Handling of Wealth Transfer to child(ren)

[wageslave23]

I don't know, the typical FIRE person here seems to be (WAG) in their mid-40s with a couple million bucks and a SWR at 3% or so because everyone is too much of a sissy to go for 4%.

cFIREsim says in that scenario (assuming you live another 40 years into your 80s and collect some a minimal $20k/year in social security) the average outcome is a NW of $10 million, so you'd indeed (unless you have a lot of kids) have multiple millions of dollars per kid to hand out.

The problem is that if I give my 45 year old kids a few million bucks when I'm 80 and croak, it's not going to be all that helpful anymore, just like for mid-40s me inheriting a bunch of money wouldn't really change much. It would have made a big difference in terms of family planning (we'd have at least one more kid) and reduced a lot of stress 10 or 15 years ago, though, and it would not have changed anything about my lifestyle or fundamental character.

Not giving kids money when they're younger is just perpetuating this vicious cycle of all wealth flowing to more and more elderly people, too, which doesn't seem like a good thing.

I'd also question the "overcoming obstacles makes you a better person" thing, since it's not clear to me why that wouldn't mean we should deliberately make our kids lives *harder* - which is something basically nobody does.

IMO when we say most of this stuff about not wanting to give money to our kids, it's really us saying we want our kids to basically grow up like we did, or at least end up as similar people to us. That's probably evolution talking, so it would be hard to overcome.

-W

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

[Laura33]

I'd also question the "overcoming obstacles makes you a better person" thing, since it's not clear to me why that wouldn't mean we should deliberately make our kids lives *harder* - which is something basically nobody does.

4) I dunno about you, but we absolutely *do* make our kids' lives harder than they have to be.  That's why they have chores, share bedrooms and bathrooms, and occasionally have meals they don't like.  It gives us a chance to teach attitudes they can apply when facing hard situations in the much-less-forgiving outside world.

+100.  My kids have so many damn privileges that I could have made their lives mostly a cakewalk.  I could have been the snowplow mom who is always at school bullying the teachers to be nice to my kids.  I could have interjected myself into their disputes with their friends and coaches.  I could have gotten the best tutors any time they even blinked.  I could have worked the standardized testing system, hired all sorts of college "consultants," bought application essays from college students, and made significant contributions to try to buy my kids' way into college.  I could have bought my kids just about every damn thing they wanted.  I could have followed 6" behind them on the playground so they never got a boo-boo.

Instead, I spent now 23 years trying to find the right balance between necessary support and natural consequences.  I bit my tongue (several times literally) and sometimes cried on my own when my kids dealt with hard shit, because I knew they needed to learn to deal with it themselves.  I taught them that we do not just buy whatever the hell we want when we want it, because everyone has limited money, and so everyone has to decide the best way to deploy those funds.  I made them earn money instead of just giving it to them, because that's what the rest of their lives are going to be, and so might as well get some practice in when the consequences of failure are really low.

In short, I intentionally made my kids' lives tougher than they needed to be -- I forced them to struggle through many things on their own, with me as their cheerleader, instead of doing it for them -- because I believed that was necessary for their healthy development.  And I still believe it.

Also, the "not a penny until I die" option is a strawman.  This whole sidebar started as "why not give them when they're young instead of waiting until you die?"  But I don't think anyone here has said that if they have $10M when they're 50, they're going to hold on to every penny until they die.  Instead, we're all trying to figure out what is the best way to give some of that extra money to our kids when they do need it, while we're still here to do so.  We're just trying to muddle through the best way to do that without turning them into entitled twits.

[waltworks]

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

Sure, but I'm not proposing that. I'm proposing a lifetime stipend for food/housing/basic needs. Like, in current dollars, $3-4k a month. You're not going to fly to Bora Bora and make it rain at the strip club on that kind of money, and you won't even be able to afford your own place in a really fancy area, but you won't have to worry about being homeless if you decide to have a third kid and then you lose your job or something.

I guess I don't see the downside of completely eliminating the risk of being destitute, unless you think that struggle and suffering (with fear of poverty as a motivator) is somehow good for people.

