Author Topic: 25 is the new 21: Ridiculous parental subsidies  (Read 18379 times)

galliver

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25 is the new 21: Ridiculous parental subsidies
« on: October 15, 2014, 11:56:53 AM »
http://www.theatlantic.com/business/archive/2014/10/25-is-the-new-21/381421/?single_page=true

It's not that I disagree with the concept; I was on my dad's health insurance till yesterday and I am grateful for it, my parents subsidized my phone plan pretty heavily (I paid the  $10 additional line fee and $25 for data, not my full fraction of the family plan like I expected). I know they would have helped me with rent or groceries if I really couldn't make it. A car if I really, truly, needed one.

No, the point is that the examples are ridiculous.

Quote
Emma is earning $12 an hour at a 30-hour-a-week job. Her take-home pay, after taxes, is $1,235 a month. Meanwhile, her total monthly expenses hover around $2,000. This includes the cost of a basement room she’s renting for $500 (about as cheap as you can get in San Francisco, one of the most expensive cities in the country), food, clothing, gas and maintenance on her car, entertainment, and incidentals.

The only reason that she’s not falling into debt is because my husband and I help her financially. We provide $200 in cash each month, as well as covering her car insurance and cellphone (she’s on the family plan), and occasionally I take her clothes shopping and spring for a haircut and mani-pedi. We also pay her student loans, as it was always part of our financial planning that my husband and I would pay for her college education.

Emma also remains on our family’s health insurance, and probably will until she turns 26, as the Affordable Care Act allows. What’s more, her grandparents are pitching in, too. My mother has decided to give Emma an additional $300 a month for a full year as a graduation gift, with an eye on helping her get settled in life. Her father's parents bought her a used Honda so she wouldn’t face a monthly car payment.

Or this. She *HAS TO* get her nails done!
Quote
Another friend, whose 23-year-old works for a wealth management firm and earns a mid-five-figure salary, says she and her husband still pay their daughter’s car and health insurance and have kept her on the family’s cell phone plan.

“She makes a good salary, but rent and expenses are high,” the mom says, adding that her daughter’s job requires that she look professional. “She has to dress well, get her nails done, and drive a reasonably nice car.”

This reads to me as a case of not wanting/letting a child's standard of living to drop from the parents UMC habits to where they could reasonably expect to be at that point in their life. Makes me glad I was raised to enjoy a relatively simple life :)

sheepstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #1 on: October 15, 2014, 12:11:32 PM »
Thank you! I saw this on facebook and wondered if it had anyone else chuckling. Honestly, the Atlantic publishes so much stuff like this, it's like the new nytimes of 'you can't get by on 6 figures these days.'


Quote
“She makes a good salary, but rent and expenses are high,” the mom says, adding that her daughter’s job requires that she look professional. “She has to dress well, get her nails done, and drive a reasonably nice car.”

This reads to me as a case of not wanting/letting a child's standard of living to drop from the parents UMC habits to where they could reasonably expect to be at that point in their life. Makes me glad I was raised to enjoy a relatively simple life :)

Plus if some kids are being subsidized to look "professional" that raises standards for all young people.

related: Betrayed: 26-year-old's parents told her she'd have to buy her own plane ticket home to Thanksgiving this year.
« Last Edit: October 15, 2014, 12:13:59 PM by sheepstache »

gimp

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #2 on: October 15, 2014, 12:35:59 PM »
Quote
Honestly, the Atlantic publishes so much stuff like this, it's like the new nytimes of 'you can't get by on 6 figures these days.'

It's a populist rag. Who is the target market? ("If you're reading it, it's for you.") People precisely like 'Emma' - overeducated, underemployed, "liberal" (blindly votes democrat and parrots lines from The Atlantic), not terribly smart, not very wise, waiting to be "discovered" (be given the career of their parents for free, ignoring the years of work it took them to get their position)... a more polite way of saying "a failure". And the parents of people like 'Emma.' Normalizing failure, normalizing subsidizing failure, and selling manufactured outrage against them (whoever them is today.)

And wisely publishing things outrageous enough that they can sell manufactured outrage against the manufactured outrage - very sneaky. People like you ("If you're reading it, it's for you") who will click the article to argue against it instead of nod along.

Beric01

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #3 on: October 15, 2014, 12:42:32 PM »
Quote
Honestly, the Atlantic publishes so much stuff like this, it's like the new nytimes of 'you can't get by on 6 figures these days.'

It's a populist rag. Who is the target market? ("If you're reading it, it's for you.") People precisely like 'Emma' - overeducated, underemployed, "liberal" (blindly votes democrat and parrots lines from The Atlantic), not terribly smart, not very wise, waiting to be "discovered" (be given the career of their parents for free, ignoring the years of work it took them to get their position)... a more polite way of saying "a failure". And the parents of people like 'Emma.' Normalizing failure, normalizing subsidizing failure, and selling manufactured outrage against them (whoever them is today.)

And wisely publishing things outrageous enough that they can sell manufactured outrage against the manufactured outrage - very sneaky. People like you ("If you're reading it, it's for you") who will click the article to argue against it instead of nod along.

This. There's two types of people who read these types of articles:
  • Those who agree that getting by on 6 figures is hard, and are very happy to finally see an article saying so for once.
  • Those who think it's ridiculous to need 6 figures just to get by, and are outraged by the article. They then go to the comments to express their outrage.

Both groups are engaged readers (but particularly the latter), making the article publishers even more money in advertising dollars.

La Bibliotecaria Feroz

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #4 on: October 15, 2014, 01:14:55 PM »
The Millionaire Next Door calls this "economic outpatient care." As you can image, it saps people's initiatives and keeps them, for instance, working 30 hours a week for a pittance.

In the interest of full disclosure, I'm a 33-year-old mother of two and my mother keeps me on her Amazon Prime subscription.

