Should Mommy and Daddy pay your cell bill?

Should Mommy and Daddy pay your cell bill?

“You can give a child resources, but you can’t teach them resourcefulness.”

This is one of the many gifts of being the kid of first-generation immigrants.

And as a parent, I want to instill this resourcefulness in my kids.

Am I in the minority?

I guess so.

According to Pew, nearly 60% of parents provide financial help to their adult kids.

The Bank of Mom and Dad

In the recent article Well Into Adulthood and Still Getting Money From Their Parents, the Wall Street Journal details two types of financial assistance: household expenses and a down payment on a home (aka Nepo-Homebuyers).

But before we dive in, I need to show my hand. I grew up lower-middle class in NYC. I attended NYC private school (on the equivalent of a scholarship). My dad’s employer paid a big chunk of my college tuition and I graduated with zero debt.

If you think of my family lineage in the terms Maslow’s Hierarchy you’ll see that my parents came to the US with a simple goal. Provide us with food, water, safety and stability – our physiological needs.

And thanks to their hard work, sacrifices and prudent financial planning, the bottom two rungs have always been off the table for me. Thus, I’m in the privileged position to tend to my psychological needs. And if everything goes as planned, self-actualize.

Which leads to a downstream question. What about my kids?

It’s all about the Netflix subscription

Now, back to the Bank of Mom and Dad.

It turns out that 14% of parents support their adult kids with “household expenses, such as phone bills and subscriptions to streaming services like Netflix.”

But that help extends well beyond being able to watch the Beckham documentary on mommy and daddy’s credit card.

About one-fifth of first-time home buyers get help from a relative for a down payment. And according to Redfin, 38% of home buyers under the age of 30 received help from their parents.

Die with Zero

In our household, Lisa and I have spoken about how we might address this in the future.

We earn well, while investing aggressively and don’t have particularly expensive tastes (besides renting by the beach).

So when it’s all said and done, there’s gonna be some greenbacks left in the pot.

We’re on the same page about not leaving a meaningful inheritance and are more inclined to Die with Zero.

After all, you’ve considered this, right?

So we’d like to help them along the way. Despite the fact that I secretly judged all my friends whose parents helped with their down payments, our kids will have the option to be nepo-homebuyers.

An open question is if we’d help support them if they chose a career that didn’t pay much (teaching, the arts, non-profits). Our hunch is yes; but then you get into questions of fairness, motivation, patience – and of course – resourcefulness.

Like I said at the jump:

“You can give a child resources, but you can’t teach them resourcefulness.”

Thankfully, we have some time on our side to figure this out.

Should we work together?

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