-W

[waltworks]

Also, the "not a penny until I die" option is a strawman.  This whole sidebar started as "why not give them when they're young instead of waiting until you die?"  But I don't think anyone here has said that if they have $10M when they're 50, they're going to hold on to every penny until they die.  Instead, we're all trying to figure out what is the best way to give some of that extra money to our kids when they do need it, while we're still here to do so.  We're just trying to muddle through the best way to do that without turning them into entitled twits.

Yes, that's the rub! But what seems to mostly happen is that people DO wait until they die, and then their kids who are 50-60 years old inherit a bunch of money that they don't really have a use for, and then they do it all over again. There has to be a better way.

I really do think that a trust fund with a really fairly modest monthly payout would work pretty well for most people, and it would be roughly equivalent to the sort of minimalist FI/barista FI that would allow a kid to pursue something really interesting that they want to do without worrying that they'll never be able to support a family or whatever.

-W

[wageslave23]

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

Sure, but I'm not proposing that. I'm proposing a lifetime stipend for food/housing/basic needs. Like, in current dollars, $3-4k a month. You're not going to fly to Bora Bora and make it rain at the strip club on that kind of money, and you won't even be able to afford your own place in a really fancy area, but you won't have to worry about being homeless if you decide to have a third kid and then you lose your job or something.

I guess I don't see the downside of completely eliminating the risk of being destitute, unless you think that struggle and suffering (with fear of poverty as a motivator) is somehow good for people.

-W

I think you would risk making them comfortable with that and never applying themselves to become better. It's just like the people on this forum who have healthy grown ass kids who won't move out of their parents home because they are too comfortable.  Or the people who are continually on welfare.  When you go to the gym to work out, the spotter is there only if you temporarily need them. You don't lift 40% of the weight for them the whole time.  You'll just stunt their growth.  Same thing with schooling, learning to control your appetite, how to navigate relationships, and financial responsibility.

[waltworks]

But by that logic you should never give them as much as an old potato sack to wear while they walk barefoot to school, right?

I mean, if your goal is that your kid do absolutely everything themselves with absolutely no help ever, I guess that's one way to look at it. I know that for many people, no amount of trying hard will let them save enough to buy a house in their hometown someday, pay for college for their kids, etc.

In the meantime, you and I are sitting around collecting dividends we'll never spend. Seems kinda stupid to me. There are a lot of people in the world trapped in dead end jobs who would love to start a business, or try their hand at being a musician, or work as a teacher and make kids lives better, salary be damned - but they can't because grandpa thinks he'll ruin their lives if he gives them any money.

I also tend to disagree with the weightlifting analogy, because for most of us here, the financial goal is not to have as much money as possible, unlike lifting, where the goal is to constantly be able to lift more/constantly improve. Deadlifting your PR and investing so you can have enough to not work anymore are very different things. Nobody ever hits a 200 pound bench press and then calls it a day because they hit their number.

Edited to add: Tax loss harvesting so you can qualify for ACA subsidies (or Medicaid) is something a lot of folks here do that is IMO no different than collecting welfare. I have no problem with either one, really, but let's be honest about who is and isn't suckling at the public teat.

-W

[reeshau]

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

Sure, but I'm not proposing that. I'm proposing a lifetime stipend for food/housing/basic needs. Like, in current dollars, $3-4k a month. You're not going to fly to Bora Bora and make it rain at the strip club on that kind of money, and you won't even be able to afford your own place in a really fancy area, but you won't have to worry about being homeless if you decide to have a third kid and then you lose your job or something.

I guess I don't see the downside of completely eliminating the risk of being destitute, unless you think that struggle and suffering (with fear of poverty as a motivator) is somehow good for people.

-W

I think you would risk making them comfortable with that and never applying themselves to become better. It's just like the people on this forum who have healthy grown ass kids who won't move out of their parents home because they are too comfortable.  Or the people who are continually on welfare.  When you go to the gym to work out, the spotter is there only if you temporarily need them. You don't lift 40% of the weight for them the whole time.  You'll just stunt their growth.  Same thing with schooling, learning to control your appetite, how to navigate relationships, and financial responsibility.

I think this is quite situational.  If your child shows talent as an artist, or has a dream of pursuing a career that is socially valuable but poorly paid (e.g. social worker, public defender, child advocate, NGO leader) then I think stepping in to help them realize that dream can be a good thing, given the context.

