Come across a few trains of thoughts recently, I was brought up with the view that your parents are financially responsible for you until 18-21yo then afterwards, if you want to live at home you pay board.
Some of my friends have received lump sum (circa $20k) when they turned 21, they could use it anyway they like.
Others have parents gift them the deposit they need to buy a fancy house
I don’t have kids yet but interested to hear other people’s point of view.
No kids and never will. I'm spending every cent I have on enjoying my life.
I'm only 24 years older than my kid, so I'm not sure about inheritance.
I think the most important thing to provide is skills, independence and a loving home.
I've just recently bought a place as a young person so let me give my opinion on the whole housing affordability issue.
The first thing is, most people who are complaining about house prices aren't even looking to buy a house. Most people I know who are serious about buying a house have been able to achieve that with a few sacrifices.
The age of buying a nice big house 15km away from the city in Sydney or Melbourne is over. So young people need to start looking in other places. There are plenty of places a bit further away from the city that are affordable and new. There's also the option of apartments, moving to more affordable cities such as Adelaide, Hobart or even Brisbane, and smaller dwellings in established areas.
My parents didn't help me financially. However, the most important things they helped me with are:
1) Teaching me financial responsibility - I was taught how to save and understand money from a young age. I knew how to shop for property, apply for loans, live frugally and therefore, had a deposit ready two years after graduating from uni.
2) Having a place to live - the worst enemy to saving is paying rent. My parents let me live at their place just chipping in for bills and food, meaning I was able to save a very large chunk (around 80%) of my income.
These things helped me much more than if my parents had just given me $100k. You know, sometimes kids like to achieve their own goals. Whilst many parents are altruistic and really want to help their kids, there is pride to individual achievement and not needing to take money from their parents.
Very good point about letting kids achieve their own goals. Being gifted a house/car is nice but there is a certain pride that comes from having 'made your own way'. This pride and sense of achievement then propels one to achieve more.
I grew up with my dad telling me "I won't be dependent on you (financially) when I'm old, on the other hand when you leave home I'm hands off too. When I'm old I just want to live a good retirement life."
But what he's done is prepared me with all the knowledge to make money (shares, managed funds, property).
He did give lump sum for my graduations and wedding and that's it.
I'll do the same when I have kids. I'll get the education until uni, give them all the financial-related knowledge I have and start them off with some savings I build up for them and off you go. Bye kiddo~ enjoy the life out there.
I'll only ever help out my kids when they have families of their own and need help -
deposit towards buying a bigger home, upgrading to a larger car, needing someone to look after children so they can work.
If however, they want to buy an off the plan apartment and furnish it with nick scali furniture, whilst going to Bali or europe every few months they can get stuffed.
Yes, but all thing being equal we're not planning on waiting till we're gone, there will be a few caveats to it also so it won't just be a free ride with no contribution.
We have a house we are going to turn over @ 18, if they move in it's not to be a share house or set up in anyway that can be lost. All bills will be set up as a responsibility. If they decide to have someone move in it will be set up under a tenant agreement. all bill pertaining to property will be paid in their name only and nobody else on behalf of them. Should they decide to stay at home for a while longer the rental income will remain in the setup not as cash to spend. It's not to be sold unless being used to upgrade with a real income not just what we provided.
An investment portfolio access will be also on a ruleset. (it will be enough to provide an annual income) this will be available immediately if they decide to continue study in higher education
or used to obtain a job or career. (Would rather them have the ability to concentrate on studies than try and balance say Uni study, assignment workload and a part time job).
It will not just be there to give spending money while deciding what to do with life more to give them the means to be able to accomplish whatever makes them happy in life.
Hopefully I will be in a position to guarantor their first and possibly second homes. As for inheritance, I expect them to be established by the time I go but will include them specifically in the will anyway.
not sure how I feel about this atm.
I made it myself with not much of a handout.
Worked 3 jobs etc
Got some investments now.
Kids may not appreciate it and just take it for granted which is not the way I would have it.
If they are responsible,perhaps they may get something.
I do realise that I will be thrown in an old age home eventually.
Do I want to be in an old age home whilst my kids are enjoying?
Hadn't thought about it. I was hoping to just go above treading water as a future parent by teaching my kids how to; read, write, research, do a budget, do more complex math, sell, handle challenging negotiations/situations and work in a team. Hopefully with that, I will be a good enough parent that they can support me instead.
Forget your kids. Teach them to be decent independent people instead of having everything spoon-fed to them. They get given everything they want and more.
Your kids are not the most importamt people in your world and they should not be calling the shots. The way superannuation and pensions are going, you need to be concerned about being a self-funded retiree as your first priority.
Your kids are going to waste money until they are mature (which for many is never). If you are in a position to help them out a bit after they have sorted out their lives for themselves, then maybe.
I paid board as soon as i was working. The current millenials cannot see why they should. They have this air of entitlement -like they are owed something. Yet they have already been given so much.
