. Daddy sent it. I couldn't believe my ears. I passed with a B-which is great by me considering my worked hours. I graduated with no school loans and no Daddy-care.

[Tybee]

I thought long and hard about giving each of my three children a very small downpayment on a house. I decided I would rather they had the money now, when they could do some good with it for themselves and their children, then when I die and they are in their 50's or 60's.

The first two bought houses because they could qualify for mortgages and make payments, etc. One has already seen their house go up 50,000 in 2 years. That was a good investment. The other has a very nice solid house for himself and his son and his mortgage payment is about 700 dollars a month. The third lives in a very expensive area and could not afford a house there--he shares space with 4 or 5 other people and is happy doing that. His money is in a brokerage account so that it can grow--I invest it after discussing it with him--we started one year ago and he is up 18% in the account. So hopefully that investment can grow for him over the years until he is ready to use it for something good, like a house or starting his own business.

I am happy with this arrangement, that I have given them something to invest for themselves and their future. To me, it is no different than college. I would not be able to do 50000 each kid either, Terry. My neighbor is doing the ongoing EOC thing for her daughter--I would not do that for a grown child, as I think it is intrusive in their life.

[Gardnr]

I thought long and hard about giving each of my three children a very small downpayment on a house. I decided I would rather they had the money now, when they could do some good with it for themselves and their children, then when I die and they are in their 50's or 60's.

The first two bought houses because they could qualify for mortgages and make payments, etc. One has already seen their house go up 50,000 in 2 years. That was a good investment. The other has a very nice solid house for himself and his son and his mortgage payment is about 700 dollars a month. The third lives in a very expensive area and could not afford a house there--he shares space with 4 or 5 other people and is happy doing that. His money is in a brokerage account so that it can grow--I invest it after discussing it with him--we started one year ago and he is up 18% in the account. So hopefully that investment can grow for him over the years until he is ready to use it for something good, like a house or starting his own business.

I am happy with this arrangement, that I have given them something to invest for themselves and their future. To me, it is no different than college. I would not be able to do 50000 each kid either, Terry. My neighbor is doing the ongoing EOC thing for her daughter--I would not do that for a grown child, as I think it is intrusive in their life.

A wonderful gift you've given your children....and you raised them with the wisdom to use it well. This is very different from EOC. Lucky kids to have your thoughtful choices.

[Chicken lady]

My daughter is renting a house with a roomate. It is an interesting experience for her and also for me to watch. They have similar educations, jobs, and income. Dd struggles to understand her roomate’s thoughts and behavior.

The toilet broke, so roomate said “we need to call a plumber.” Dd bought an $8 part and fixed the toilet. They are looking for living room curtains. Roomate selected a variety and showed them to Dd. Dd said “ they’re all fine, let’s just get the cheapest ones.” Roomate said “I always get the most expensive.” Roomate said “we need to hire a lawn service.” Dd said “buy a lawn mower and I’ll mow.” Their biggest conflict has been over the thermostat. Roomate has agreed to turn it up a little, but Dd is still pointing out that she should not need to wear a sweater in summer. Soon, it will be winter, and i’m Pretty sure she will be taking the other half of the “it’s too cold in her. Put on a sweater.” Exchange.

roomate is always on the edge of broke. Dd in spite of a much longer commute and higher gas costs is saving 20% of her salary (we are subsidizing her car insurance and phone by letting her pay her part of our family plans instead of getting her own, and dh work still covers her health insurance.)

i just keep telling Dd “maybe she will learn some good habits from you. Just don’t pick up bad ones from her!”

[Teacher Terry]

UL, forgot to mention that the reason that the houses are so much cheaper in the north valleys is because many are trailers on a piece of land. My son and his wife don’t plan on buying.

[Teacher Terry]

CL, your daughter sounds very mature. Tybee, I think it’s great that you helped your kids within your means. My youngest saved his money and is now traveling in India for 7 weeks before moving to Vietnam to teach English. P He is frugal and said his hotel doesn’t have A/C or hot water.