RFAAOATB

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #5 on: October 15, 2014, 01:18:04 PM »
Let us hope when these children are the patriarchs and matriarchs of their families they will bestow the same generosity on their children.  This would only be ridiculous if the parents can't afford the subsidies.

Full disclosure... it took the army to get me out of the family home nearly two years after college.

sheepstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #6 on: October 15, 2014, 01:21:57 PM »
Oh yeah, that's what I mean by comparing it to the nytimes, is that they're doing it for the outrage clicks.

I think there's a third group,  who think, 'this article indicates that they cater to rich people. Maybe if I read the same new sources as rich people, I'll become rich.'

I used to subscribe in hardcopy to the Atlantic years ago; their foreign reporting was about my level. Since they joined face book more and more of the content has been like this. Sadly, they're still sort of my best news source so I haven't stopped following it yet.

rocksinmyhead

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #7 on: October 15, 2014, 01:40:15 PM »
This reads to me as a case of not wanting/letting a child's standard of living to drop from the parents UMC habits to where they could reasonably expect to be at that point in their life. Makes me glad I was raised to enjoy a relatively simple life :)

Right? Me too. I didn't get a manicure/pedicure for the first time until I was 24 and had just landed my first grownup job making high five figures. (Then I found out they are pretty great, but I still keep it to about once a year since they're expensive as fuck and also I would rather spend my time on other things.)

Plus if some kids are being subsidized to look "professional" that raises standards for all young people.

THIS is what I have the biggest problem with. That, and the fact that they're subsidized so they can take poorly-paying jobs (or the other example, unpaid internships) that you really need to get in the door in some industries. this line is what really annoyed me:

Quote
But the job that Emma now has—one that we’re enabling with our support—promises to give her valuable experience in a field she’s interested in.

And it may well advance her “real” job prospects—and her independence—down the line.

maybe I'm just jealous of people with rich parents (but not really because my parents are the best), but just... ugh.

senecando

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #8 on: October 15, 2014, 01:51:18 PM »
Quote
Honestly, the Atlantic publishes so much stuff like this, it's like the new nytimes of 'you can't get by on 6 figures these days.'

It's a populist rag. Who is the target market? ("If you're reading it, it's for you.") People precisely like 'Emma' - overeducated, underemployed, "liberal" (blindly votes democrat and parrots lines from The Atlantic), not terribly smart, not very wise, waiting to be "discovered" (be given the career of their parents for free, ignoring the years of work it took them to get their position)... a more polite way of saying "a failure". And the parents of people like 'Emma.' Normalizing failure, normalizing subsidizing failure, and selling manufactured outrage against them (whoever them is today.)

And wisely publishing things outrageous enough that they can sell manufactured outrage against the manufactured outrage - very sneaky. People like you ("If you're reading it, it's for you") who will click the article to argue against it instead of nod along.

God I miss TLP.

naloj

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #9 on: October 15, 2014, 01:53:12 PM »
Given a car, health insurance/car insurance/student loans paid for; still can't make it on $183/week after rent so she gets additional handouts.

Sounds like she needs a second job so she doesn't have so much free time to spend money...

cavewoman

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #10 on: October 15, 2014, 02:06:54 PM »
Let us hope when these children are the patriarchs and matriarchs of their families they will bestow the same generosity on their children.  This would only be ridiculous if the parents can't afford the subsidies.

Full disclosure... it took the army to get me out of the family home nearly two years after college.

More than that - they will need to bestow the same generosity to their parents, who may not be able to live off of their retirement income because they still feel they need to lease a car or get their nails done.  Or maybe they blew their retirement on their daughter's wedding.

Full disclosure:  I moved back in with my Dad for the second time since I graduated college.  For me it's more about convenience of spending time with him for the year that I live here before I move 2,000 miles away again.  Also, I have been able to save money.  He also paid for my education, and cell and health insurance until 21.  Even without all of that, he's the man.  Neither of us get our nails done :)

NoraLenderbee

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #11 on: October 15, 2014, 03:59:56 PM »
These sound like the same parents who rewrite their kids' college papers and complain to the dean if the kid gets a low grade.

Pooperman

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #12 on: October 15, 2014, 04:12:42 PM »
I was partially like this for a while. School was paid for. Stayed on parents plan/in parents house until I got a job (I graduated in 2012 and I didn't get a job for a bit over a year). Once I did get a job, I paid for my phone, saved for about 4 months and got an apartment with my SO. I moved into SO's parents house between jobs and am going to move to a much better place next month (this time with frugality on my side). I'm now 24. Parents haven't paid for anything (beyond temporary lodging) in more than a year. I prefer independence, but I know that our parents are helpful to the point of annoyance sometimes. They would pay for food, down payment, wedding, clothing, etc if we wanted, but we don't.

A note about my parents. They make a lot of money, and will be unable to spend what they saved. Part of the helping out is gifting money for less tax later. I don't expect true cash gifts (yearly limit x4, or 56k today) to stay until around the point I am FI already (15 years).  To me, that is a somewhat ironic.

arielcole

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #13 on: October 15, 2014, 04:13:05 PM »
I think parents can subsidize their children if they want, but saying she 'can't survive' on 1,200 a month is sad for everybody, and makes the child feel weak/powerless/dependent/unsuccessful which definitely hurts way more than the subsidies help.

I am one of these girls, my dad gave me 500/month handout for 6 months after college while paying my cell phone bill and letting me borrow a car, and you know what happened? I spent all that money he gave me AND the money I made. It wasn't until my pride kicked in and I said, "no more money", that I realized I couldn't eat out, buy coffees, and wander aimlessly in the world forever. So I wised up, found MMM, and am now on my way to financial independence.

The problem is, these parents who are consumer suckkas and car clowns teach their children to be the same way, and though you can afford to be a consumer suckka and a car clown if you make 60k a year you can not afford to be that way on 20k a year, especially if you have a bunch of student debt (which you will if your parents were suckkas). Parents think of their kids as being 'impoverished' on low wages, when in reality they've just inflated their lifestyle to match their income and let their kids ride that wave too. Being accustomed to a lavish lifestyle you don't pay for makes it really hard to say goodbye to it, especially if it's hanging above your head like a symbol of success and your parents are willing to let you borrow theirs for free.

