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If money wasn't an issue..


Wilbur

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Depends.   I'd definitely be more inclined if they were otherwise hard working kids and this house would be a blessing to them. Not having a house payment (or having a smaller one  even if I just helped with the down payment) would give them a big financial advantage.  I'd evaluate if they'd use that extra cash each month to help save for their own retirement, pay off debt like school or medical expenses, or save for their kids education.  But first I'd make sure the house was appropriate for them and that they could afford the ongoing taxes, utilities etc. 

However, if the kids were not working hard (not necessarily at a job that paid well, just not choosing to work full time), or I was afraid that even if I bought the house, the upkeep would be a financial struggle.

My parents helped each of their kids at various times and I don't think any of us ever took it for granted or wasted their money. I would want to make sure anyone I gave a big financial gift to would do the same, and that I was giving it in a way that would be helpful to their lives.

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34 minutes ago, Kirby said:

Depends.   I'd definitely be more inclined if they were otherwise hard working kids and this house would be a blessing to them. Not having a house payment (or having a smaller one  even if I just helped with the down payment) would give them a big financial advantage.  I'd evaluate if they'd use that extra cash each month to help save for their own retirement, pay off debt like school or medical expenses, or save for their kids education.  But first I'd make sure the house was appropriate for them and that they could afford the ongoing taxes, utilities etc. 

However, if the kids were not working hard (not necessarily at a job that paid well, just not choosing to work full time), or I was afraid that even if I bought the house, the upkeep would be a financial struggle.

My parents helped each of their kids at various times and I don't think any of us ever took it for granted or wasted their money. I would want to make sure anyone I gave a big financial gift to would do the same, and that I was giving it in a way that would be helpful to their lives.

Sometimes for parents it's hard to be objective ie. to assess if child is hardworking, etc. vs. not trying hard enough to get a better job (especially if child already has a range of good skills), if it's affecting child negatively.  I've always said often...if you can't find a job locally and you don't have children, consider another part of the country.  Of course most people don't want to hear it.  It's even harder if they've grown up, gone to school, etc. their whole life in same area.

My parents never had enough money to give any of us substantive down payment. Instead it was buying a small piece of furniture or having some rooms repainted. That was good too.

For wealthier parents it is a way to pass over abit of moolah for something practical...as a gift while still alive and see how it's put to use. Instead of taxed after death. 

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20 minutes ago, shootingstar said:

Sometimes for parents it's hard to be objective ie. to assess if child is hardworking, etc. vs. not trying hard enough to get a better job (especially if child already has a range of good skills),

Oh man this is a loaded statement…. So my question to you is better for who?  The parent as they have hopes & aspirations that are not being met or the child who is perfectly happy doing what they are doing even if the parents don’t agree?

For my kids yes, I would but I know parents who probably shouldn’t.

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33 minutes ago, shootingstar said:

Sometimes for parents it's hard to be objective ie. to assess if child is hardworking, etc. vs. not trying hard enough to get a better job (especially if child already has a range of good skills), if it's affecting child negatively. 

 

I wasn't intending to evaluate reasonable life choices, but was thinking more about a coworker whose son doesn't want to work more than 2 days a week because he prefers gaming and his late night gaming sessions interfere with "regular" work hours.  I don't think I'd be paying for a house for him.   If a kid wasn't working due to medical or psychological issues, that's a completely different story and I'd try to find the best way I could to help then.

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35 minutes ago, ChrisL said:

Oh man this is a loaded statement…. So my question to you is better for who?  The parent as they have hopes & aspirations that are not being met or the child who is perfectly happy doing what they are doing even if the parents don’t agree?

For my kids yes, I would but I know parents who probably shouldn’t.

If the child really is struggling in a job that is not paid enough for their skills, is draining their energy, is not happy, then the child is unwillingly to change to get themselves out of rut.  Most of us have been there....some people longer in the rut than others. It's a tough one.

For instance, I have a sister who has been a receptionist and patient intake clerk at a hospital for last 30 yrs. in a major pediatric hospital on the oncology floor.  Before she worked in a clerical posiiton for a medical laboratory where they did daily patient blood tests, etc.  She has a university degree in biology...

However her job she likes and gives her purpose. I think she has a good personality for it.  She lives the simplest life compared to other sibs.  She does have a semi-detached home and lives frugally, works consistently.  She works hard to pay down mortgage. She's single, no kids.  My parents gave her some money. We have no problems since she also helps care my mother.

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3 minutes ago, shootingstar said:

If the child really is struggling in a job that is not paid enough for their skills, is draining their energy, is not happy, then the child is unwillingly to change to get themselves out of rut.  Most of us have been there....some people longer in the rut than others. It's a tough one.

