I'm going to admit to suddenly for once being jealous. In a few different ways. My cousin just bought a house with down payment help from both sets of parents. Neither of them have a good job and yet they can buy $800k home without selling their $350k condo. She's an only and I've heard that he's from a "rich" family. Some envy that they get help.
But I have recently known a lot of people who get down payment help from their families. I know multiple people whose parents gave them the down payment of $50 or $100k or more. Some are even paying/funding college for their kids.
I guess my thought is how are these parents able to give their kids/grandkids money now? I know my parents and in-laws are secure. I don't expect any help nor will we get any. But it's likely they will leave us something eventually.
I guess I'm jealous because how do people know they have enough to give to their children before death? How do they know when they are only in the 60s and 70s and in "early" retirement to know they have enough? I ponder this because I'd like to think that maybe we'll save enough to help our kids.
It's a stretch goal that we are able to pay 100% for 4 years of college, some money for a wedding/house down payment, and a car out of college. In that order I'd like to gift our kids with a leg up. I've really thought about it but we'll be in our early 50s and potentially retiring when they go off and finish college. But how will I know that I have enough? How will I be able to part with so much cash so early in our "retirement" position? Of course if DH chooses to work past 50 then I'm assuming we have a large cash flow.
But how secure do I have to be? Do I think maybe whatever our parents leave behind will be used to be passed on? I think maybe we'll get something but I could be entirely wrong. Our parents have paid for homes and pensions. But I'm not sure much cash on hand, which is understandable why gifting us with anything is pretty much nil.
But how do we get there? How do you know? Have you been gifted a substantial amount of cash from your parents or grandparents? Was it before death? If so why before? How did they know they had enough? If you got it upon death did you expect it? Was it more or less than you expected?
Giving early or later?
October 18th, 2016 at 04:22 pm
October 18th, 2016 at 05:12 pm 1476810754
October 18th, 2016 at 06:15 pm 1476814523
they bought me 3 (used) cars over the course of my teens/20s,
paid part of my college education and I took out loans for the rest,
gave me $100 per month to help out with student loans my first couple years out of college
Was loaned $12K for house down payment (I paid that one back)
my dad gifted each kid $12,900 one year out of the blue
my parents accepted a right-of-way deal on some land and split the profits between the kids--$80K for each of us
My dad has always been the main breadwinner with my mom basically just making some spending money as a babysitter. They have 5 kids and 13 grandkids. I don't completely understand how they've managed to do all this, but my parents are extremely frugal--the only vacations they ever take are driving to their rural W.V. cabin or to Ohio for family reunions. All their stuff is ancient -- furniture, appliances, clothing, kitchenware -- and they don't use smartphones or have cable; my dad finally bought a laptop a few years ago, got WiFi and subscribed to Sirius radio, and they buy a lot of DVDs but not at full price. They get takeout from time to time but never go to restaurants. My dad usually buys used cars though he did buy one new one (bare bones, paid with cash).
My dad worked until he was about 75-80, but he didn't need to. He's just a very active guy who I think was afraid he'd get bored in retirement. (He's regretting that now because he's finding tons of things to do in retirement and wishes he'd done it earlier.) He gave us that $12,900 gift (same amount for all 5 kids) before he retired because he had the money sitting in savings and didn't know what to do with it.
In short, I feel so incredibly fortunate that he's been able to do all that, but even with fewer kids and more working adults, I don't see how we'd be able to come close. Of course as a computer programmer, I imagine he made a lot more than any one adult in my family, but it still seems incredible to me.
October 18th, 2016 at 08:32 pm 1476822776
Ceejay, you got $80k and then the $12900 2x? Or just the $80k and the $12900 was part of it? Very generous gift. Those are definite gifts that can help for the future. I would hate to give it to an irresponsible child but if my kids were responsible I can see myself definitely gifting them some help if we can afford it. But how to know?
October 18th, 2016 at 08:41 pm 1476823309
October 18th, 2016 at 09:44 pm 1476827090
I'm so glad he didn't give it to us earlier than he did. I had enough sense to stash $9K of the first gift in Roth IRAs, put $1K in a CD for our baby, and pay off $2K of debt.
The $80K I used about half to pay down debt, $15K for taxes and $8K for charities, $14K for living room and dining room renovation and furnishings, $3K for necessary bathroom repairs, and $1K to visit my parents. All much-appreciated stuff to get our lives back in balance after our home purchase and selling the condo at a loss, which stretched us really thin.
October 18th, 2016 at 10:44 pm 1476830664
October 18th, 2016 at 11:04 pm 1476831861
October 18th, 2016 at 11:19 pm 1476832792
October 18th, 2016 at 11:22 pm 1476832932
October 19th, 2016 at 11:02 am 1476874953
October 19th, 2016 at 12:49 pm 1476881345
You will know when you have that kind of money to give. If it's well within your withdrawal rate. I don't know anyone in our families spending down principal. They could easily afford substantial gifts, sticking to a safe withdrawal rate.
My parents didn't even help me with college. I appreciate the ability to "give like no one else" with their approach. It's the put your own oxygen mask on first principle. I never imagined that my parents (who couldn't even help me with college) would be in this financial position just 20 years later. If we inherit even a fraction of it, we are thinking about starting a charitable foundation. (I will very likely inherit all of it). & the thing is we had every advantage my parents never had so I have no doubt we could build up the same wealth for ourselves. I agree very much with CB's sentiments. I think it means a lot more to us what we have been able to do on our own.
That said... My bff and dh are the most financially sensible peers I have ever met. & they were handed a lot by their parents. So I don't personally have any issue helping my kids more. I don't think that alone would take anything away from my kids, given the bigger context of "teaching them to fish" and to not expect any handouts. As clearly evident by people like my bff and my dh. (My husband saved for a home since he was 15. My bff lived in the ghetto for like 10 years until she could afford a nice condo in San Francisco in a wealthy neighborhood. I think she is completely insane, but you know, both worked *very hard* for what they have. Far more than anyone else I ever met our age. & my kids are clearly of the same ilk, so I think it would be difficult to spoil them). I am just not going to help my kids unless it makes financial sense for us. I'd say that my dh and I fall somewhere in the middle of our parents. I don't mind helping a little with college. He'd rather wait until he is in a position like my parents before he starts thinking about handing money to his kids or helping substantially. We are completely on the same page.
October 19th, 2016 at 11:54 pm 1476921250
But they helped us in other ways. I saved money to buy a used car and my grandfather, an auto mechanic, found a mechanically sound car for me and my grandmother made it spotless. It was a Ford Maverick.
Both grandmothers left us an inheritance and my mother did as well, which was not expected since I thought she would live for years longer than she did. I would rather have the extra time with my mother than the money.
October 19th, 2016 at 11:58 pm 1476921486
He has already given his niece many thousands of dollars to help her with the downpayment of her house, for a new car, various home improvements, etc. I think he would like to see her enjoy all the benefits.
October 20th, 2016 at 01:37 pm 1476970662
My in-laws also started giving us $10k per year. I am not sure how sustainable that is, but it's been a couple of years.