Should you accept money from your parents?

Should you accept money from your parents?

I read a few posts lately about generational wealth transfer, and now that I am in my mid 30s, I still have friends around who think nothing of having their parents pay their rent (“but I HAVE to live in a 2 bed place, and I can’t afford it!”), cell phone plan (“but it’s cheaper because it is a family plan”), or any other splurge (“they paid for my ticket to Bali otherwise I couldn’t have gone”).

My case is pretty different. I left home at 17, paid my way through college and have never received more than a little cash for birthdays from my parents. My mum paid for a one week holiday once, and when she came to Guatemala with my sister she also paid for our expenses. When I am in Paris I do stay with her and expect to be fed and pay no rent, which averages a couple of weeks per year over the past 15 years. She is a primary school teacher who gives a ton of private tutoring classes after school so she can save enough for retirement as she stopped working for 15 years to raise two daughters. So she has cash but doesn’t spend on herself much, and when she asks me if I need money, or if she would like me to pay for a treat I am talking about at the time (new laptop, flight ticket…), I always say thanks, but no way.

I couldn’t possibly accept her money as she works 60 hour weeks so I could go on holidays! Plus I don’t need it in the first place, but if I had a hard working parent and was in need, I’d try to hustle as they do before asking for help. She did lend me money several times so I could snatch an investment opportunity without having to go to the bank, and I repaid her every time, with a 4% interest that was favorable to both parties, as her savings account gave her 1.5%.

The only way I feel conflicted about accepting money from her is I know she will leave a lot of cash behind as she spends close to nothing, and that will be heavily taxed by the French government, so I’d rather enjoy her tax-free money today than give half to the state when she passes.

Does it change anything when your parents are loaded? I guess the guilt wears off as it “costs” them less effort and % of their net worth to pass on their wealth to you.

My opinion on that is often, the trade-off for giving you money monthly, when paying part of your rent or utility bills is that you have to see them once a week, or holiday with them in summer. Remember Gilmore Girls when they had to have dinner once a week with the grandparents or they would stop paying college tuition at Yale?

That puts you in a beggar’s position. I have seen parents give money to their adult kids every time they visit. So are you really going because you genuinely enjoy your parents’ company or you need cash?

Parents, you are not doing your kids any favors by doing that. You are maintaining them in an artificial lifestyle they could not afford on their own, only resulting in them never having the urge to earn enough to deserve such lifestyle and becoming lazy entitled adults.

We never received cash from my grandparents, but every year, they would take the whole family somewhere nice, for a week long holiday. All 20 of us in a 5 star hotel must have cost a pretty penny, but I would rather have the memories of those fabulous holidays, than an inheritance in the bank and no family memories. When we would visit, the table was always full of good food and expensive wines. Yet the only thing they paid for their adult children was an education. No downpayment, no car, they assumed that once you had a good set of skills, you were good to go.

 

So for me, it is a strong NO on financing splurges, or receiving monthly money to live an inflated lifestyle and pretend you earned it. However, looking at the tax benefit of passing on wealth to your kids as you are alive, I’d be willing to accept a downpayment, or parents funding my kids’ college fund, or a stock portfolio. Not money to blow up, but money that will otherwise be partially confiscated by the state, as a bitter thank you for all their years of hard work and diligent saving. I would like my mother to die penniless, having passed all her estate to her daughters, while we would cover her health expenses in her last years. I think it is also kind of nice that your parents help you buy your forever home while you are young, so you can have memories with them in the home, instead of having to move every time you add a child to the family.

 

What do you think? Are you a young adult still accepting money from the bank of mum and dad? Where do you draw the line between spoiling and assisting?

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