At some point though these twenty somethings will either have to make 60k a year to have independence from their parents, or they will have to decide not to be powerless in regards to their own finances. I for one was not going to wait till I made 60k to declare independence from them. I want to a badass and do everything for myself. That's why I declared independence, maybe other 20 somethings will start to catch on?

galliver

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #14 on: October 15, 2014, 04:31:07 PM »
I think parents can subsidize their children if they want, but saying she 'can't survive' on 1,200 a month is sad for everybody, and makes the child feel weak/powerless/dependent/unsuccessful which definitely hurts way more than the subsidies help.

I am one of these girls, my dad gave me 500/month handout for 6 months after college while paying my cell phone bill and letting me borrow a car, and you know what happened? I spent all that money he gave me AND the money I made. It wasn't until my pride kicked in and I said, "no more money", that I realized I couldn't eat out, buy coffees, and wander aimlessly in the world forever. So I wised up, found MMM, and am now on my way to financial independence.

The problem is, these parents who are consumer suckkas and car clowns teach their children to be the same way, and though you can afford to be a consumer suckka and a car clown if you make 60k a year you can not afford to be that way on 20k a year, especially if you have a bunch of student debt (which you will if your parents were suckkas). Parents think of their kids as being 'impoverished' on low wages, when in reality they've just inflated their lifestyle to match their income and let their kids ride that wave too. Being accustomed to a lavish lifestyle you don't pay for makes it really hard to say goodbye to it, especially if it's hanging above your head like a symbol of success and your parents are willing to let you borrow theirs for free.

At some point though these twenty somethings will either have to make 60k a year to have independence from their parents, or they will have to decide not to be powerless in regards to their own finances. I for one was not going to wait till I made 60k to declare independence from them. I want to a badass and do everything for myself. That's why I declared independence, maybe other 20 somethings will start to catch on?

I think you said this very well on a number of levels. And congrats on declaring independence for yourself! :)

RFAAOATB

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #15 on: October 15, 2014, 05:05:46 PM »
After I moved out (second time) and made more money mistakes than I care to admit, I ended up married with about 20-40k negative net worth and getting deeper and deeper in debt.  I had to take subsidized living with my inlaws for over a year to get back on my feet.  Now a few years later I have a net worth of over 100k (225k assets, 120k condo mortgage) and relative stability. 

I would need to triple my income to afford the house size my parents have, and pursuing that is a big gamble.

I will defend parental subsidies because they helped me make it.  Remember "All In The Family"?  Gloria and her Meathead husband lived with the Bunkers for years.

There are some concerns.  The prevalence of the practice due to depressed average wages can keep average wages depressed.  Others have mentioned lack of ambition.  People have been too polite to mention sexual concerns.  How awkward/no big deal is your parents being mildly aware of you bringing hookups home?  That alone may be worth the 1br rental fees.

I recognize my world view is in the minority, but it need not be dismissed outright.  It's a lot easier to allocate your money for either luxurious spending or maxing out retirement accounts when rent/mortgage isn't taking up half of it.

Pooperman

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #16 on: October 15, 2014, 05:20:35 PM »
After I moved out (second time) and made more money mistakes than I care to admit, I ended up married with about 20-40k negative net worth and getting deeper and deeper in debt.  I had to take subsidized living with my inlaws for over a year to get back on my feet.  Now a few years later I have a net worth of over 100k (225k assets, 120k condo mortgage) and relative stability. 

I would need to triple my income to afford the house size my parents have, and pursuing that is a big gamble.

I will defend parental subsidies because they helped me make it.  Remember "All In The Family"?  Gloria and her Meathead husband lived with the Bunkers for years.

There are some concerns.  The prevalence of the practice due to depressed average wages can keep average wages depressed.  Others have mentioned lack of ambition.  People have been too polite to mention sexual concerns.  How awkward/no big deal is your parents being mildly aware of you bringing hookups home?  That alone may be worth the 1br rental fees.

I recognize my world view is in the minority, but it need not be dismissed outright.  It's a lot easier to allocate your money for either luxurious spending or maxing out retirement accounts when rent/mortgage isn't taking up half of it.

The 'moving out as soon as high school is over' thing is relatively new. I've done my family genealogy and this didn't start happening until the 1950s in my family. 3 generations in the same house was common for hundreds of years. Kids were born in these families. Somehow, sex had to happen. I don't think it was as shunned as now (I blame the queen).

sheepstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #17 on: October 15, 2014, 05:25:37 PM »
No, I hear you, RFAAOATB.  There's a tradition among some groups that the parents are supposed to buy a home for their children, etc. And I know someone who's stashed mad cash by living at home. I think the key thing is that was her reason for doing it. And the folks whose parents bought them a home will take the savings on rent and stash it away for their children's start in life or the parent's retirement, depending on the family's traditions.

It actually makes a lot of sense to help young people save money by supporting them when the have the longest compounding timeline, provided they have the right mindset and that it doesn't derail the parents plans.

galliver

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #18 on: October 15, 2014, 05:27:37 PM »
After I moved out (second time) and made more money mistakes than I care to admit, I ended up married with about 20-40k negative net worth and getting deeper and deeper in debt.  I had to take subsidized living with my inlaws for over a year to get back on my feet.  Now a few years later I have a net worth of over 100k (225k assets, 120k condo mortgage) and relative stability. 

I would need to triple my income to afford the house size my parents have, and pursuing that is a big gamble.

I will defend parental subsidies because they helped me make it.  Remember "All In The Family"?  Gloria and her Meathead husband lived with the Bunkers for years.

There are some concerns.  The prevalence of the practice due to depressed average wages can keep average wages depressed.  Others have mentioned lack of ambition.  People have been too polite to mention sexual concerns.  How awkward/no big deal is your parents being mildly aware of you bringing hookups home?  That alone may be worth the 1br rental fees.