Setting them up to have the majority of their needs seen to, without some sort of ambition on their part, could at the least lead to entitlement, and possibly into worse trouble.  This ambition doesn't need to be fear-based.

[cangelosibrown]

What's the old Warren Buffett quote about how much he gave his kids? "Enough that they can do anything, but no enough so they can do nothing"?

[twinstudy]

Sure, but you can just give each kid a lifetime stipend sufficient to pay for food and housing in a moderately desireable area, index it to inflation, and let them do their own thing. If they want to work a minimum wage job and smoke pot, or if they want to be a PhD scientist, they're being them, right?

You don't have to just hand them $10 million and walk away.

-W

Give your kids a lifetime stipend and the grandkids will be completely fucked. You think a pot smoking kid who doesn't lift a finger all his life is going to raise good children of his own?

I guess if your motivation in life is to make your kids' lives as easy as possible it makes sense, but I think people are happier when they have some sense of accomplishment and self-satisfaction. Knowing that your mummy and daddy paid for everything in your life and that you have the innate skills of an idiot is going to lead to a very parlous existence, not to mention a strange relationship with your parents.

I don't know, the typical FIRE person here seems to be (WAG) in their mid-40s with a couple million bucks and a SWR at 3% or so because everyone is too much of a sissy to go for 4%.

cFIREsim says in that scenario (assuming you live another 40 years into your 80s and collect some a minimal $20k/year in social security) the average outcome is a NW of $10 million, so you'd indeed (unless you have a lot of kids) have multiple millions of dollars per kid to hand out.

The problem is that if I give my 45 year old kids a few million bucks when I'm 80 and croak, it's not going to be all that helpful anymore, just like for mid-40s me inheriting a bunch of money wouldn't really change much. It would have made a big difference in terms of family planning (we'd have at least one more kid) and reduced a lot of stress 10 or 15 years ago, though, and it would not have changed anything about my lifestyle or fundamental character.

Not giving kids money when they're younger is just perpetuating this vicious cycle of all wealth flowing to more and more elderly people, too, which doesn't seem like a good thing.

I'd also question the "overcoming obstacles makes you a better person" thing, since it's not clear to me why that wouldn't mean we should deliberately make our kids lives *harder* - which is something basically nobody does.

IMO when we say most of this stuff about not wanting to give money to our kids, it's really us saying we want our kids to basically grow up like we did, or at least end up as similar people to us. That's probably evolution talking, so it would be hard to overcome.

-W

You can make your kids' lives slightly easier by contributing to a house deposit or otherwise gently incentivising their savings. Those things still require the kids to put in most of the effort - and planning - themselves. Just giving them millions of dollars will change a lot about them, and not for the better: have a look at what happens to lottery winners after they win the jackpot. Hint: none of them end up becoming PhD scientists now that they don't have to work for money any more.

I don't think more money from my parents would ever have greatly changed my life (then or now) as I've always felt I had the skills, experience and ability to earn well and save well. That is what my parents taught me, and it was a lot more valuable than them giving me a windfall of money, which I neither need nor want. Even now, I don't want my parents' money - I would rather they spend it, or any that is accumulated can go into trust and I will ignore it (but keep it there, as I see nothing better to do with it, and it's all just point scoring anyway).

[twinstudy]

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

Sure, but I'm not proposing that. I'm proposing a lifetime stipend for food/housing/basic needs. Like, in current dollars, $3-4k a month. You're not going to fly to Bora Bora and make it rain at the strip club on that kind of money, and you won't even be able to afford your own place in a really fancy area, but you won't have to worry about being homeless if you decide to have a third kid and then you lose your job or something.

I guess I don't see the downside of completely eliminating the risk of being destitute, unless you think that struggle and suffering (with fear of poverty as a motivator) is somehow good for people.

-W

Barring severe congenital disability or life-changing illness (e.g. cancer) - and if those things happen, then all bets are off - a person with a good upbringing will never become destitute. So if you want to insure your kids against these bad outcomes, invest in them - spend hours with them each night reading and listening to music (when they are infants/toddlers); take them to the library at age 3-4 so they can learn to read off the picture books; take time off work to tutor them in long division and phonics and all the other stuff that kindergarten/school doesn't teach them because they deem it too early. This builds up their skillset and insures them against bad financial outcomes much better than just a bandaid patch.