[Lainey]

Tybee,
I know of grandparents who bought a house with a good-sized down payment for each of their 3 adult grandchildren. (think $50,000 to $100,000 each)It allowed the adult grandchild to live more cheaply because the remaining mortgage was low enough for anyone with a modest income to manage it.
However, the house and mortgage were kept in the name of one grandparent and the grandchild. If the grandchild was married or became married later, the spouse was not put on the deed or mortgage. I think the fear was that a divorce would mean the loss of the house if they had to sell it and split any net profits.
It transferred wealth during their lifetime and allowed the adult grandchildren to have a decent middle-class home.

[Gardnr]

Tybee,
I know of grandparents who bought a house with a good-sized down payment for each of their 3 adult grandchildren. (think $50,000 to $100,000 each)It allowed the adult grandchild to live more cheaply because the remaining mortgage was low enough for anyone with a modest income to manage it.
However, the house and mortgage were kept in the name of one grandparent and the grandchild. If the grandchild was married or became married later, the spouse was not put on the deed or mortgage. I think the fear was that a divorce would mean the loss of the house if they had to sell it and split any net profits.
It transferred wealth during their lifetime and allowed the adult grandchildren to have a decent middle-class home.

My SIL did that for her sons (my brother died when they were teens). However, her oldest son's home is his and SILs. She refuses to put her DIL on it. And for the younger son? She gave them the downpayment. Her name is not on their home and her DIL is......it creates tremendous anger from the DIL not 'trusted' towards her MIL.

Treat kids equally if you do anything!

[Lainey]

My SIL did that for her sons (my brother died when they were teens). However, her oldest son's home is his and SILs. She refuses to put her DIL on it. And for the younger son? She gave them the downpayment. Her name is not on their home and her DIL is......it creates tremendous anger from the DIL not 'trusted' towards her MIL.

Treat kids equally if you do anything!

Very true! It's odd that she did that, but maybe it will all resolve after SIL's death? That's what I'm guessing with the grandparents I mentioned above, that they will have a will stating that the spouses involved will inherit. Just a guess, though.

[Williamsmith]

I struggled with this concept when it was posted. I suppose I fall somewhere in the middle. Two of my three kids went to college and I paid half of each. Both paid off their half within three years of graduating. I thought that showed great maturity on their part. One of them asked for a down payment on a house. I had the money but I didn’t give it. I had purchased a new vehicle for her, albeit the cheapest import one can buy. I felt I’d done plenty and didn’t want to enable her to get into a house she couldn’t afford. She found a way to get the house anyway. I purchased a used vehicle for the other college graduate. And I bailed out one after Harvey flooded him out and ruined two cars and the bottom floor of his house.

And then there is he third child who I never spent much on. The oldest, didn’t get a car or college tuition. But I see him needing financial support for a long time...and I’ll try to catch him up as I am able. When I was their age, I received zip, zero, nada in the way of financial assistance. I think it was easier back then to be stable and slowly grind your way up the middle class ladder. Today, I’m afraid the rungs on the ladder have been removed.

[catherine]

The oldest, didn’t get a car or college tuition. But I see him needing financial support for a long time...and I’ll try to catch him up as I am able. When I was their age, I received zip, zero, nada in the way of financial assistance. I think it was easier back then to be stable and slowly grind your way up the middle class ladder. Today, I’m afraid the rungs on the ladder have been removed.

It's so hard to keep things "equal" when you have several children. I had it in my head that I wanted to give a certain amount of money to each kid, for their choice of either a wedding or a down payment on a house. College education had already been taken care of for 3 of the 4 that went to college. So, do I give MORE to the kid who DIDN'T avail himself of a free undergrad education paid for by Mom and Dad? Do I give LESS to the kid who chose a private liberal arts college over the state school that her brothers went to? (And which I am STILL paying off?). It gets a bit complicated.

My grandfather gifted me a college education. My extremely generous MIL gave us the down payment on our house out of the money she inherited from her mother. But I have never asked for the money. I consider myself to be pretty independent and resist taking help from anyone. Maybe that's simply a personality trait rather then not being a product of indulgent parenting. My parents certainly weren't indulgent because they couldn't be--they had no money. Im sure there are many factors at play.