I recognize my world view is in the minority, but it need not be dismissed outright.  It's a lot easier to allocate your money for either luxurious spending or maxing out retirement accounts when rent/mortgage isn't taking up half of it.

Has anyone been opposed to parental assistance generally so far? (Eventually someone always is *sigh*). I'm certainly not. My mom has told me and my sisters that we are always welcome to come live at home and eat at their table if we need to. Fortunately, I haven't and don't anticipate needing to, but it's (IMO) a reasonable form of support/safety net. You moved back to resolve your situation and pay off your debt (I'm going to assume you threw all you had at it). Some do so because they are having trouble finding a job, or one that genuinely pays for living expenses, or need help with childcare. That's all "helping you survive" level help.

But I think sending your kid $500/mo because they don't have money for coffees or craft beers or manicures or shopping at (presumably) the GAP; and saying that they "need" these things or "can't survive" otherwise is pretty ridiculous.

rocksinmyhead

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #19 on: October 16, 2014, 07:15:00 AM »
It actually makes a lot of sense to help young people save money by supporting them when the have the longest compounding timeline, provided they have the right mindset and that it doesn't derail the parents plans.

But I think sending your kid $500/mo because they don't have money for coffees or craft beers or manicures or shopping at (presumably) the GAP; and saying that they "need" these things or "can't survive" otherwise is pretty ridiculous.

I agree wholeheartedly with both of you. Personally, I think parental assistance in the form of letting your adult kid live at home, or providing free childcare for grandchildren (if you want to), is TOTALLY different then sending your kid money every month to subsidize their hipster lifestyle.

(Full disclosure, my parents bought me a $2k car when I graduated high school and paid for my cell phone and car insurance throughout college and two years of grad school. SO SO SO helpful and I appreciate it so much!)

merula

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #20 on: October 16, 2014, 07:35:51 AM »
I see a big difference between parental support to help young adults get established and become self-sufficient, and ongoing support to fund a consumerist lifestyle because that's what both parent and child view as "needs". The former is commendable, the latter is ridiculous.

My parents paid for my college. My grandfather never went to college (would have been eligible under the GI bill, but didn't), and always regretted it. So, he paid for my dad's school with the understanding that my dad would pay it forward. My debt is to my parents and grandparents, and I will pay them back by paying for my kids' college.

But on the other hand, I have to remind my parents and in-laws on a near-weekly basis not to buy toys and clothes for my kids. In both categories, they have more than they need. But the grandparents are looking at what they bought for their children and what their friends buy for their grandchildren, and see my kids as deprived.

golden1

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #21 on: October 16, 2014, 08:52:00 AM »
I am 41, and I was always raised with the expectation that once I was out of college, I was not allowed to move back in, ever.  I didn't want to, because my home life was not fun when I lived there.  I was able to be independent at a young age due to 1)graduating in a tech field and making a good salary immediately after graduation, and b) an inheritance I received at age 20.  I think I would have been better off without the inheritance tbh, because having 6 figures laying around at age 20 was too much temptation for me.  I didn't blow it all thank goodness, but I could have done better with that money for sure.  DH and I made enough that we lived comfortably even without dipping into that money. 

I am pretty sure my daughter will be gone almost immediately after college.  She has the maturity of people three times her age and just has an independent personality.  My son however, is on the autism spectrum, although high functioning, and I am fairly sure he will need financial and emotional support after high school and after college.  It makes me wonder if some of this delay in child independance is due to the higher diagnosis frequency of autism spectrum disorders or other special needs. 

Chranstronaut

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #22 on: October 16, 2014, 09:18:29 AM »
I wish I could put my parents on MY insurance until I'm 26.  It's way better and cheaper :D

galliver

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #23 on: October 16, 2014, 12:48:57 PM »
I am 41, and I was always raised with the expectation that once I was out of college, I was not allowed to move back in, ever.  I didn't want to, because my home life was not fun when I lived there.  I was able to be independent at a young age due to 1)graduating in a tech field and making a good salary immediately after graduation, and b) an inheritance I received at age 20.  I think I would have been better off without the inheritance tbh, because having 6 figures laying around at age 20 was too much temptation for me.  I didn't blow it all thank goodness, but I could have done better with that money for sure.  DH and I made enough that we lived comfortably even without dipping into that money. 

I am pretty sure my daughter will be gone almost immediately after college.  She has the maturity of people three times her age and just has an independent personality.  My son however, is on the autism spectrum, although high functioning, and I am fairly sure he will need financial and emotional support after high school and after college.  It makes me wonder if some of this delay in child independance is due to the higher diagnosis frequency of autism spectrum disorders or other special needs.

I think you hit on an important point. One of the  most important things a parent can do is teach their kid to strive for independence. A family friend recently compared raising kids to launching a glider: first you have to accelerate it, but then you have to let it go. (She was talking about her jr-in-college daughter coming home for a weekend.) If you do that, I don't think it matters if you tell your kid they can or can't come back home; I haven't lived with my parents since college and I don't intend to, even though they left the door open.

One thing that stuck out to me about your story: you would have graduated in ~1995? I hope you realize you can't compare your experience to that of people who graduated (with tech degrees!) in 2009. Some of my friends had trouble finding jobs, and had to wait out a few years in grad school, or move back home submitting 100's of applications with no responses, until conditions improved and jobs in their fields actually appeared. By 2011-2012 everyone was doing fine; so it wasn't their skills that were lacking.

Elderwood17

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #24 on: October 16, 2014, 12:59:28 PM »
Poor Emma.....with her parents and grandparents helping her out from every direction she will likely be at best very stunted in her ability to grow any kind of stash and may never be able to have her own. Does that make her stash-icapped?

RFAAOATB

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #25 on: October 16, 2014, 02:16:03 PM »
Poor Emma.....with her parents and grandparents helping her out from every direction she will likely be at best very stunted in her ability to grow any kind of stash and may never be able to have her own. Does that make her stash-icapped?