I have never understood the attitude/insecurity in people who have the self-ability to become financially successful yet want to deny their kids the same satisfaction and privilege.

[zolotiyeruki]

If you give someone millions of dollars that they haven't earned, it turns out badly. See all the former lottery winners. It's not really up for debate. They don't need to struggle, most of the poor lottery winners had plenty of struggle.  But you do need to learn how to learn, be productive and successful on your own. Then you will know what to do with a million plus dollars from mommy and daddy. You wouldn't tell a kid the first day of school that no matter what they do, you are going to change their grade to an A. You do what you can to help them learn how to get an A for themselves.  Same principles apply.

Sure, but I'm not proposing that. I'm proposing a lifetime stipend for food/housing/basic needs. Like, in current dollars, $3-4k a month. You're not going to fly to Bora Bora and make it rain at the strip club on that kind of money, and you won't even be able to afford your own place in a really fancy area, but you won't have to worry about being homeless if you decide to have a third kid and then you lose your job or something.

I guess I don't see the downside of completely eliminating the risk of being destitute, unless you think that struggle and suffering (with fear of poverty as a motivator) is somehow good for people.

The reality is that housing, food, clothing, and electricity cost something.  Their status as necessities doesn't change that.  And TANSTAAFL.  Somebody is bearing the burden of providing it, no matter how "free" it may seem.

We already observe hedonistic adaptation everywhere.  And the perception of that "Free" housing quickly transitions from "what an amazing gift!" to a baseline expectation.  And when an able-bodied person expects stuff for "free," even if it's a necessity, that's entitlement.  Why does an entitlement attitude bother me so much? Because there's no such thing as "free."  "Free" really just means "paid for by someone else."  It quite literally means you are expecting others to work, without compensation, for your benefit, while you do nothing yourself. 

There's a word for that: slavery.

Now, if you as a parent want to work and sacrifice your own life so that your own kids can live without having to work, that's your decision, but it's not a choice I'm comfortable with.  I see the difference in how my kids treat things they get for free vs what they spend their own hard-earned money on, and it's a night and day difference.  Whether it's clothes or toys or food or even their own family members, there's a tendency to take the free things for granted.

[wageslave23]

But by that logic you should never give them as much as an old potato sack to wear while they walk barefoot to school, right?

I mean, if your goal is that your kid do absolutely everything themselves with absolutely no help ever, I guess that's one way to look at it. I know that for many people, no amount of trying hard will let them save enough to buy a house in their hometown someday, pay for college for their kids, etc.

In the meantime, you and I are sitting around collecting dividends we'll never spend. Seems kinda stupid to me. There are a lot of people in the world trapped in dead end jobs who would love to start a business, or try their hand at being a musician, or work as a teacher and make kids lives better, salary be damned - but they can't because grandpa thinks he'll ruin their lives if he gives them any money.

I also tend to disagree with the weightlifting analogy, because for most of us here, the financial goal is not to have as much money as possible, unlike lifting, where the goal is to constantly be able to lift more/constantly improve. Deadlifting your PR and investing so you can have enough to not work anymore are very different things. Nobody ever hits a 200 pound bench press and then calls it a day because they hit their number.

Edited to add: Tax loss harvesting so you can qualify for ACA subsidies (or Medicaid) is something a lot of folks here do that is IMO no different than collecting welfare. I have no problem with either one, really, but let's be honest about who is and isn't suckling at the public teat.

-W

The weight lifting analogy means that lifting the weight is not the goal, just like having money isn't the goal, it's building muscle. The goal is for your kids to grow skills to be self sufficient.  If a mother bird wanted to, they could keep bringing worms to the baby birds and they would have no reason to leave the nest, but it would be a pretty pathetic bird that never learned to fly on its own.  Not to mention that generational wealth is usually lost by the 3rd generation.  So you are creating a stunted person who won't have the skills to be successful and won't have the resources to support their children. 

