I believe as a parent you need to support your kids as much as possible. But it is a fine line of teaching them, and grooming them to be independent adults with the tools necessary to be sucessful. The reason I am writing this is because I sometime see instances where parents are failing their children.
As a Michigan loan officer and Michigan RealtorI learn a lot about a persons financial well being when they come to see me. I know their assets, their income, their expenses when they come to me about a mortgage. As a Michigan Realtor I don't get into all of the personal financial information. But we can deduct from talking to our clients their lifestyle and their theory of money. We can even tell things about our clients by their credit report. Where they spend their money and how much they spend at certain stores.
One of the biggest downfalls I am seeing lately is where the parents are putting their financial future in jeopardy to help their kids. It is a great thing to give everything you can to help your kids. BUT Some of my clients have gone over board and have their finances in turmoil. All because they were supporting their kids and their overspending lifestyles. You have to teach your kids to live within their income. By bailing them out and ruining your credit doesn't help the family. It only creates more problems.
Maybe I am not one to talk. We support our son Ryan to the fullest. A couple of weeks ago we moved him from the suburbs of Chicage into the city of Chicago. It was 3 flights down and 4 flights up. My wife was exhausted and needed a day of rest after working herself to death for three days. When he first moved out there my wife Marianne bought him everything he needed. I think she fully furnished the apartment all the way down to the blender. So I may not one to talk. I want to give Ryan everything I can.
But I don't want him to live beyond his means. I want to retire someday. I want to take some trips. I want him to have a great life but like all of us he too will have to work for it. We were not born rich. We are just average Americans. Working hard to get by.
At some point as parents we have to cut back the purse strings. The exception I believe is if you can financially afford it. If you have the money by all means give freely when ever you want to. But if you have to borrow the money or refinance your home to support your kids free wheeling live style. You need to step back. Think about carefully before you do it.
Again I believe you need to help your kids out when they lose their job, or have medical problems if you can. But I'm not saying pay for their mortgage when they are sitting on the couch at home.
When you go to help your kids out of a mess. Step back and think about it. Sometimes the best thing we can do is let them learn on their own. I have had clients pay for their kid's apartments after they graduated from college ( three years after). I have had clients pay for their kids foreclosures (twice) and there were not special circumstances other than the kid living beyond their means. I have parents paying for their kids homes when the kids are in the forties. And the kid is pushy about demanding the money.
At some point they need to grow up financially. Cutting the purse string will make them learn the basics. I believe it is ok to help them out if you can afford it financially. But remember you have to have the money to retire. You should have the money to help the kids out. To bankrupt yourself or to go into foreclosure yourself for your kids may not be the best move.
But who am I to say. It is your life and your kids. What ever you do think before you refinance your home. Think before you take the cash out to give to your kids.
PS I am still getting over those flights of stairs.
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