Let us hope she marries well which combined with her inheritance will last her to her golden years.

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #26 on: October 16, 2014, 02:23:06 PM »
I graduated from college a year ago, and I have noticed several friends with parents who greatly subsidized their living costs either go one of two ways:  suddenly whining because they're so poor now that they're in the real world, or parents helping them pay for things while they go live in a nice apartment.

Note:  My parents have generously covered some of my bills through college and this past year, though now I am totally on my own.  But it was always clear that it was my duty to be responsible with my other life choices, or the help would stop.  They wanted to help springboard me into adulthood, not prevent me losing a standard of living.

farmstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #27 on: October 16, 2014, 02:42:34 PM »
Well... I might have been a little Emma, while comparing to my friends I was always on the frugal side. I'm 29 (as you can see there <<), and my parents still keep me in their health plan (thank god) and family cellphone. Every time my mom visits, she brings me vegetables/fruit. Every time my MIL visits, she makes sure to ask what we want from the farmer's market first. I'm a bit embarrassed to say we accept all of these little helps with an open heart. Our savings rate is about 40%, and the $300/month in healthcare is a significant gift (I'm usually working contracts), plus the several little $15 to $20 in food here and there and whatever it would cost me on an independent phone plan. I feel bad for my parents, but they don't want me to pay my share. I try to help them in other ways.

Oh, yes, I also lived with them until 2012 (so 27? I moved out 3 months after my graduation), and my father was constantly asking me to step up and try to earn some real money (I guess I was victim to the underpaid internship, but probably the real problem was their compliance helped me feel like I could stay in college - free of cost of course - for 9 years). He even told me to buy a car! He wanted me to have a monthly payment so I'd start trying to earn more... Then I told him I could pay cash for a car in the price range he was telling me and he backed off. I guess he thought I wasn't doing so bad (but after finding MMM, I know I really was!!!)

So, yes, I think I will offer the starting help to my kids to some extent, but making sure(r) they understand that's for them to save more and get the compounding ball rolling. I can see the benefits now, but can also see how it can ruin someone's financial future.

Psychstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #28 on: October 17, 2014, 07:40:11 AM »
It makes me wonder if some of this delay in child independence is due to the higher diagnosis frequency of autism spectrum disorders or other special needs.

OT, but I just wanted to say that while we are seeing higher rates of AU diagnosis, this directly related to the refining of diagnostic criteria. While AU diagnoses have gone up, we have seen corresponding drops in the rate of diagnoses for Schizophrenia, Intellectual Disabilities (formerly known as Mental Retardation), Bipolar Disorder, and other such conditions.


On-topic, I lived with one of my parents until I finished undergrad, because it was a way to keep money from spiraling way out of control (took out too much in SLs and did a terrible job of saving, but at least I stayed out of CC debt). They were fine with it and agreed upon. Went to grad school and have been independent ever since. Got one good friend who still lives at home and has never had a regular job, but his older brother also lives at the parents house with his wife and baby, so there is a strong precedent to stay as long as possible.

Eddy

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #29 on: October 17, 2014, 09:34:59 AM »
My parents said that they wanted to pay for my education, but so far due to financial aid, that won't be necessary the first two years. Most probably, it would not even be necessary because I can pay all of it. It would not cost me more than 3000 extra dollars. I'm studying to be an engineer, so most probably when I graduate, I'll get a job that pays considerably (or I hope so).

However, DIDN'T ANYONE NOTICE THAT HER MOM SPENT $250,000 in her education? That's freaking expensive! AND What's the outcome of that? Her daughter earns $12 per hour! People are just crazy. Just crazy... It just surprises me.

galliver

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #30 on: October 17, 2014, 11:21:20 AM »
My parents said that they wanted to pay for my education, but so far due to financial aid, that won't be necessary the first two years. Most probably, it would not even be necessary because I can pay all of it. It would not cost me more than 3000 extra dollars. I'm studying to be an engineer, so most probably when I graduate, I'll get a job that pays considerably (or I hope so).

However, DIDN'T ANYONE NOTICE THAT HER MOM SPENT $250,000 in her education? That's freaking expensive! AND What's the outcome of that? Her daughter earns $12 per hour! People are just crazy. Just crazy... It just surprises me.
If she had gone to a cheaper school without the fancy name (I assume), she would have a $0/hr unpaid internship. I wish I were kidding. I'm worried about my sister, who wants to go into the publishing biz in 4 years. What can you do? She's decent at math, but has zero interest in it. A tech degree would depress hera little more every day.

As a fellow engineer, I think it's terrible that some fields don't see the necessity of paying their entry level employees. 

Setruss

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #31 on: October 17, 2014, 12:02:10 PM »
My parents are paying for all my education costs (fairly common for Asian families). My degree is a whopping $160k, but I got at least $60k of scholarships. And a couple of co-ops that are 40+ hours a week at >$12/hr. And I will graduate with a Civil engineering degree (though I do require grad school) and earn around $60k if/ when I get a job.

But on co-ops I live 13 hours away, by myself (well, with roommates, but no family nearby), and am self supporting. It is a huge decrease in my "standard of living" going from upper middle class living with my parents to lower middle class living. It's a hard adjustment. Even with my parents paying for my cell and healthcare (family plans). It's hard seeing peers traveling to Europe and spending their parents' money like water when you're trying to be financially responsible.

No excuse, but it is a hard adjustment that must be made.

sleepyguy

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #32 on: October 17, 2014, 12:39:58 PM »
WTF... $250k... for minimum wage (that's pretty close to what min is in Canada btw).  I don't understand how students (or parents for that matter) that can see it as a good ROI.  Unless you go to college purely for the learning aspect to "find yourself" and YOU HAVE THE MONEY to pay for it... it's not a good idea to graduate working at starbucks wage.  I dont' understand this "professional" look for 50k.  That means salon look and designer clothes probably in their minds.

