What Do You Owe Your Kids?

My spouse and I started saving for college when each of our daughters was born. We've set money aside faithfully every month for the last 14-1/2 years. With a little luck, we're on track to pay for three college educations in full.

But then we're done.

My daughters will be footing the bill for their automobiles, weddings and home down payments -- just as my husband and I did. We're showing them how to earn, save, invest, spend and use credit wisely -- so if they dive deep into debt as adults, they'll have to swim out by themselves. We believe our job is to prepare them to be independent and productive adults, not to carry them financially forever.

A lot of baby boomers share that sentiment, according to a new study by MetLife, which surveyed three generations on family financial obligations: baby boomers (1946-1964); Gen Xers (1965-1976); and Gen Yers (1977-1990).

All three groups agreed that parents should support children through their college years (76%) and provide help during a financial emergency that's not of the child's doing (78%), such as an illness or job layoff. But the oldest group is less willing to subsidize their adult children.

"Young families are devoted to kids, whereas boomers have said, 'you know I paid for their education, it's time they take care of themselves,'" said John Migliaccio, director of research and gerontology for the MetLife Mature Market Institute. "The reality of retirement needs becomes more apparent for boomers because they're closer to it."

Only one-third of baby boomers received help with college from their parents, compared with 46 percent of Gen-Xers, but about three-quarters of boomers said they had supported their own children through college.

"A lot of young men went to college instead of going into army because of draft and the Vietnam War, and (college enrollment) started dropping off after that point," said Migliaccio. "Boomers saw the economic value of a college education; they got better jobs and realized how important it is economically. There's also an issue of increasing inflation in college education costs in that period of time."

But when it comes to support outside of education, boomers are less likely to step up to the plate. For example, just 44 percent of boomers felt a parent has at least some obligation to help their children with a home down payment, compared to 53 percent of Gen Yers. One possible reason: Gen Yers are just entering the housing market themselves -- 44 percent of this group rents, compared to 11 percent of boomers -- so they have more immediate experience with the difficulties of coming up with a downpayment.

As for financial hardship, nearly half of Gen Yers believe a parent has a definite responsibility to help their adult children, compared to just 40 percent of boomers.

And those credit card mistakes? Some 13 percent of Gen Yers feel a parent is "highly obligated" to bail out kids who get in trouble with credit card debt -- compared with 8 percent, of boomers. Those willing to shell out dough for kids in the red would offer no more than $5,000.

Moreover, 70 percent of boomers say enjoying retirement takes precedence over leaving an inheritance; just 64 percent of Gen Xers and 57 percent of Gen Yers agree.

Is this more evidence that boomers are the ultimate "me" generation? No, Migliaccio says -- they're just worried about their looming retirement: 86 percent of Americans surveyed believe they have a strong or absolute responsibility to accumulate enough money for retirement to avoid turning to family members for financial support as they age.

"Some people looking at it as, 'the best way to protect my kids and grandkids is to take care of myself and make sure I don’t become a burden,'" said Migliaccio. (Check out our slideshow below for five other surprising findings from the survey.)

My personal feeling is that subsidizing grown children sends a destructive message: "You can't do it on your own." Coming from a family of eleven kids, I had to be self-reliant by necessity. But learning to manage your own financial life builds character and confidence. That said, if my girls grow up to be the productive citizens we expect, and I find myself with a winning lottery ticket in hand, I might change my tune and spring for a vacation to Tuscany.

Tell us how you feel: What do parents owe their children?

Comments

[clover65]

05:47 PM on 03/23/2012

"77% of boomers feel no responsibility to leave a financial inheritance to their children."

This doesn't surprise me, it saddens me. I don't know if anyone else has the same experience (i.e., children born 1960-69) but I am floored by the fact that my parents find no pleasure in helping us out financially. We don't expect it and we never ask, but it's amazing to me how absent that is from their worldview. I find myself continually asked to respond to my parents as though I am talking to a WWII generation retiree with no safety net. Reality is two solid pensions, two social security checks, free health care and drug coverage. This pity party is also uni-directional; there's no affirmation that their children are somehow surviving on 60% (or less) of their monthly take home. My friends parents, by contrast, (WWII generation) started gifting 10K a year to their kids without strings emotional or otherwise. Their reasoning being that they can watch them enjoy it now or let them inherit it. A gift like that is so affirming; like seed money to fund an education or take a few risks you might not be able to otherwise.