For instance, I have a sister who has been a receptionist and patient intake clerk at a hospital for last 30 yrs. in a major pediatric hospital on the oncology floor.  Before she worked in a clerical posiiton for a medical laboratory where they did daily patient blood tests, etc.  She has a university degree in biology...

However her job she likes and gives her purpose. I think she has a good personality for it.  She lives the simplest life compared to other sibs.  She does have a semi-detached home and lives frugally, works consistently.  She works hard to pay down mortgage. She's single, no kids.  My parents gave her some money. We have no problems since she also helps care my mother.

But the question still remains, better for who?  I’m assuming we are referring to adult children & if they were stuck in a dead end job that doesn’t bring them joy maybe releasing them of the financial burden of a mortgage or rent will help them move on?

I’m really just saying is in the context of the question,  I wouldn’t not buy my kids a house if I could because I wasn’t satisfied with their career choices.  Certain life choices like drugs, alcohol or gambling sure I wouldn’t do it.   If they were an herbal spirit channeler and happy doing it sure…

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19 hours ago, Wilbur said:

Mine.

I don't think I would.  I might be willing to make a solid down payment -- maybe something that would allow them to perhaps be in a bigger or at least more desirable place at a normal house payment price.  But otherwise, you risk the sense of entitlement.  It would be a nice thing to do to give your kids that security -- but as Air mentions -- without skin in the game -- they'll just take it for granted.  I think that's just human nature.  But I like the idea of maybe putting down a 1/3rd of the price or something.  But make them earn the last 2/3rd.  The favor you are doing them is allowing them to live in a nicer place at an affordable price.

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On 6/19/2021 at 4:37 PM, Wilbur said:

Would you buy a house for your kids? 

It would depend on whether freeing them of a house payment allowed them to pursue a longterm business opportunity or some other worthy place where they'd need money.  Otherwise, I think @Dottleshas the right idea: a down payment that helped them get a nice house.

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I’m giving my daughter a few thousand towards the down payment. I don’t think I’d buy her a house unless I was crazy rich. But I’d probably give more.  She’s  almost ready to buy, so it’s been frustrating watching the market go wild while she’s trying to assemble a down payment. 

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My son-in-laws parents did that for him so own the home free and clear. While nice, they also feel guilty. All their friends have mortgages they struggle with which impacts what they do together. Have to throttle down activities to not stress them. They don't have a mortgage, which in Switzerland is significant, so they have no qualms about about thaking a trip with what would have been the mortgage budget, but also don't want to flaunt it.

Actually, I was the same way when lived in England on American (military officer) pay. True, I had a mortgage that I calculated to meet my housing allowance, but among myself and other officers, we had to be careful not to flaunt the British/American wage difference among our British neighbors.

In terms of my son, I didn't give him monetary assistance - but did give him technical assistance and physical assistance getting the home ready. I think my mother did give him about $40k. (For my mom, money isn't an issue.) That brings up another issue as you have to be careful how a sudden lump sum "gift" is handles. Mortgage underwriters will look at 3 months bank statements and if they see a large deposit - even if described as a gift from parents - they assume the worse and consider it a loan they have to pay back to the parents. Using it for the down payment is even worse as it reflects you didn't have it to make the stated down payment.

Daughter's home is a non-issue as he owned it prior to their marriage, and while they may be looking for a home with a yard for their son to run around in, at least their townhome ha appreciated to cover at least 90% of it. 

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On 6/19/2021 at 2:37 PM, Wilbur said:

Would you buy a house for your kids? 

Absolutely - or, rather, EQUALLY & absolutely.  Ie: if I had three kids, all would get the same level of support in buying a house and/or distribution of gifts.  This would include wedding costs, car costs, college costs, training costs, or other significant other gifts prior to a house.  It doesn't have to be a 1:1:1 for each child, but darn close. 

IOW, absolutely give your kids the gifts of your hard work, but, and I assume you already do this, be fair and play no favorites.

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On 6/19/2021 at 9:18 PM, Wilbur said:

Mine.

With your wife or with others?  How many total?

Ok, I didn't read all the responses yet, but I would say that it depends.    if they are wild party folks and addicted to smack, no, but I am sure yours are good people.  Struggling sucks and can add huge pressure and unceasing burden to life, if they are having housing struggles, maybe offer to pay the downpayment or make some random payments?  If you are planning to die (you aren't planning on dying soon, are you?) and if Canada has estate taxes, then parsing that out in the form of homes makes sense.  The security that owning a home gets you is real, and that is a gift someone would never forget.  It also sets them up to make good financial choices and less apt to make necessary and often disadvantageous choices out of need.  If you can swing it, you can help make sure your kids will inhabit the landed gentry segment rather than perpetually being on the outside looking in.