Now mind you i was quite a leech until 20yrs old.  I worked fulltime right out of highschool making $15/hr but still lived at with parents and paid my parents a mere $200-300/mth to help out.  Didn't pay for food/hydro/etc.  Then again my mom wanted me to live with her til I was 40, lol.  I'm grateful they let me stay for those 2 yrs as I worked fulltime.  Then we got a house for $280k ($250k mortgage) while earning only 70k combined (don't laugh we had no clue then).  It all worked out though I must say.

We've had discussions how we'll spend for our 2 kids.  I'm definitely not sold on the "get a degree to suceed" pill but we'll pay for it if they choose.  We'll hammer down working smart and saving early is a good idea.  Hoping our kids will be as financially successful as we have.  Money isn't everything, but it does affect all aspects of your life.

My parents said that they wanted to pay for my education, but so far due to financial aid, that won't be necessary the first two years. Most probably, it would not even be necessary because I can pay all of it. It would not cost me more than 3000 extra dollars. I'm studying to be an engineer, so most probably when I graduate, I'll get a job that pays considerably (or I hope so).

However, DIDN'T ANYONE NOTICE THAT HER MOM SPENT $250,000 in her education? That's freaking expensive! AND What's the outcome of that? Her daughter earns $12 per hour! People are just crazy. Just crazy... It just surprises me.
« Last Edit: October 17, 2014, 12:44:12 PM by sleepyguy »

deborah

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #33 on: October 17, 2014, 03:00:58 PM »
I am 41, and I was always raised with the expectation that once I was out of college, I was not allowed to move back in, ever.  I didn't want to, because my home life was not fun when I lived there.  I was able to be independent at a young age due to 1)graduating in a tech field and making a good salary immediately after graduation, and b) an inheritance I received at age 20.
One thing that stuck out to me about your story: you would have graduated in ~1995? I hope you realize you can't compare your experience to that of people who graduated (with tech degrees!) in 2009. Some of my friends had trouble finding jobs, and had to wait out a few years in grad school, or move back home submitting 100's of applications with no responses, until conditions improved and jobs in their fields actually appeared. By 2011-2012 everyone was doing fine; so it wasn't their skills that were lacking.
I am a bit older. When I graduated unemployment was high, and young people were not getting jobs. However, I knew that I needed to get a job - whether it was in my field or not, and I kept on submitting the 100's of applications needed to get a job in my field. I had little money, and no monetary support from my parents.

I am RE but when I was managing people, I noticed that it was terribly bad for people to be on "higher duties pay" for more than 3 months - after that, they had integrated the extra money into their lifestyle, and had real difficulties in cutting back when their higher duties finished. I think that giving their children an allowance would make the children less independent, but also make it extremely difficult for them to live on a "real" wage when they landed a "real" job.

Although I wouldn't do it, I think it is OK to give gifts - a wedding, a car, maybe even a house - because they are one-off things that don't change the child's day to day budget, but I really think allowances are a very bad idea.

minimustache1985

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #34 on: October 17, 2014, 03:22:16 PM »
I see a big difference between parental support to help young adults get established and become self-sufficient, and ongoing support to fund a consumerist lifestyle because that's what both parent and child view as "needs". The former is commendable, the latter is ridiculous.

I 100% agree.  When in SoCal a coworker of mine lived with her parents for a few years, but with the understanding she was saving for a down payment during those years instead of paying rent- not so she could squander her salary.  My sisters MIL watches their daughter while she works, and I think those types of assistance are great to provide if you are able and want to do so.

I received quite a bit of assistance in college- my parents paid my cell phone bill and insurance on the family plans, my mom worked at the University I attended (which is why I chose it) so I didn't have to pay tuition, and I lived at home rent-free some of that time, but I can't imagine cashing a monthly check from them even then, let alone after graduating.

Full disclosure: my mom did gift me a set $ amount for my wedding that she had set aside from my father's life insurance after he passed.  This was totally consumerist, but something she really wanted to do and a one time thing.

MrsPete

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #35 on: October 18, 2014, 07:18:04 PM »
Sounds like she needs a second job so she doesn't have so much free time to spend money...
I was thinking the same thing.  I mean, she's only working 30 hours a week.  When I was just out of college, I had two jobs.  And four roommates. 

The article says it's not possible to compare "then and now", but I disagree. 
However, DIDN'T ANYONE NOTICE THAT HER MOM SPENT $250,000 in her education? That's freaking expensive! AND What's the outcome of that? Her daughter earns $12 per hour! People are just crazy. Just crazy... It just surprises me.
Yeah, and it makes me think of something in my own life:  I finished high school, went straight to college, paid my own way, suffered quite a bit in doing so.  My same-aged cousin had been working for a fast-food restaurant for two years already . . . and she dropped out of college in her first semester to go full-time at the restaurant.  I thought she was stupid.  However, she was always the devil of a hard worker -- moved up through management, now is in regional.  And we've probably earned about the same amount of money in our lives thusfar.

Lack of a degree isn't necessarily a death sentence.

And clearly the parents in this situation COULD NOT afford to pay for this expensive education.  How do we know?  They're making payments now, after graduation! 
If she had gone to a cheaper school without the fancy name (I assume), she would have a $0/hr unpaid internship. I wish I were kidding. I'm worried about my sister, who wants to go into the publishing biz in 4 years. What can you do? She's decent at math, but has zero interest in it. A tech degree would depress hera little more every day.
Based upon this article, we can't possibly know what options she'd have if she'd attended a cheaper school. 

« Last Edit: October 18, 2014, 07:32:55 PM by MrsPete »

MoneyCat

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #36 on: October 18, 2014, 08:04:45 PM »
Honestly, I wish my parents had done all this for me.  In my case, I got booted out the door when I was 17.  I went to college on my own dime and my parents stole my Hope Lifetime Learning tax credit.  They never called, never visited, and never helped me financially with anything.  They did send me $5 in the mail on my birthday, though, which was nice of them.  This article sounds like a wonderful fantasy to me.