[mmaxmaryjoe]

09:41 PM on 01/24/2012

And I couldent be prouder of you ! x member of the BIG BEAR 5

[PristineInPink]

11:31 PM on 01/23/2012

I believe kids deserve parents that put them first and be supportive... which is why I don't have kids.

[cgjmd]

12:44 AM on 01/24/2012

sorry to hear that your Baby boomer father didn't work out so well for you and you children. I am a baby boom (1951). I learned my ethics from my parents who did everything to make our family successful. Mom and Dad did their best to see we had whatever they could afford, grew up midlle class typical suburb kids. Catholic grade schools, public high for 3, I (me) finished catholic hS. Parents worked hard to pay for that. Not rich but learned to take care of ourselves, our family and so each of 4 kids did okay and are happy giving our families the same love we got. Wished dad had more time with me growing up but the reason he didn't was to benefit all of his family not himself. Family always close. Mom passed Nov.2010 and we wer shown again what treasures and riches my parents accumilate...all those who came forht for Mom and for my Dad at her passing. Wealth in family, friends and love given our family during that time and actually all our lives. Not all baby boomers are a me generation like you saw in your life. So sorry for you...and hope you continue to give your next gen better/

[aurasc]

07:13 PM on 01/23/2012

...continuation....
he has a nice "nest egg", yet still complains about how he should have more. he collects his "owed" social security, complaining it should be more...

i have been out of work for 3 years [altho i just finished graduate school, on which i spent my retirement savings rather than taking a loan...]. my husband & i have been struggling to feed our 2 kids, let alone set money aside for school...retirement or social security will not be options by the time we are his age. we will probably always live paycheck-to-paycheck.

he thinks we don't work as hard as he did & therefore aren't deserving. of course, our kids had a mom & dad who sacrificed 'all that' to be with our kids...unlike him who never even calls his grandchildren.

THIS is how i view the boomers overall...probably unfair to generalize...but i feel they are extremely selfish & have a lot of nerve to live-it-up while their kids & grandkids will be peddling for survival.

[aurasc]

07:04 PM on 01/23/2012

to me, boomers are the first "entitled" generation...watching my dad made me realize just how selfish that generation generally is. not giving up the high life life for family & running over anyone to get ahead in his career. viewing women as merely accessories, and any that were competitive were automatically bitches. he soared thru the 'ranks' by stepping on others and felt he deserved it. his goal in life was to retire into a "gated" community & buy a yacht.

he was laid off by merrill lynch in 2000, complaining he was "a year from being a millionaire and having his yacht", and again 6 months before his official retirement, throwing a fit blaming Bush. he travels at least 3 times a year worldwide and consumes a healthy amount of wine.

[LearningCommunity]

10:45 AM on 01/23/2012

What’s missing in these discussions is the notion of honesty and transparency.

Some parents are needy and want their kids dependent on them. Some parents are selfish and want their kids off the payroll as soon as possible. And some parents just want what is best for their kids. The point is,one-size answers are not helpful or practical. Every situation is different. Sometimes tough love is the best approach, sometimes it is not. Judge not, least ye be judged.

There’s a line in the move The Descendents I like, “you should give your kids enough money to do something, but not so much money they do nothing.”

So, what do I owe my kids? I owe my kids my best efforts to give them the skills they need to succeed. If I am a football star, like Archie Manning, I can offer great football advice and as a result my efforts can help create sons like Eli and Payton. If I am a businessman, I can offer great business advice. And If I am a carpenter I can teach my kids to work with wood.

But, Just because one is a parent does not mean they can offer good advice. This is where honesty and transparency comes in. Parents need to be honest with their kids about what the kids have done well and what the kids have done poorly. And Parents need to be transparent to their kids as to their own successes and failures.

[cromag]

09:25 AM on 01/23/2012

Baby Boomers had the best standard of living increase over their parents of any generation in US history. And what did they leave behind? they were the true consumer generation.
What are they doing with our government now? They take up most of the seats in government.

Taking the group as a whole I expect less than nothing for them. No SS or medicare, no chance at ever retiring.
My parents are boomers and helped out when i needed it or if they were able, being mill workers and all.

[DennyCrane]

09:12 AM on 01/23/2012

"Moreover, 70 percent of boomers say enjoying retirement takes precedence over leaving an inheritance; just 64 percent of Gen Xers and 57 percent of Gen Yers agree."

A lot of young people complain about the inheritance tax because they feel like they're entitled to what their parents have. To me, what your parents decide to give you should be seen as a gift, not something you're entitled to. They gave you life, a home, paid for your education, and perhaps served as a safety net for you when you lost your job or got sick. But all that isn't enough? Now you're counting down til they die so you can get your hands on all they accumulated?

