Children and troubles ahead...

[CountHigh]

We are, of course, all bringing up balanced, well-behaving, talented kids, who easily find their place in society. They hug us on their way out of the door and, in tears, thank us for everything we have done for them during their formative years before disappearing from our spreadsheets (but surely not from our hearts). Having just tucked in my offspring I started to think that statistically some of us are wrong. And it might be me. Risks that I have in mind are some of the big ones, e.g. mental or physical health, addictions, or some early decisions that just don't work out without outside help (parents). Let's face it, no matter how good of a job in parenting you do, shit may hit the fan. In some cases this might mean financial help.

Would be nice to know how many of the family (wo)men here factor in these types of scenarios or have lived through them? My first take is that it makes me feel slightly (but only slightly) better about my late projected early retirement age (still 10+ years away) as there is more information about probabilities associated with these risks coming in each year... Well, there is something wrong with that intuition, but perhaps the point is there.

Also interested to hear about your take on helping out grown-up children financially in the first place. I don't think I will be able to deny reasonable help. In some part, this feeling might come from my own parents. I have always had the feeling that my own parents have been willing to help me (I didn't need it often, but nevertheless), so returning the favor to my kids seems not only emotionally right (love and all that...) but also just and proper. My grandparents either died young or were too poor to help out their (many) grown-up children, but the following generations might start a generational altruism type of thing. But if I end up taking care of my old parents soon enough, I guess it is then "sorry-kiddo", too busy returning a favour to the previous generation...

[steveo73]

My kids are 18, 16 and 9 (well 8 but 9 soon). We intend to retire say 4 years from now and we are hopeful the oldest two don't cost us as much. We will not be able to continually help them out other than providing a roof over their head (and possible food as well) post our retirement. We will of course support our youngest until he reaches adulthood.

[7Wannabe5]

As the parent of 28 and 30 year old "children", my suggestion would be that your take on this dilemma, along with everything else to do with parenting, will change approximately every 3 years. One thing I think about when weighing such decisions is the movie "Driving Miss Daisy" and her adult child played by Dan Ackroyd. Someday the toddler you are tucking into bed might be a paunchy, balding middle-aged businessman making arrangements for your care between taking meetings and canoodling with his intern.

That said, I do still spend money on a fairly regular basis towards maintaining my relationship with my adult children, even though it is now the case that one of them will occasionally pick up the bill for brunch. Last year I took my son on a whimsical genealogical trip for his 30th birthday and this year I am throwing down change for my daughter's wedding. It's not just "helping" that you have to consider in your budget, but such expenses as traveling to visit grandchildren.

[IlliniDave]

Mine are 30 and almost 27. Things turned out laughably different than what I envisioned those first days of kindergarten when I dropped them off at school. I don't want to go into specifics, but health issues and immaturity/bad decisions have at times afflicted my kids and set them back. I also hit a bump in the road myself in the form of a divorce when the youngest was just shy of 15, and subsequently became a full time single parent for 3-4 years. Point is sometimes we wind up as single parents and there is a cost to that.

There's a fine line between being helpful and being an enabler. Unless the situation is extreme, once the kids became adults (and asserted their "rights" as adults) I tended to err on the financially uninvolved side, and that's still my approach. Time will tell if I've handled things correctly. At this juncture the state is imperfect but the trend is good.

That said, if my plan plays out anything like I intend it to, both will get a substantial inheritance. I have paternal instincts towards my family learned from my grandparents, so part of my future vision entails me having the wherewithal to "have everyone's back" should things get dire for them. That was built into the plan at its inception. In other words, my stash is a giant emergency fund for me and a couple generations of my descendants. I'll be the steward while I'm able, then likely the mantel will pass to my daughters.