RFAAOATB

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #37 on: October 18, 2014, 11:07:06 PM »
Honestly, I wish my parents had done all this for me.  In my case, I got booted out the door when I was 17.  I went to college on my own dime and my parents stole my Hope Lifetime Learning tax credit.  They never called, never visited, and never helped me financially with anything.  They did send me $5 in the mail on my birthday, though, which was nice of them.  This article sounds like a wonderful fantasy to me.

If they ask you for help with their long term care needs are you going to send them the $5 back?  Were you a horrible kid or were they horrible parents?

MoneyCat

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #38 on: October 19, 2014, 11:51:01 AM »
Honestly, I wish my parents had done all this for me.  In my case, I got booted out the door when I was 17.  I went to college on my own dime and my parents stole my Hope Lifetime Learning tax credit.  They never called, never visited, and never helped me financially with anything.  They did send me $5 in the mail on my birthday, though, which was nice of them.  This article sounds like a wonderful fantasy to me.

If they ask you for help with their long term care needs are you going to send them the $5 back?  Were you a horrible kid or were they horrible parents?

They are horrible parents.  I am still kind to them because they are family, but my wife is always asking me why I bother.  My father is hinting that they want to move in with us because they screwed their retirement with financial mismanagement and we are well-off these days (No thanks to them).  There's no way that's going to happen.  If they ask, I am just going to tell them that they should have thought ahead before they decided to throw me to the wolves.

crispy

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #39 on: October 19, 2014, 12:25:43 PM »
Honestly, I wish my parents had done all this for me.  In my case, I got booted out the door when I was 17.  I went to college on my own dime and my parents stole my Hope Lifetime Learning tax credit.  They never called, never visited, and never helped me financially with anything.  They did send me $5 in the mail on my birthday, though, which was nice of them.  This article sounds like a wonderful fantasy to me.

Are we related? Because that's sounds like my story in a nutshell except they once gave me $140 because I just couldn't get all my housing/book money together through my scholarships, loans, and multiple jobs.  That was pretty much the only help I received even although they were helping my older sisters left and right.  My father has passed on and my mom has remarried, and she does seem to have a lot of regrets and is often trying to send me gifts that I don't want or need.  Obviously, there are many, many more issues at work here, but them kicking me out of the house (while still supporting my much older sister and allowing her to live with them) still hurts.

mm1970

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #40 on: October 19, 2014, 02:45:50 PM »
My boss does even worse for her daughter. The daughter is 31....3 years older than me. In the last year she paid for her wedding (normal but still an insane cost if you ask me), the down payment on their home, all new furniture for their new home, a washer and dryer, baby furniture for the little one on the way as well as enough clothes, shoes, etc that she had to force herself to stop so other people could buy stuff (this baby already has more pairs of shoes than I do and it's not due until New Years) and she just paid off the daughters car so they could get a new car for her husband. And I know she pays for their cell phones

I don't think she's going into any debt to do this but she talks about how they'll have to watch their pennies so they can go on vacation. She's not going to retire early (this has been brought up since her boss is retiring next year at 64). I'm younger than her daughter and I might be retired before she is
My husband's old boss was like this.  He had a second marriage.  His new wife was wealthy (well, they both were wealthy).  My husband was on a business trip and the boss brought his wife.  At dinner, she was wondering when she could stop giving her daughter money - she bought her a condo and just bought her a car.

My husband asks "well, how old is she?"  "37".  He says "well, I'm 36, it's long past time!"

mydogismyheart

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #41 on: October 21, 2014, 01:47:01 PM »
I'm OK with parent's helping their kids out some (so long as it's reasonable) and as long as the kid is working hard to improve themselves and work their way up financially a little bit.  My parent's helped me through college and that's how I was able to graduate debt free. But I also went to community college and then a local cheaper university. Nothing big and fancy.  I also worked 2 jobs the whole way through to help pay for things like clothing and personal items while my parent's really only covered college and housing costs temporarily.

However, when it's just stupid and unreasonable and causing a disservice to the kid, then I don't agree. I have a close personal friend who works his ass off doing labor jobs and barely seems to get by.  He has an 18 year old son who is basically wasting away doing nothing. Didn't graduate highschool and is now doing igrad online (which is great, he's trying to get a degree). However, he does absolutely nothing but stay at home all day and play games online and skype. I have no friggin clue why this kid has no job at all! He just lays around and then asks his dad for money for things. Just the other day his dad gave him $40 to take his girlfriend out. He pays all his car expenses, housing expenses, entertainment, clothing, everything! It makes zero sense to me. I keep telling him he needs a job so he finally went and got a game stop application, but last I saw it wasn't even filled out... it's very pathetic, especially knowing how hard his dad works to make very little money... constantly working overtime and getting side work so he can just pay the bills...

madame librarian

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #42 on: October 21, 2014, 02:07:02 PM »
I didn't think this forum was about shaming people for earning low wages. I mean, it's one thing to be a spoilt and demanding brat. It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more. $12/hr with no benefits sucks. And when I was just out of college and searching a few years ago, it was pretty common for "entry level" position. And getting a 2nd job is a worthy aspiration -- I have 2 jobs myself -- but just getting a second low-wage service job is not what it used to be either because schedules now change from week to week (personal experience with this).

galliver

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #43 on: October 21, 2014, 03:20:37 PM »
I didn't think this forum was about shaming people for earning low wages. I mean, it's one thing to be a spoilt and demanding brat. It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more. $12/hr with no benefits sucks. And when I was just out of college and searching a few years ago, it was pretty common for "entry level" position. And getting a 2nd job is a worthy aspiration -- I have 2 jobs myself -- but just getting a second low-wage service job is not what it used to be either because schedules now change from week to week (personal experience with this).

