I was responding to a short article request from a large newspaper, but when I emailed my reply back to the individual requesting it, I discovered the individual had left the company. So, I have decided to post the question and my short answer here on my blog.
Parents should ask themselves a couple of questions first, “Will this assistance put us in financial difficulty?” If no, then ask the next question, “Is my kid responsible with money?” It may be a good idea if the first question is a “No” and the second question is a “Yes”. If the answers are reversed then it will be a complete disaster for the parent’s retirement and often ends worse for the child as well. Years ago, I oversaw a couple of parents that paid the mortgage down payment for an irresponsible child (parents definition not mine) and the child kept taking out equity to spend until they eventually lost the house. I’ve also seen where parents that gave a down payment as a wedding gift to a responsible child, years later, unexpectedly received it all back plus more in a thank you card. Had the first parents left the irresponsible child to renting then it might have saved the child from a mortgage default on their credit report. “As I say often to parents, What are the intents and likely results?” Until next...
3 Comments
Pat
3/11/2018 10:09:42 am
We helped pay down our kids mortgage after they were married for 10 years. Both are very hard working young adults trying to raise young families. It also allowed us to share our hopes for the their financial freedom by doing this. We sent the check directly to the mortgage company and explained that this gift was not only for them but for our grandchildren.
Reply
4/4/2019 06:17:14 am
If I were given a chance to be asked about this, I guess I would not let my children pay anything. As long as I can do the responsibility and do everything for them before I pass away, I would. However, my children were responsible enough and has their own initiative to do things like that. I am very thankful that I do not have a child who does not care about the expense and do everything on his irresponsible way. Many children nowadays do not value the money and the hard works their parents did for them.
Reply
Leave a Reply. |
AuthorJohn Hamel is the Managing Member of Austec Wealth Management, LLC. helping current & retired business owners optimize relative to their company value and personal life. Archives
April 2020
|