7Wb5 brings up a lot of good considerations. Gifts (birthday, holiday, etc.), travel, entertainment, etc., for children, grandchildren, maybe great-grandchildren will typically be part of a person's normal budget (parents tend to insist on "paying" even when their kids are financially better off). It's not uncommon for people to relocate near their children once retired. It hasn't happened to me but a fair fraction of my contemporaries have children+grandchildren living with them. Some are raising one or more grandchildren themselves. Lots of things can wind up happening. The range of those unknowns have made me relatively conservative in my planning/outlook.

[7Wannabe5]

Caveat added would be that social expenses in maintaining relationships with adult children follow same rule of thumb as other social expenses. For obvious instance, any never-married, no kids individual over 50 who is socially interacting with anybody who is significantly younger will likely find themselves picking up the bill There's some complex equation based on factors such as who suggested the event, age, relative affluence, other economic considerations such as "networking" or cultural capital, and some degree of gender dynamics.

[Peanut]

If big problems arise one naturally wants to be able to help, whether that means money or something else.

The other stuff is just a personal choice, and not always the right one ime. Like in upper middle-class circles I've noticed grandparents contributing significantly to their kids' families. Like 10k/yr in mediocre private school tuition for multiple kids (which only covers 1/3 of the total). And they have to keep working to do it. Two generations putting the present before the future.

It's interesting, in my own life my parents were typically more generous with me than with my sibling, who until he finally made good on his career would run into financial jams from time to time. I've always been frugal, and while I accepted money being given to me, always suggested that they needn't or (after my mother was widowed) shouldn't be giving it, and I meant it. But it continues on, and I suppose I am programmed to do the same for my kids, especially if they don't need the help.

[horsewoman]

My own parents are neither in a position nor do they want/need to help us out financially a lot. BUT they are OK money-wise and have enough savings/pension to make sure none of us kids will be impacted financially by their old age. My dad raised us to be careful with money, to always live within our means and to think about consequences. I consider this the greatest and most valuable gift my dad has given us and hope to pass it on to my daughter. So she can make her own way, on her own merit, while not being burdened financially by her old parents.

My in-laws are significantly wealthier than my parents and I have noticed in 1.5 decades of being part of this family that they tend to enable their kids in bad decisions. They have been *very* involved in the financial life of their children up into their mid-twenties, to which I put a stop to pretty early in our relationship.
My sister in law continuously does stupid stuff and is bailed out again and again by her parents.
My husband has no skill managing money as well but he managed at least to marry a frugal person and stay married so far

While this of course anecdotally I cannot see any benefit in paving your children's way too much. If you never struggle in your formative years how can you be prepared for the trials of adulthood?
In Germany you have no need for a college fund (mostly free university) and I would expect my daughter to get a part-time job if she decides to get a degree. I always had side gigs and learned so much through them! So apart from 4k in a savings account (given to her by her affluent granddad) she is on her own. She can live with us as long as she wants (huge house, but she'd have to pitch in some money) but that's it I suppose.
I did some pretty stupid shit and was always able to pull myself out by my wits and own efforts, so I hope she turns out similar. My parents practiced tough love with us and it did not hurt us in the long run, so I think I'll try to follow their example when she runs into problems later on.

[CountHigh]

Interesting experiences, thanks for sharing! I guess you have already done a service to your (grown) kids, if you are able to support yourself when you are old (not always on your own hands, but still). They can then concentrate on the future. The ER mindset doesn't seem to threaten that at all, quite the contrary. The fact that many are able and willing to do more than that is a bonus, whether it is a warm place to stay (my likely scenario) or a considerable emergency fund…

Another thing that came to my mind when reading posts is money vs. time. ER people have more time to invest in helping their kids than on average. That eases my mind a bit. And that this is something that everyone struggles with (not only people aiming to retire early): how much to contribute to future generations, if you are lucky enough to face that problem. So your decision to pursue ER should not have that many out-of-the-ordinary consequences to your kids… Except having perhaps more time to help them out.