[thrakazog]

11:34 AM on 01/23/2012

Everyone should complain about an inheritance tax. You are correct, nobody is entitled to an inheritance. Especially the government. The money was taxed enough when is was earned. If somebody wants to leave what is leftover to a loved one the government should keep their mitts off it.

[kmchambers]

11:24 PM on 01/22/2012

This article ignores the stark reality of we are all in this together. We pay it forward and backward generation by generation.thereare no free handouts,but neither are there any self made individuals. We are a family, we are the American family.

[TheLOVEHELIX]

10:40 PM on 01/22/2012

Anyone that has kids on purpose is a psychopath.

[TheJoyOfTrolling]

11:41 PM on 01/22/2012

Anyone that has kids accidentally is stupid. With those possibilities for parents, kids are doomed either way. Might as well leave them some money and make it easier. The ones with trust funds will be a little less doomed.

[AsianAmericanWoman]

09:37 PM on 01/22/2012

I will owe my kid everything. A baby doesn't ask to be brought into this world. Why would anyone? Except for a privileged few, the mass of men live lives of quiet desperation. Parents force life upon their kids. It's their duty to ensure the quality and happiness of that life. Whether my child goes to medical school or ends up living their life in an institution for the mentally challenged, I can and will gladly pay in full for it. It's not a question of who owes what to whom. It's a question of taking responsibility for one's actions. Procreation is MY action. I can choose abstinence. I can choose birth control. I can choose abortion. Creating life is my decision - not my child's, not society's. Why should anyone else foot the bill for it?

[Ianmac37]

08:37 PM on 01/22/2012

Due to the poor economy (thanks to George W. Bush) and the prospects that a complete recovery will not be quick or complete (thanks current Republican House that is voting down everything Obama is trying to do, just like the Republicans did to FDR during the 1930s) I find myself at 75 years of age with two 40-something kids living at home and burning through everything I had managed to put away. Well, I can do that as I have a decent retirement plan; one of the kind that have disappeared with the shift to 401ks and IRAs for the boomer generation. My children have little prospects of getting a decent retirement. Only the rich will survive and we will see the kind of fight all over again that brought us unionized jobs and those good salaries and decent retirement plans. Too bad you voted in all those Republicans (Reagan, Bush, etc) that killed the middle class of America and put us back into the 1920s, with the same result as the last time. I will be dead before you all wake up and throw out the religious radical conservatives with their phony crys of "socialism" every time a decent program is proposed. My children will suffer because many of you believed the lies from Fox "News" and scum like Rush Limbaugh or Glenn Beck.

[Zzarchov Kowolski]

08:16 PM on 01/22/2012

well, I didn't receive a cent from my 'boomer' parents, I went into the army, paid for college and got my own job.

I also don't plan on paying a cent if they run out of THEIR inheritance from my grandparents who saved every penny, also went through the army and left my parents with a sizable inheritance.

I only think "boomers" need to think about how they help out their kids by comparing it how their parents help them. Did the father of the bride pick up their wedding? If so, shell out for your kids. Did they inherit their fathers house and nest egg? If so make sure you have a paid off house and nest egg to leave your kids.

Its not rocket science.

[RetiredRN2]

07:57 PM on 01/22/2012

What do baby boomers 'owe their kids'? You gotta be kidding. Most of the children of baby boomers don't buy Christmas presents for their parents, don't call their parents, and expect everything. Baby boomers, don't reward 'bad behavior'. They need to realize that you are not a 'free ride' for them. They need to become independent. What better way than to show them that 'hard work' is just that. Hard work comes with many rewards, including self respect.

[TheJoyOfTrolling]

10:32 PM on 01/22/2012

If I were your kid, I wouldn't call you either.

[kerryandjanie]

07:55 PM on 01/22/2012

I disagree with most of the posts here. If you chose to have children, then it is your duty as a parent to at the least allow your child to live at home for a couple of years after high school without paying rent so they can attend a community college and work part-time to pay for books, clothes, transportation, etc as long as they are working at getting good grades. They will have student loans to pay even with scholarships paying part of their tuition. Why would you want to pile rent as an additional burden on them while they are trying to get a degree or certification in a trade? Do you really want to teach them to be "independent" right out of high school or do you really resent that they might get established in a career or trade that will let them be self sufficient for the rest of their lives without the added burden of having to work more than part-time to pay their parents rent? So selfish and sad.