You keep making this strawman argument that the parents should give them nothing and make their lives harder but literally everyone on here has said that you do choose to make their lives harder (go to school, eat vegetables, do chores) and you do give them things (help with their homework, food when they are young, help with college expenses, etc).  It's just that these things are strategic and all with the end purpose of creating a functional, independent, healthy, and happy adult.  Once they have achieved that, then yes giving an adult child money so they can work to help others would be great.  That's basically what we all do when we support a ministry or charity, the difference being those individuals running the organizations have presumably already matured into self actualized adults and we aren't stunting their growth by helping them support their cause.

[Redherring]

Concretely what we have done/are doing/ will continue to do:
- Paid for tuition for college and grad school. This naturally will stop upon graduation.
- during education in HCOL city, pay for rent (but all other expenses covered by DDs part time work, and jobs in summer break. This will stop upon graduation/ first own paycheck
- Invite her and pay for amazing family vacations and experiences. This we will do as long as we all  enjoy and participate (so no, we wont give her 10k trip to Hawaii without us!)
- Seed money to invest in ETFs. Here we debate if we should add more. We gave her 25k some years ago, she has since added another 10-15k of her own hard-earned savings. We may get her investments to 100k and she will need to save, invest and grow it from here
- we will like pay for one-offs, like her downpayment for a home. And also likely for her first (used) car
- if grandkids one day, could mean 529 for them too

What we wont do:
-send money every month/year to subsidize an inflated lifestyle once she is launched
- pay for/ contribute to a home in a neighborhood that will lead to inflated lifestyle. It must be modest/reasonable for her to pay mortgage, taxes, upkeep
- pay for new/clown car (we ourselves drive a 2011 car we bought used)

Now, this hardly has any impact on our finances, it does for her, but we try to not spoil her in the literal sense of the word. Where I am uncertain is if/when to make more substantial transfers. Maybe pay off the mortgage once she is 35-40? Contribute to a retirement scheme?

[Laura33]

But by that logic you should never give them as much as an old potato sack to wear while they walk barefoot to school, right?

I mean, if your goal is that your kid do absolutely everything themselves with absolutely no help ever, I guess that's one way to look at it. I know that for many people, no amount of trying hard will let them save enough to buy a house in their hometown someday, pay for college for their kids, etc.

In the meantime, you and I are sitting around collecting dividends we'll never spend. Seems kinda stupid to me. There are a lot of people in the world trapped in dead end jobs who would love to start a business, or try their hand at being a musician, or work as a teacher and make kids lives better, salary be damned - but they can't because grandpa thinks he'll ruin their lives if he gives them any money.

Meh.  Not really.  When your kids are little, you give them as much support as they need to succeed (emotionally and financially), within your own available means.  The "right" amount is always in question, so we make the best judgment that we can.  For ex., for our DD, we spent $$ on testing and some "brain training" stuff and short-term family therapy for her ADHD so she could learn to manage herself and we could learn how best to manage her.  OTOH, we didn't send either kid to private school, because we think there is value in public schooling, and the schools were "good enough" (even if they don't have pipelines to MIT).  Other people with our means send their kids to private school and hire counselors/tutors on an ongoing basis.  Who's right?  Neither?  Both?  You do the best you can with what you have, and you hope it's the right call.

The older they get, the more you let them handle, and the less support you provide.  But that doesn't mean you ignore needs when they come up; you just have to evaluate the circumstances and try to figure out what's best for the kid.  Right now, DD hates her job.  I could easily cover the costs of breaking her lease and hire movers to bring her home.  I'm not, because how is that going to help her learn to manage hard situations?  So instead, I'm doing a lot of listening and emotional support.  But if she runs into a serious problem -- like a major mental health break -- you can bet your ass I'll be swooping in and paying whatever is needed to get her help. 

I really don't know many of the "gee I'd love to be a social worker but grandpa has $20M and won't give me a penny" scenarios.  It's more like "I have a couple million and think I'll be ok for retirement but who knows about long-term care, and grandkid isn't making a lot but seems to be making ends meet, so I'll give them a few hundred bucks for Christmas and birthdays for a treat."  The people I know who wanted to be social workers are social workers.  The parents I know who have kids in low-wage job are supporting those kids in the best way they know how (whether that's "give money" or "do not give money") -- and where they provide monetary support, they're doing it to the extent they can without jeopardizing their own retirement.  (As I mentioned before, my stepbro lives rent-free with his mother because of his mental health challenges, and my mom and stepdad's first wife both gave his sister -- the low-paid family therapist -- six figures to afford a house post-divorce.)