If you are lucky enough to have adult children who are millenials without this attitude, then congratulations.
However, many of our kids needs some tough love - love is also about teaching them that sometimes they have to do things they don’t want to do, That they have to take responsibility for their own actions, that if they work hard they will appreciate what they have accumulated for themselves.
If you give them it all, they don’t appreciate it. If you keep sorting out their problems then they don’t learn to work it out themselves.
My grandfather bailed one of his 10 kids out of trouble so many times handing over money to pay for all sorts of things he had done. It wasn’t until he said no more that that son grew up. That was in the 1960’s. It isn’t any different now.
My friends father had planned to have $1,000,000 for each kid when he died. He looked after his wife with dementia for so many years as he did not want to use his savings for them on residential Care for her. When he had a huge cancer operation, the 2 sons found out about it. They both said, Dad we don’t care about the money. We would rather you be healthy and Mum went into care using that money. Spend that money on taking care of you.
That is the type of children you Want to raise.
Does opening a Dollarmite account for them and then setting up a monthly transfer of $1 into their account, count? If so, then yes.
Dollarmites is a poor choice of bank account. It pays 0.01% and a bonus rate of 2.29% I would be opening an ING Direct account for them which currently pays 2.8% and teaching them about Ozbargain.
Yes, CBA has worked their loyalty/marketing magic on me as I used to have a Dollarmite account. I should hand in my OZB account in shame.
ING Direct would actually be a poor choice for them considering the minimum 1k pay deposit and 5 transactions per month requirements to get the bonus interest. UBank USaver + Ultra would be much better in that situation considering it only requires $200 deposited per month to get 2.87%.
$200 and $1000 are currently 200% and 1000% more than we can afford right now…
Or ME Bank saver which gives 2.90%? Would UBANK uSaver be better than me bank?
ME Bank only offers 2.85% now. They also require you do one contactless transaction per week, but fail to define when that week starts. Leads to some of people missing out on the bonus because the start date was on a different day than expected. Ubank is the best no-hassle option out there. You can also get an AMP3 saving account which has 3%, but that's a complete pain to use.
Thanks Tyrx. I will explore UBank.
ME Bank did reply to my email advising I need to do 4 transactions in a month (1st of month to 7th, 8th to 15th and so on). I dont need to do any transaction on 29th-31st of month. I must say ME Bank App is pretty bad.
The best option to save for your kids is to pay it off your mortgage, if you have one, and just keep a record in an excel spreadsheet.
I did a bit of research re this. I wanted an account where there were not to many requirements i.e. deposit 200 or 1000 every month. The credit unions had much better interest rate, up to 3% with only 5 or 10 deposit per month, however they only had 1 branch in NSW etc and you can't really prove identity from interstate, so we ended up with the commonwealth: not bad rates and minimal requirements compared to the others. We send $10 in every month.
With a mortgage in Sydney we don't have much extra. But we do plan to pay for the kids uni degrees or their hecs. Seems like a good investment. They will inherit our home after we are gone.
I am definately working towards leaving my kids inheritance. But they would have to earn it- by getting good jobs and good family.
One thing that I will ensure is that they not only have a good job with sufficient money, but an ability to sustain the cashflow, as I cannot see them living on social benefits- ever.
They have to earn, pax taxes and contribute positively back to the society, and I will make sure that they do not ever have to worry about having to buy a house.
Also, will pay for their education, anywhere in the world, for however long they want to study.
nope.
I was pretty lucky as my old man has a background in finance, so throughout my life he's been really focused on teaching me the ropes and was always transparent about all things money related (topic for another time, but it was just the 101 kind of stuff that should be taught in school). This in part meant I was brought up with the view that we are only a custodian of the family funds and to hold it in trust for future generations and for the benefit of people, some when you're alive and others once you've kicked the proverbial. This would never be at the detriment of our lifestyle, but we don't spend for the sake of it and everything must have a utility.
That said, I was also taught not to rely on being given anything, so I've structured my life expecting zip from the folks. I tend to agree with others here, how much the kids get will depend if it looks like they'll be responsible with it.
I'd help them to the best of my ability. I guess bringing them up to be independent is more important. I never received a cent from my parents, which I'm grateful for.
When it comes down to it, when I pass away I won't have a thought for my kids. That's just reality. So do what you can and don't stress.
Working for my own financial independence / early retirement - the children will be left with something nice, but not before being taught to value hard work and frugality throughout their young lives. Also more on a personal but related note, I've been an a**hole all my life, I want my children to be able to afford the luxury of not being like me.
Sadly, the people I call parents have decided to spend all their hard earned money on various holidays.
Those selfish aholes.
How selfish of them :-)
I’ve seen my parents’ accounts and assets and I bloody hope they don’t donate the majority to charity or the church. I’ve got no problems if they donate a portion of it but it’d be pretty slack if they left me and my sister with a pittance. They could easily set us up with a house deposit for a actual house on the lower north shore each if they don’t up their spending excessively and donate 40% of their net worth. Call me ungrateful or whatever but I strongly believe family wealth should stay in the family - leave charitable acts for tax time or for the ultra rich who get their names on buildings.