I don’t know about you, but I am inspired to think about kids growing up in an ER pursuing household. One of the things that successful ER requires is the ability to delay rewards (consumption vs. saving, free time vs. learning a skill) Parent(s) in ER pursuing households are likely to be better in delaying rewards than on average. What happens to the kids? So I googled some academic papers after people posted about tough love and “helping can turn into enabling” -type of things (on which I agree). Found some reasonable references to empirical studies that seem to suggest that parenting practices have strong effects on the child’s skills including patience and time preferences. But how to actually make it happen? Need to think this through. Help me if you have more ideas… Being reasonably able to delay rewards should also be a good way to protect adolescent kids against some big risks (like addictions and stupid behavior).

And there is this thing about frontal cortexes (https://www.youtube.com/watch?v=3RRtyV_UFJ8). They must be total beasts inside successful ERE skulls.

@7Wannabe5: Thanks for the movie recommendation!

[horsewoman]

So I googled some academic papers after people posted about tough love and “helping can turn into enabling” -type of things (on which I agree). Found some reasonable references to empirical studies that seem to suggest that parenting practices have strong effects on the child’s skills including patience and time preferences. But how to actually make it happen? Need to think this through. Help me if you have more ideas… Being reasonably able to delay rewards should also be a good way to protect adolescent kids against some big risks (like addictions and stupid behavior).

At 20 I was still learning my trade (=not earning much) and had trouble paying for my flat after I split with my boyfriend and had to move out of our shared apartment. My dad pitched in a little money for a few months so I could afford a really modest flat (hovel) until I finished my apprenticeship. I only moved to better (still modest) digs when I could afford it on my own and did not take his money as soon as I earned a better wage.
Real "tough love" would have been something like: you split with your boyfriend and are thus no longer able to afford a flat - well bad luck for you!
My dad was like: I trust that you made a well thought - out decision in moving out and I will give you some help for a short time. Full well knowing that I would not abuse his generosity. He saw that I was a) working hard and earning good grades and b) prepared to live in a real dump to save money. I suppose he could respect this and I did feel OK to accept his help because I did my part.

My parents worked a lot with delayed rewards, for example with pricier stuff - if we'd like to have brand clothing (or a TV, game console,...) we'd have to save up half of it from our allowance or Christmas/birthday money and they would pay the other half. My parents were reasonably well off so they could have afforded to pay for this stuff but they did not choose to do it.
Or with hobbies - Mm parents paid for a set amount of horse riding lessons each year (very expensive!) but it was my responsibility to get to the stable on my own by bicycle no matter what wheater. I was also encouraged to look for a horse-sharing situation (less expensive) once I was older and trained enough to handle a horse on my own. Turns out if you are reliable and sensible you will always find someone willing to let you ride their horse for free! My parents would never ever have given me a dime if I'd bought myself a horse, though!

I really try to emulate this with my kid. My parents (like all parents) made lots of mistakes but in this area, they are the best I could have asked for. I'm so grateful that they raised me to be a non-materialistic, self-dependent and thrifty person. Most valuable gift ever!

[Frita]

My son is 14 years old, so I have no reallife data to share. Since he has been little, we have raised him in an ERE-like way with increasing responsibility as he is ready. He is independent, responsible, frugal, and thoughtful. I would imagine that his go-to response with young adulting issues would be to figure out how to solve his problem, asking for advice and/or verbally processing as necessary. This is what he does now. He does not look to my spouse or myself to fix his problems or run interference.

Unless something unpredictable happens or we decide to give it all away, he will inherit a large enough sum of money to instantly fund his own ERE. He does not know this, which seems to be key in raising a kid with this lifestyle. He would be able to replicate this lifestyle without any financial support, yet be able to manage a windfall. At some point we will need to have this discussion, talking about what our actual situation is and what that means if/when we die before him.

[reepicheep]

Mom is accidentally very well-off and accidentally quite frugal.