So I have on my wall in NJ a "I will retire when...." slip of note paper with several things listed on it for me to check off. This little goal I have for my kids is one of those things.

[Tammy]

I’m like your older child - my 3 younger siblings all got a lot more than I did. I never have given it much thought but my dad has apologized several times for it. I always attributed it to my getting married at age 19 and moving out, when dad wanted me to get 4-6 years of college first. The other 3 followed his wishes until age 25-30 or even later. He can have a lot of opinions ... and I only have my one precious life and I value my autonomy.

Anyway I’m interested WilliamSmith in your reasons/situation that the oldest did not get as much ...

[Williamsmith]

I’m like your older child - my 3 younger siblings all got a lot more than I did. I never have given it much thought but my dad has apologized several times for it. I always attributed it to my getting married at age 19 and moving out, when dad wanted me to get 4-6 years of college first. The other 3 followed his wishes until age 25-30 or even later. He can have a lot of opinions ... and I only have my one precious life and I value my autonomy.

Anyway I’m interested WilliamSmith in your reasons/situation that the oldest did not get as much ...

Reasons I think follow the manner of assistance....loans and the need.....immediate. He did not want to go to college so that whole snowball never got rolling. He went to a job skill school that placed him in the tool and die industry. But the owners of these tool and die shops both reap the profits and pay themselves three digit salaries while they pay their workers below living wages, skimpy benefits and no retirement plan.

Then he married early in life due to an unplanned pregnancy of a girlfriend. His first vehicle purchase I insisted he sign his own loan for. If I had co-signed he would have paid a much lower interest rate. But I refuse to co-sign anything for anyone. I still feel a bit guilty about that, but when he divorced and got screwed with the car that was underwater several thousand dollars, I bailed him out and got him into a car he could afford on a monthly payment.

He has no plans for retirement, no active preparation, lives day to day and has no savings. I subsidize his phone bill and car insurance by paying for it myself because I have the savings to pay the car insurance on an annual basis which is cheaper than monthly. And I can get him cheaper telephone service on my plan. He pays me back a monthly agreed upon amount.

It all is is based on my belief that in the future....he’s going to need to keep coming back to me for assistance while the other two are independent. But, my resources are not without limitation and anything I give to my children I take from my buffer against personal financial hardship.

[iris lilies]

I remember applying for a credit card and being turned down, back in the dayof the 1980’s, mainly because credit was hard to get. I was miffed about that because I was saving $250 a month which was like $600 in today’s dollars. I wanted a credit card because I wanted to build credit because I wanted to buy a house.

Somewhere in there I remember my father offering to co-sign something, was it a credit card or a mortgage or? Surely my parents had enough sense not to co-sign a mortgage! But I told him no, I want to do this myself, and there were those credit cards where you had money in the bank to cover them, but still paid on them, to build credit. But as it turns out I didn't need it anyway, my real estate agent said mortgages are easier to get (?) and anyway, I got a mortgage with no parental aid.

My parents helped plenty, though, paid half of undergrad and all of post grad, the latter only 3 semesters at a state school.

I started out in adult life with no debt—my car was paid for (I had bought it myself) no school debt, and $1,000 launch gift from my parents. That was a ton of money then! By then my own bank account was exhasuted from going to school and not working. I used that money for apartment deposit and banked the rest, and it was the beginning of my wealth building activity.

[JaneV2.0]

I didn't get any help, but state college was easily affordable back then, and I worked my way through. I did get a small inheritance thirty years later. I guess I'm a self-made woman. :cool:

[Teacher Terry]

WS, can’t your son move to a bigger area and work for a bigger company? My ex had a master’s degree in math and made more money as a tool and die maker than he could using his degree. He worked weekends often for time and a half and double time. Supported 5 of us and paid cash for my 4 college degrees. Plus we saved money. Small shops pay nothing and DH never worked at one. He drove daily from Kenosha to Milwaukee for work. Housing cheap in Kenosha (still is). If I remember right he lives in small town Wisconsin.