I didn't think we were shaming her for her low wage. I think most people have admitted having some degree of parental support early in life (especially health insurance and cell phones) and being appreciative for it. But as someone who has actually been living on the same budget as this girl (and approximately the same rent), I can say: she's living a pretty fancy lifestyle that she could cut back and be more independent. I also loved deborah's point: that one-off gifts/help register very differently from a monthly stipend. There are certain categories I would be a lot more careful about if I was living on $1200/mo instead of $1500-1800. I might also accept some one-off forms of help: a plane ticket home, or a medical expense, or a gift of a new outfit, computer, etc. But my parents wouldn't offer cash assistance, and I wouldn't expect it.

To be fair to Emma, we don't actually know how she feels about all this. We're really making fun of her mom, who seems to think her darling can't do without mani/pedis.

gimp

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #44 on: October 21, 2014, 03:34:45 PM »
It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more.

I mean... they're accepting the wage, so I guess from a practical point of view, no, they don't have to be paid a "real wage."

sheepstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #45 on: October 21, 2014, 03:59:46 PM »
It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more.

I mean... they're accepting the wage, so I guess from a practical point of view, no, they don't have to be paid a "real wage."

And if one thinks the situation is unfair, one has two possible solutions. One is that the individual should get off their duff and do something that demands more value in the market. The other is that everyone should collectively take social action to fix the situation.  However, subsidizing the kids takes away the motivation for either.

madame librarian

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #46 on: October 21, 2014, 07:47:42 PM »
To be fair to Emma, we don't actually know how she feels about all this. We're really making fun of her mom, who seems to think her darling can't do without mani/pedis.

My mom does stuff for me that I would never dream of asking her for.

rocksinmyhead

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #47 on: October 22, 2014, 06:47:20 AM »
I didn't think this forum was about shaming people for earning low wages. I mean, it's one thing to be a spoilt and demanding brat. It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more. $12/hr with no benefits sucks. And when I was just out of college and searching a few years ago, it was pretty common for "entry level" position. And getting a 2nd job is a worthy aspiration -- I have 2 jobs myself -- but just getting a second low-wage service job is not what it used to be either because schedules now change from week to week (personal experience with this).

I didn't think we were shaming her for her low wage. I think most people have admitted having some degree of parental support early in life (especially health insurance and cell phones) and being appreciative for it. But as someone who has actually been living on the same budget as this girl (and approximately the same rent), I can say: she's living a pretty fancy lifestyle that she could cut back and be more independent. I also loved deborah's point: that one-off gifts/help register very differently from a monthly stipend. There are certain categories I would be a lot more careful about if I was living on $1200/mo instead of $1500-1800. I might also accept some one-off forms of help: a plane ticket home, or a medical expense, or a gift of a new outfit, computer, etc. But my parents wouldn't offer cash assistance, and I wouldn't expect it.

To be fair to Emma, we don't actually know how she feels about all this. We're really making fun of her mom, who seems to think her darling can't do without mani/pedis.

It's another thing to be part of a cohort that many people don't think they have to pay a real wage to any more.

I mean... they're accepting the wage, so I guess from a practical point of view, no, they don't have to be paid a "real wage."

And if one thinks the situation is unfair, one has two possible solutions. One is that the individual should get off their duff and do something that demands more value in the market. The other is that everyone should collectively take social action to fix the situation.  However, subsidizing the kids takes away the motivation for either.

yes!!!! +1 to all of this.

Sid Hoffman

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #48 on: October 22, 2014, 03:43:53 PM »
Although I wouldn't do it, I think it is OK to give gifts - a wedding, a car, maybe even a house - because they are one-off things that don't change the child's day to day budget, but I really think allowances are a very bad idea.

Actually I had an odd experience with this as well.  My son is 15 now and went full cycle from 100% dependent to on a healthy allowance, but had to pay for a lot of his own stuff, even paying for his own ice cream, and back to basically 100% dependent.  I honestly didn't see any value for the allowance.  It started to look almost like welfare: any money he got, he used to spend on ice cream, video games, or things like that.  I don't think that giving my son an allowance really taught him anything valuable about managing money, so we ended up discontinuing it.

Now he does still have some money of his own but basically he participates in budgeting.  If he wants a new video game, we discuss what spending looks like, whether he has anything he can contribute towards the purchase, and basically explain it is part of the family entertainment budget.  Money spent on ice cream or video games has much more value to him now that he sees that mom & dad have to give something up in order to spend the money on fun stuff, even if that thing they're giving up is intangible, such as putting money towards future savings.

He seems to understand the value of money better now, even though he's only indirectly spending it than he did when it was just showered upon him to spend however he saw fit.  I'm guessing all kids are different, however.  I think that's part of the challenge of parenting; you have to adjust the parenting style to what you see working with each child, not just a one-size fits all approach and you let them either pass or fail, similar to the school system.  As a parent, you should never see failure as an option.

sheepstache

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Re: 25 is the new 21: Ridiculous parental subsidies
« Reply #49 on: October 22, 2014, 03:51:00 PM »
To be fair to Emma, we don't actually know how she feels about all this. We're really making fun of her mom, who seems to think her darling can't do without mani/pedis.
Ah, good point.

Although I wouldn't do it, I think it is OK to give gifts - a wedding, a car, maybe even a house - because they are one-off things that don't change the child's day to day budget, but I really think allowances are a very bad idea.

Actually I had an odd experience with this as well.  My son is 15 now and went full cycle from 100% dependent to on a healthy allowance, but had to pay for a lot of his own stuff, even paying for his own ice cream, and back to basically 100% dependent.  I honestly didn't see any value for the allowance.  It started to look almost like welfare: any money he got, he used to spend on ice cream, video games, or things like that.  I don't think that giving my son an allowance really taught him anything valuable about managing money, so we ended up discontinuing it.

I think Deborah was talking about giving a regular stipend to adult children, but that's a really interesting point about the effect of the traditional allowance. It basically teaches children that money is for fun stuff and so they're always going to feel deprived when they get out into the real world and have to pay for their necessities with their paycheck.