She wanted to help my sister by giving her money, but was worried about enabling her and treating me unfairly. Mom thought she would match a percentage of income as reported on our tax returns.

For a variety of reasons (eg, sis is a musician, makes a lot of money in tips and I have basically no income to report), this was a dumb idea. I pointed out all the dumbness in a numbered list.

Mom gave up her complicated schemes and ended up transferring us both mutual funds in the 10k range.

I am a fully enabled (appreciative) mooch now. Trying not to be the sandals generation.

[NPV]

I vaguely recall a thread more directly relevant to my question but couldn't find it with some search attempts. Are there any board games recommended for teaching 6-8 y.o. kids good personal finance (FIRE) practices? I have done some reading online and:
1. Kiyosaki's Cashflow for Kids drives home the point on owning assets vs. liabilities. I would argue it may the most important lesson there is in personal finance and the one I learnt from reading Kiyosaki book as a teenager. However, apparently the game incentivises just buying all assets at any price which is of course unrealistic. The game itself is also pretty expensive.
2. Allowance seems to be more relatable for kids (starting a lemonade stand, mowing loans etc.) however the mindset seems to be more classic earn-and-spend than FIRE.
3. Payday is a classic game, but seems antiquated and hardly relatable with paper bills etc. Also while it is an accumulation game (whoever saved most wins), the mindset also seems to be more earn-and-spend than FIRE.
Another issue with all of these games is of course randomness dictating much of the outcome.

What do y'all think - any first hand experience with any of these / other games teaching kids personal finance? I have also considered teaching by example - and that is of course a good thing to do, but realistically they will not grasp much of that until they are at least in their teens, so shouldn't rely just on that.

[George the original one]

There is always the classic "The Game of Life", but it really needs updating for non-traditional ways.

[jennypenny]

I don’t know that you need a game to teach them things. Let them handle real life situations early on so they can learn as they go.

For example, if you want to teach them about money, give them a certain amount every month to buy lunch (but not enough to buy it for the whole month). Encourage them to go over the school menu and pick the days that they want to buy lunch, figure out how much it will cost, and then make them responsible for packing lunches the rest of the time. It gives them control (and authority — no telling them what they can eat!), and lets them deal with impulse buys, forgetting lunch and having to buy it, etc. Even a first grader can handle that.

Older kids are easier because they can budget for their own extracurricular activities and clothing (again, gotta then let them wear what they want). Same with haircuts. See this thread for more discussion on the topic.

I think the trick is to involve them early and often, and let them make some decisions (and then keep your mouth shut ). You just have to frame the discussions in a way that doesn’t make them fearful. Don’t say ‘we don't have enough money for X’ giving them the impression that finances are bad. Say ‘we’ve decided that this is the appropriate amount of money to spend on X’ or ‘after paying for the hotel and travel costs, we have X left in the budget for fun while on vacation — what do you want to spend it on?’ That will give them some practice managing money and help them learn that setting limits is normal and healthy.



As far as unplanned issues with kids, it happens. You do the best you can. We have a kid with CF and assumed we'd have to support him his whole life. Now he's on a new treatment regimen that has greatly improved his quality of life and completely changed his trajectory (close to normal lifespan, can go away to college, etc). You can plan all you want but some things just happen. Life's funny that way.

[Laura Ingalls]

@Jenny

That is exciting about your child with the CF diagnosis has such a good prognosis. I lost a good friend to the disease in the 1990’s. Shortly after that I worked in a pediatric clinic that treated many folks with the disease. At that point we didn’t have a lot that worked.

[jennypenny]

Thanks @LI. It's been a shocking (and welcome) development. You know how CF can permeate every aspect of life so it's weird to suddenly have that blanket lifted.

There's only so much planning you can do because life can, and will, change on a dime. (I know @LI unfortunately knows that from her house fire. ) My point was that shit happens, but good stuff does too. We just tend to remember the bad (see The Power of Bad). All you can do is be ready, and then do the best you can.