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I would not have wanted my parents to give me a house or a car or anything else of large monetary value.  I wanted to make my own way in life.  My first car and my first house meant a lot to me because they were the result of my own efforts and desires.  I can't imagine ever enjoying living in a house that my father paid for.  

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14 minutes ago, Road Runner said:

I can't imagine ever enjoying living in a house that my father paid for. 

People do that all the time when their parents die, though, somebody inherits if assets are owned.  I think you aren't alone in that thought pattern, but the relative amount it takes to even buy a hovel now vs. even 20 years ago is off the charts in most places.  I think things have changed to more fully favor the entrenched (or at least the partially entreched), but opinions aren't wrong and you have valid points to consider, also.

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22 minutes ago, Road Runner said:

I would not have wanted my parents to give me a house or a car or anything else of large monetary value.  I wanted to make my own way in life.  My first car and my first house meant a lot to me because they were the result of my own efforts and desires.  I can't imagine ever enjoying living in a house that my father paid for.  

While I agree, a person who earns an asset appreciates it more, the current trend of asset management companies snapping up residential properties, is driving prices through the roof and making them unattainable in some markets.  Home ownership isn't everything but it does tie you to the market. 

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2 minutes ago, Randomguy said:

People do that all the time when their parents die, though, somebody inherits if assets are owned.

It is also common that people with significant estates set up wills and trust funds to distribute the money at a later time in their child's life, so as not to negatively impact their child's initiative and desire to succeed on their own.  

BTW, if you give large sums of money to your children or items worth large sums of money, you may want to investigate the tax laws in your state and country before proceeding.

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8 minutes ago, Randomguy said:

People do that all the time when their parents die, though, somebody inherits if assets are owned.  I think you aren't alone in that thought pattern, but the relative amount it takes to even buy a hovel now vs. even 20 years ago is off the charts in most places.  I think things have changed to more fully favor the entrenched (or at least the partially entreched), but opinions aren't wrong and you have valid points to consider, also.

As an adult, I bought all my own stuff - cars, homes, vacations, wedding, etc.  On the other hand, as a kid, my parents paid for my first cars, insurance, and eventually college.  So, I was pretty much in good shape going into "being an adult" since I had a degree, no real debt (credit cards from spending at college and just after graduation, though), and I knew how life "worked".

Now, as we look at a nice inheritance from my FiL, we would much rather have had him around for another decade than the pile of cash.  Cash is great (no complaints), but no longer what we need.  My dad died a couple years ago, but his stuff passed to his wife, and she may live a long time, so unlikely to see anything from that part of my family.

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6 minutes ago, Wilbur said:

While I agree, a person who earns an asset appreciates it more, the current trend of asset management companies snapping up residential properties, is driving prices through the roof and making them unattainable in some markets.  Home ownership isn't everything but it does tie you to the market. 

I was hearing it wasn't really the asset mgmt companies or similar being the main driver of the surge in prices, but it may be different in Canada.  From what folks down here say, it is driven by 1) low interest rates, 2) low inventory (affected by COVID), 3) FOMO action/reaction, and 4) reassessment of needs (also COVID related).

Inventory really seems to be driven by the challenges of building with reduced workforces and materials in the past year, and then also a moratorium in many places both on eviction of renters, and also foreclosures. 

A few things can happen that really shake things up - rates go up, mortgages become more challenging to get, evictions return, and folks go into foreclosure.  Each of those will throw more properties into the market and/or make it less easy for prices to jump dramatically.

Bubble?  Probably not.  Overheated and a high water mark? Likely.

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Are you guys still going on about this stuff? Wilbur says, "OMG, I got too much money. Should I give it to the kids or not"? And you guys just play along like, "We can totally understand that". Anybody got too many KitKat bars and don't know what to do about them?

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My two youngest both make more than we do, they should pay off OUR house.  My eldest is a teacher, so not making a lot, but she bought her house about 6 years ago for about $230K, the neighborhood went nuts, the house next to hers just sold for $750K - as a teardown.  She's doing OK, house-wise.  Not to mention neighbor-wise, no more drug activity next door.

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1 hour ago, donkpow said:

Are you guys still going on about this stuff? Wilbur says, "OMG, I got too much money. Should I give it to the kids or not"? And you guys just play along like, "We can totally understand that". Anybody got too many KitKat bars and don't know what to do about them?

1. There is never "too much money".

2. I am asking for a friend. 

:) 

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