When it’s my turn to leave money behind I’ll be leaving it in a trust for my kids. I won’t be donating excessively because I can’t cure cancer nor can I make a difference compared to the Lowrys or the Rineharts.
My son has special needs so I’m planning to have my house paid off so he won’t have to worry about a roof over his head. I have to pay for therapy and a heap of other things that relate to his disability so saving is impossible.
My daughter will inherit everything me and my wife have when we pass. If she needs money before then I will happily help her out. My parents weren't wealthy, but what they left was enough to set me up for a good life and I'm able to live well in a mediocre job. I hope to give her the same.
I make sure my money works hard now so that I can quit job early and have financial freedom early.
If my kids want to get into property but do not have enough deposit, I can lend them at market rate.
If they decide to live with me, they can pay boarding fee and contribute to groceries.
How early is early? I came across the official retirement age recently, it’s depressing
Hopefully before 50.
If our cats outlive us, they're going to have very comfortable lives.
I reckon instead of leaving behind inheritance I'd teach them what my parents never taught me - the life skills and independence required to make your own informed choices. This would involve working for small incentives from a young age or having a system where they would earn money to be able to purchase the items they want.
With my parents it was more like "you're expected to be grateful to us for bringing you into this world so you should do everything we say", "kids shouldn't give opinions on things they know nothing about" to a 21/22 year old and "don't get a part time job or spend time learning to drive because studying is more important".
In our culture yes we do everything we can to make sure our children are better off thats including leaving them a place to live. So both myself and my wife are working towards that and we are planning to leave at least a 2 bedroom unit to each of our kids in a good area of Sydney …. If you play the game the right its not very hard thing to do even in the area such as north shore of Sydney with the current prices… and no we are not making millions either…. and we live in a unit ourselves at the moment.
I am actively working toward giving my kids an inheritance; in order of importance to me:
Strength across all those elements come from working as a team across generations and in my view a part of that means intergenerational wealth transfer.
Well I'm not mentioning those because these will be given to them by default, like my parents did with us… I think young people can do lot more in life and be free to do more when they know that they don't need to pay mortgage to have a shelter on their heads but rather spend their time on more important things in life!
Definitely. I don't agree with the "American Dream" style of thinking where "anyone" can make it. Some people make it, but by and large you don't have huge upheavals in the poor becoming the upper class. It may have worked in an era before paying for a house took 30 years, but it doesn't work today. Inherited wealth drastically improves the quality of your own life and greatly increases the chances of your own success, I think most parents will see value in their children's success. I'd like to set my family up with the best chance possible, and working towards that brings me more happiness than I would get blowing the money on holidays.
Amen …. well said!
We don’t have any kids yet but I’ve always intended to leave my kids with something better than what I received from my parents.
I’m not saying my parents are bad in any way. But they have not provided the best education financially to my siblings and I. They are pretty bad with their money in general. So I hope I am able to teach my kids better than just spending every single thing you have and borrowing in case that’s not enough.
I consider inheritance as 'good-luck' money. There are times when hardwork/education doesn't help and someone to back you up or give a little head start goes a long way. Having said that, more often than not, I have seen inheritances wasted than being used as an advantage.
At this point yes (aged 1 and 4), lets see how I feel at ages 13 and 16…
Being from an Asian background, of course. That's how most of us were brought up. Have also already stashed aside money for their education.
yes, lets live like homeless people so our kids can inherit several hundred thousand to millions of dollers only to not appreciate it one bit, buying and crashing a brand new bmw, wasting thousands more by buying their friends dinners and clothes, and then eventually ending up broke living off centerlink. great plan.
don't blame the kids, blame yourself I say if your kids end up like that … no offence intended of course. Parents are not there just to physically have children and forget about them … how kids turn up is larger depends on their parents…
This is true. But teenagers minds dont fully mature until their mid 20's. therefore most young ppl given large sums of money will have a high chance of blowing it
I am saving for my kids. But they're not getting that until they are at least 35. I am teaching them as best as I can to earn money themselves, being grateful to what we have, thinking about need vs want before spending. I guess in a way I am trying to correct mistakes I made. Took me until 35 to really learn the difference between need and want…
And yes am hoping this site will still exist by then and my kids are also actively looking for deals before buying! :)
No, could not do it if I wanted to. They won't leave home and refuse to wait for me to die and instead bleed me dry now. Last year they all kicked up because I jipped them on Christmas. I told them it was my present to me to have one day when I don't give.
A backyard wedding which was the first and last time my whole extended family was together since members of the family have died since? And having professional photos of everyone together? Worth every cent. Plus I didn't spend all of the inheritance there anyway - cmon, I am an ozbargainer.