[ApatheticNoMore]

The toilet broke, so roomate said “we need to call a plumber.” Dd bought an $8 part and fixed the toilet.

i struggle to understand this too, you are renters, why don't you just contact the landlord or manager. Even they would probably prefer this than to have ever tenant suddenly decide they are into DIY.

[Chicken lady]

ANM,

yes, ideally as a renter you call the landlord when something breaks and he fixes it.

practically - as a young woman renting one of the two notably worst places in a nice neighborhood, whose landlord owns multiple properties throughout the city, including the one next door which is in worse shape than yours, if you want a working toilet this week, you either fix it or get it fixed and then argue with the landlord later. Dd is just as capable of fixing a toilet as she is of closing a window.

[Teacher Terry]

When we had rentals we didn’t want tenants fixing things themselves but we did fix things promptly.

[Ultralight]

Seems like many of us are not as "self-made" as we might like to think we are. ;)

[Ultralight]

It's so hard to keep things "equal" when you have several children. I had it in my head that I wanted to give a certain amount of money to each kid, for their choice of either a wedding or a down payment on a house. College education had already been taken care of for 3 of the 4 that went to college. So, do I give MORE to the kid who DIDN'T avail himself of a free undergrad education paid for by Mom and Dad? Do I give LESS to the kid who chose a private liberal arts college over the state school that her brothers went to? (And which I am STILL paying off?). It gets a bit complicated.

My grandfather gifted me a college education. My extremely generous MIL gave us the down payment on our house out of the money she inherited from her mother. But I have never asked for the money. I consider myself to be pretty independent and resist taking help from anyone. Maybe that's simply a personality trait rather then not being a product of indulgent parenting. My parents certainly weren't indulgent because they couldn't be--they had no money. Im sure there are many factors at play.

So I have on my wall in NJ a "I will retire when...." slip of note paper with several things listed on it for me to check off. This little goal I have for my kids is one of those things.

Have you read MND? It will illuminate some of the topics you are touching on.

[Ultralight]

Reasons I think follow the manner of assistance....loans and the need.....immediate. He did not want to go to college so that whole snowball never got rolling. He went to a job skill school that placed him in the tool and die industry. But the owners of these tool and die shops both reap the profits and pay themselves three digit salaries while they pay their workers below living wages, skimpy benefits and no retirement plan.

Then he married early in life due to an unplanned pregnancy of a girlfriend. His first vehicle purchase I insisted he sign his own loan for. If I had co-signed he would have paid a much lower interest rate. But I refuse to co-sign anything for anyone. I still feel a bit guilty about that, but when he divorced and got screwed with the car that was underwater several thousand dollars, I bailed him out and got him into a car he could afford on a monthly payment.

He has no plans for retirement, no active preparation, lives day to day and has no savings. I subsidize his phone bill and car insurance by paying for it myself because I have the savings to pay the car insurance on an annual basis which is cheaper than monthly. And I can get him cheaper telephone service on my plan. He pays me back a monthly agreed upon amount.

It all is is based on my belief that in the future....he’s going to need to keep coming back to me for assistance while the other two are independent. But, my resources are not without limitation and anything I give to my children I take from my buffer against personal financial hardship.

The MND has a section called "Weakening the Weak." It is worth read the book and that section especially.

[iris lilies]

Seems like many of us are not as "self-made" as we might like to think we are. ;)
I am super dooper middle class with all of the cushion that implies. Have never claimed to be anything else.

But I can save money like a MF and my parents were happy about that. My mother used to urge me to “let loose, spend some of that!” Hahah. And one time I went on a shopping trip with her and bought a coffee table because, ya know, your house has to have a coffee table she said. Ugh always hated that coffee table. News flash: one’s houses does NOT need tomjave a coffee table and we dont have one today.

I remember thinking, when she urged me to spend some of my stash, whot, you want me to be a bag lady!!!???

