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can money ruin kids?

February 22nd, 2022 at 02:13 am

Something my DH and I are going back and forth with.  Can money ruin kids?  Will giving our children money or gifting them say free college, potentially a car, house down payment, or even a trust fund? 

I get that if you have tons of money that it's okay.  You can afford it.  You can afford to do something without impacting your own future.  That perhaps you are doing it to avoid future taxes.  But should you? I asked that question because I hate the idea also of paying taxes.

But at the same time I worried does giving our kids so much mean that we might ruin them?  Will they not learn the value of money?  Will they assume that everything in life is easy?  Will they expect everything in life asap because they never have to work for it?  

Or do we have to force them to have skin in the game?  Do we withhold everything and make them succeed on their own?  Is it really necessary? 

Has it been necessary for DH and I?  We were super fortunate in everything.  Everything has just broken our way.  Yes we are super fortunate and lucky but we did also make our luck by taking calculated risks.  But because we made some of our good fortune, we're honestly living the american dream. 

We've turned a corner and now the starting point for our kids is just so much higher than what we had or expected.  And because of it their starting line is so much further ahead.  They are where so many people we know started.  It's hard to explain but the help parents give children to start make such a big difference. 

Imagine never having student loans, car loans, or saving for a house.  Imagine not paying for vacations or saving for college for your own kids, or even saving for retirement.  Imagine knowing that you can choose the career you want and live where you want because you aren't worried about money.  

But knowing all of that does it ruin you?  Does it prevent you from working as hard or being as ambitious, frugal, or savvy?  DH and I had a date night last week and struggled with these questions.

We've hit a point where we might be able to do this for our kiddos.  But should we is the question I raised?  Right now truthfully I know my kids are going to be ridiculously well prepared.  Even I give them nothing my mom has continually mentioned disinheriting me and giving it straight to my kids.  So I know I probably am not getting her "house" but she's going to give the kids $200k each at a minimum.  I'm not sure that's enough to ruin them but that's not everything either.  But if DH and I give them more?  Will it be ruinous?

6 Responses to “can money ruin kids?”

  1. ceejay74 Says:

    I don't hate the idea of paying taxes, so I wouldn't do something I wasn't sure was right just to avoid them. We may end up having kids that are better off than we were growing up, so I think it's just important to develop their character so they recognize they're being handed an advantage and that they don't look down on those who start out with less, rather they should try to help out those with less.

  2. LuckyRobin Says:

    You could set up trust funds with stipulations. I'd do a medical trust fund that can be tapped for extraordinary medical bills that insurance won't cover, like tapping out on cancer treatment, a baby in the NICU, for rehabilitative therapy after a car accident or stroke, or for premiums for insurance if a job is lost or whatever rules you want to set. And it can be a trust used for them or their children or grandchildren and so on. Because medical debt can destroy you and blindside you.

    Pay for most of college, but make them pay $2000 a year, which can easily be earned in a summer, and require at least a 3.0. If you want to buy them a car, do not get them a brand new car, get them a $5000 to $10,000 car, $2000 of which they have to pay for themselves and make them pay for their own insurance or whatever your insurance goes up by for having them on your policy. Don't buy them a house, but contribute $100,000 if you can afford it towards a down payment. I'd say $50,000 in most areas, but you live in a very high COL area. Set an amount you will contribute to their weddings, but don't pay for all of it and if you can convince the in-laws, don't let them pay for all of the rest of it. The kids should contribute.

    Make them get jobs when they are old enough, even if only summer jobs, so they establish good work ethics.

    But don't by shy about taking them on big family vacations when they have kids, especially in other countries when it is safe. Take all the grandkids to Disneyworld or Disneyland. Help fund a start-up for one of them if it looks like a good prospect. Use your discernment.

    So help where you can, but make sure they do their part.

  3. mumof2 Says:

    I think yes you can spoil them if you have the money to...but I think like luckyrobin said they need to learn to help out in the purchases of if they want a nice reliable car then say this is what we are contributing you need to pay anything over that...give them a downpayment on a house but let them work at paying it off...I think they appreciate it more when they have worked for it...look at some rich kids who get everything they want or don't have to work for..they have no gift them or help them out just don't hand them everything, I really think they would appreciate it more...our kids use to have to help those less fortunate at least once a month because they had everything they needed and they are both compassionate women who still do a lot for charity no matter how little they have...

  4. VS_ozgirl Says:

    Will giving them things benefit them and how? For example the housing market in Australia is so high now that they are telling new parents to set up investments/save regularly in the same manner that American parents save up for college funds because otherwise kids simply won’t be able to buy a property. I think as long as you feel good about the purpose of whatever you give them it’s not ruining them. If you are saving them from struggling it’s not spoiling them it’s just helping them out.

  5. CB in the City Says:

    I think you have posed a very good question. I'm afraid I see a lot of entitlement and careless wastefulness in people who have been spoiled by their parents. And a lot of character and empathy in people who have had to make their own way.

    I guess you have to figure out where the line is between helping and spoiling, and always educate your children about the struggles of others.

  6. LivingAlmostLarge Says:

    Interesting points. But LuckyRobin, I was leaning to nothing. Then if something did occur We would just cover it. Would I squabble if my kids needed medical care? Nope. But does it need to be given to them? Or can it be something I just give when and if needed.

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