We are all supporting our kids the best we know how -- it's just not black-and-white.    Sometimes it involves giving them money.  Sometimes it involves choosing not to give them money. 

[RetiredAt63]

And sometimes it means helping the grandchildren.  DD got support through university,  now I'm putting the maximum into my granddaughter's RESP so my DD doesn't have to worry about it. 

Plus support where appropriate.  I told DD a long time ago my job description was to help her grow up to be a functional adult. Now I'm semiretired from mommimg and am active grandmother instead.  But I do things that help her that are not money.

My big financial help to her is being financially healthy myself so she doesn't have to carry me financially.

[former player]

And sometimes it means helping the grandchildren.  DD got support through university,  now I'm putting the maximum into my granddaughter's RESP so my DD doesn't have to worry about it. 

Plus support where appropriate.  I told DD a long time ago my job description was to help her grow up to be a functional adult. Now I'm semiretired from mommimg and am active grandmother instead.  But I do things that help her that are not money.

My big financial help to her is being financially healthy myself so she doesn't have to carry me financially.

Maybe, but also please don't underestimate the financial value in being an emergency back-up carer for Mango.  The worth to your daughter's working life in having someone like you to pick up the slack so that her work isn't interrupted by unplanned caring responsibilities is enormous - it's often one of the things that derails working women's mid-careers.

[reeshau]

I told DD a long time ago my job description was to help her grow up to be a functional adult.

This is exactly what I tell DS.

[crocheted_stache]

I didn't back-read this whole thread. I have perspective to offer as someone who has already been on the receiving end.

I have one younger brother, and I've always been the responsible one.

It was pretty clear from pretty young. As a teen, I earned a little money babysitting, and it stacked up along with allowance and birthday gift money. Every so often I'd ask my dad to deposit anything more than I wanted to carry into my savings account. It might have paid for a few college textbooks, but it mostly didn't pay for whatever my classmates indulged in as teens. I certainly didn't rush out and get a car.

Brother saved money from gifts and summer job eagerly, but only until he accumulated the money necessary to buy a Nintendo.

It absolutely helped that my parents paid for my college. I finished in four years (somewhat fast for my major and my school) and, as far as my parents were concerned, under budget in terms of rent and household expenses. I didn't need to take a job while studying, which probably helped with getting through a rigorous curriculum on schedule. I did eventually take a part-time job on campus, mostly during summers. The experience, generally related to my field, was at least as important as the so-so pay. My dad, especially, resisted the idea of me taking any kind of customer service job out of concern for my safety. Whether his concern was misplaced or not, he had that luxury partly because he could pay for my tuition, rent, and groceries.

Starting out with zero debt and an employable degree meant I could start stashing straight out of the gate, and I did. With my boyfriend (later promoted to husband), we got together most of the 20% down payment for the  HCOLA house we bought at age 25. My parents contributed at this point, too, whatever was the tax limit for gifts that year for two givers and two recipients. I don't think we asked for the help. We could probably have gotten here on our own, but it would have been a little thin the first couple years when we were renovating and then between jobs for a spell during an economic downturn.

Since then, we've accepted some relatively small gifts—think $100—because they have no idea what kind of stuff we'd want for Christmas. (Nobody in the family needs more stuff.) We don't argue when my parents invariably pick up the check in a restaurant. They shrugged and split the tab with my new in-laws for our <$1000 wedding, although we never planned on them doing that.

I've learned personal finance beyond "spend [a lot] less than you earn," mainly from library books, blogs, and podcasts. I anticipate but am in no hurry to inherit half of my parents' substantial 'stache, and I don't need any of it to FIRE tomorrow. It's logistics, not money, that ought to be sorted a bit better before I pull the rip cord and retire.

There's another whole chapter, maybe for an eventual journal entry/series, about Brother. He has been less successful, probably due in large part to autism that was only identified in his 30s. My parents do still assist him, although he managed to support himself for some time with a series of low-end jobs. I don't really blame him for hating jobs like those.

