by Rebecca Mallory
When is it a good idea to lend adult children money? As young marrieds, we never had money. There was a time when we had three small kids and were working four jobs between us. We borrowed $5,000 from my husband’s parents for a down payment on a house and eventually paid it back. But we never even thought about borrowing another dime from parents or family. Let me just say up front, that I am no expert on this subject. All I know is what I’ve experienced and heard from close family members, and friends. There are countless books and lectures dedicated to this sticky little family subject that might give you much better advice on the subject of money and adult children. However, you may find these examples helpful.
When my husband and I got married we were beyond dirt poor. Though we both had college degrees, we had no real job and scraped by. I was working part time for an orthodontist, and he was working at Wendy’s. Several months later we wanted to surprise his parents and go to their home in San Diego for Thanksgiving but Dave couldn’t get off work. We went anyway. By now I was 6 months pregnant. When we got back home Dave had been fired. Duh… Really? What did you think would happen? I’m sure his parents were indeed “surprised” to realize how irresponsible their kids were to make such a dumb move. He eventually got another job which turned out to be a blessing and the beginning of his 33+ year career. Still, it was a dumb move.
Fast forward to today where we’ve learned some difficult life lessons but are in a much better financial position. So a few years ago, we decided that any extra money we had would be used to help our kids rather than having fancy cars, travel, etc. We’ve “helped” all four of them to some extent with interesting results. If we could rewind, we probably would not have made that choice. It’s been more stressful than we would ever have guessed. It’s a subject that I have discussed with many “empty nesters” recently. How do you handle money with your adult children? Especially married children? Their answers have been telling. I’ll relate a few cases to you and let you make up your own mind. Perhaps you have your own story?
Couple #1: “We have three married daughters and one son with families of their own. I don’t know about your family, but sometimes we don’t think alike! We do things differently and have different expectations. Nothing is so glaring as when it comes to money. Lending our kids money has put a strain on our relationship because we both “assumed” that we had the same intent and goals. Not so! We don’t know if we’ll ever see that money again which also puts a strain on our marriage. We just thought our kids would respect us enough to see that we need it back as soon as possible. They think we’re thoughtless and stingy. It really hurts.”
Couple #2: “We offered to co-sign on a house for our kids. It was right after the big foreclosure fiasco and knew that they wouldn’t be able to qualify for a loan without us. Why did we feel it our job to “fix” their problem? If you can’t afford it, you can’t afford it. We would never have thought to go to our parents to help us with a house that we couldn’t afford on our own! They were grateful but seemed entitled to our money. They even alluded to the fact that they would have to live with us if we didn’t help them. We want them to have independence! Did we make the right move or are we just enabling them?”
Couple #3: “We borrowed money from our parents when we bought our first house. It took us ten years to pay it back but we did. It felt so good to pay off that debt. So we lent money to our newly married kids, assuming fully, that they would pay us back. First mistake. They were shocked that we would expect them to pay us back. It’s been eye-opening to realize the different expectations. Reactions have been varied. From a “you owe it to us” attitude or “you can afford it so just give it to us” to a real extreme of ” you need to give us X per month” with no explanation of where that money is going and no accountability. It was shocking and hurtful. They told us that they were hurt and don’t want to see us. We haven’t spoken to them for two months and they live a mile away from us.”
Couple #4: “We’ve given our newlyweds so much money that we’ve lost count. They just expect it now. Have we helped or hindered their success? It’s caused problems with our relationship with them and between my wife and me. I’m truly sick of it but don’t know how to stop for fear that they won’t let us see the grandchildren if we rock the boat in any way. We feel totally trapped.”
Couple #5: “Our situation is easy. We just don’t have it. Our kids have had to plain figure it out for themselves. Some did, some didn’t. It’s not our problem though. We honestly couldn’t help them financially. We just told each of the kids that we’d pray for them and hope for the best. Guess what? The ones who truly wanted to figured it out did, because they had to. It was often painful to admit that we flat out couldn’t help them. But as heart-wrenching as that was at the time, to see the lessons they’ve learned through hard knocks and struggles, has been rewarding in and of itself. Why did we try to protect them from those life lessons?”
Each of these couples have learned hard lessons with married children. If you listen to
Dave Ramsey or any other financial guru, I’m sure that in most cases they suggest to refrain from lending money to your adult kids. Obviously, there are extenuating circumstances but if you’re like me, YOURS are always the extenuating ones, right? It’s painful to watch your children struggle and suffer. Especially when they have little kids of their own. Sometimes I would like a “do over” with my kids which isn’t possible. But we’re all here learning together through the successes and the failures. Giving your children autonomy over their own lives seems to be a priceless way to handle sticky situations including money. There are no right or wrong answers. Only the ones that works for you. I would love to hear your take.