[Ultralight]

Getting kicked out of my parents house in high school taught me that I had to work to pay all my bills.

But man, that student loan blind spot of mine. That is what really zinged me! haha

[Chicken lady]

My heart daughter believes (believed?) in self made people. At one point she owned a twelve year old car and two trash bags of clothing and books. The car was also her house. She was too stubborn to take anything from anybody (I also think there were some deep seated issues about “deserving” things) she had a lot of very hard years, during which we helped her as much as she would let us.

and then finally she got in a tough spot, and she had a kid. And she looked at the kid and she took a deep breath and came to me and said “I need to borrow $900.” And I said “sure thing. You want a check now, or cash tomorrow?” And she said cash, because she didn’t have a bank account. And she cried.

it’s been 7 years. She has learned that it’s ok to let me hand her groceries or front the power bill now and then. We were able to cover a semester of tuition, and I think we were the proudest “parents” in the room at her graduation. She has a master’s degree, and a house (and a mortgage) and a new very old car, and a job that disqualifies her for government services and provides benefits.

anybody who doesn’t need help sometime is pretty lucky. And I think a lot of people think they didn’t need it because it was early, pervasive, and normal.

but if your kids actually need help and you can help them, I think you do.

[Ultralight]

My heart daughter believes (believed?) in self made people. At one point she owned a twelve year old car and two trash bags of clothing and books. The car was also her house. She was too stubborn to take anything from anybody (I also think there were some deep seated issues about “deserving” things) she had a lot of very hard years, during which we helped her as much as she would let us.

and then finally she got in a tough spot, and she had a kid. And she looked at the kid and she took a deep breath and came to me and said “I need to borrow $900.” And I said “sure thing. You want a check now, or cash tomorrow?” And she said cash, because she didn’t have a bank account. And she cried.

it’s been 7 years. She has learned that it’s ok to let me hand her groceries or front the power bill now and then. We were able to cover a semester of tuition, and I think we were the proudest “parents” in the room at her graduation. She has a master’s degree, and a house (and a mortgage) and a new very old car, and a job that disqualifies her for government services and provides benefits.

anybody who doesn’t need help sometime is pretty lucky. And I think a lot of people think they didn’t need it because it was early, pervasive, and normal.

but if your kids actually need help and you can help them, I think you do.

Ms. Buck taught me to read. Ms. Stickney taught me to like it. My dad taught me to come up with a plan and execute it. Martial arts taught me some self-discipline.

I am not self-made. Who is? Right?

[jp1]

My mother used to urge me to “let loose, spend some of that!” Hahah. And one time I went on a shopping trip with her and bought a coffee table because, ya know, your house has to have a coffee table she said. Ugh always hated that coffee table. News flash: one’s houses does NOT need to have a coffee table and we dont have one today.

Your mother is/was very different from mine. When I went to visit my parents sometime around age 30 I borrowed their car to go visit friends. I'd gone through a fast food drive through window and my change was $.04. I tossed the four pennies in the tray space on the dashboard. The next day my mother handed them to me and told me that every penny counts...

And my entire childhood we did not have a coffee table. But somehow I lived. SO and I do have a coffee table but we got it on super double special sale at Ikea for $15. The legs started breaking off the first time I tried to drag it aside so I could vacuum under it because...Ikea. 12 years later we still have it. Instead of sitting on the original legs it sits on two of the $20 Target pods that used to make up our living room credenza.

[iris lilies]

Oh, my mom was proud that I was frugal and could save money. She just liked to needle me now and then about my riches.

[catherine]

Wow, very creative use of materials, jp1! You could even throw a couple of cushions on the floor and eat at the coffee table Japanese style!

[jp1]

Wow, very creative use of materials, jp1! You could even throw a couple of cushions on the floor and eat at the coffee table Japanese style!

That's exactly what SO does! I personally sit on the couch and crouch forward.

[Float On]

Very pretty jp1.
Our coffee table is DH's great-grandmother's old trunk. I love it...plus it holds my out of season clothes and some Christmas china and glasses.