I don't know if he's a spendthrift, because he's never earned enough to cover expenses with much to spare. I do know he's disorganized—which is different than irresponsible or reckless. He's reluctant to ask for help, not least because of the judgement that often accompanies it. Dad definitely doesn't understand my brother, and if I'm being honest, I only kind of do.

To get back to OP's original question of giving money to their daughter: helping with tuition and a down payment when the time comes won't inevitably produce a spendthrift or "broke lottery winner" flame-out.

You'll know, and you may know already, if her money tends to go to savings and groceries, or to a spendypants car/phone/coffee habit/whatever. You'll  also have some sense whether a down payment will be on something she can handle. For the right young adult, judicious assistance can be a real gift and a boost along her own trajectory to prosperity and FI.

[waltworks]

It sounds like how you were raised didn't have a lot to do with your adult financial/life decisions there to be honest. Nature/nurture debate, anyone?

_W

[Wolfpack Mustachian]

It sounds like how you were raised didn't have a lot to do with your adult financial/life decisions there to be honest. Nature/nurture debate, anyone?

_W

I'll definitely jump in on the nature nurture debate. For myself as an anecdote, it was either nature or nurture from the standpoint of almost purely example vs direct instruction.

My parents were certainly frugal, but they didn't really share frugal information, budgeting information, savings tips, investment pointers, etc. I grew up very much naturally frugal.

That being said, I was given tremendous advantages growing up. I was given a vehicle, helped with college, and basically had things set up where I didn't need to get a job in high school or during the school year in college, yet I remained frugal.

Despite all that and the lack of direct instruction, I am pretty frugal. I naturally hate wasting money. I was talking with DW recently about how I can't fathom how people go into the grocery store without paying attention to the prices, for example. My biggest financial mistakes were not investing, investing poorly, etc.

It's a topic that's important to me because I feel like I know how to teach my kids financial information, but I'm not sure how to teach them to care about frugality.

[Turtle]

Chiming in with something I haven’t seen discussed yet; warning grown children about pre-tax accounts they stand to inherit.

I’ve been vague, but I have warned each of them that there is likely to be traditional 401k money coming their way and that it would be in their best interest when the time comes to look into their options as far as spreading out the tax hit.

How much will of course depend on several factors, but there’s a good chance that the amount will be high enough that they’d benefit from tax planning. I’ve done some Roth conversions, but am struggling to do enough of them to keep up with the market increases.  Fortunately in my case between step kids and bio kids, splitting 5 ways and then having 10 years to spread out withdrawals will get it down to a more manageable amount per person.  I wanted to give them a heads up regardless.

There’s not going to be any monetary gifts from me until I’m past needing to keep income low for ACA, so I’ll be revisiting that later.

[TheFrenchCat]

Our philosophy has mostly been to pass down what our parents gave to us.  So, education and help buying a house, though we're not sure exactly how that will play out.  We bought our house at a steep family discount, with some non-enforceable strings attached.  We would never sell it outside the family, since it's been in the family for generations, and only for a similar discount.  So if DD wants to live here when she grows up, she probably can.  If not, we may help with a down payment or something similar.  But we probably won't tell her anything certain about that till she's older.  We didn't know we'd end up here until a couple months before we officially bought it. 

But this thread has given me a lot to think about, and I like what @RetiredAt63 said about the best gift is being financially healthy ourselves. 

[crocheted_stache]

It sounds like how you were raised didn't have a lot to do with your adult financial/life decisions there to be honest. Nature/nurture debate, anyone?

_W

Some of both. My references for how much stuff costs were set first at garage sales, with 25¢ apparel and free boxes. My dad turns 80 this year and sometimes still hops on his bike to get around town. When I was a youth, the rode with me and made sure I knew how to look back over my shoulder without swerving into traffic. There were definitely frugal habits modeled and discussed. Did I learn everything? No, especially not about things like investing. There were books and blogs.

Is it in my nature? Also yes. There's no good reason for me to shop around for slightly cheaper prices on basic stuff, but I still have to stop myself from putting back something that's on my list because I'm not happy with the price. I was and still am a reluctant driver, and I'm fairly sure I get that from both my parents not only as a modeled behavior pattern but also as a matter of temperament.

[Dancin'Dog]

I always thought the proper way was to let the kids know you were loaded & that there were strings attached. 


;)  lol