During a recent dinner out, a friend mentioned thinking about buying a place with his fiance but mentioned that they'd have to get the money for a downpayment from his parents. It got me thinking.
My friend and his fiance do all right for themselves, I think. They have interesting careers, they tend to buy nicer things than we do and spend more money when we go out but overall they're probably ok. From discussions with them, I don't think they're focused on retirement at all, although I know they do save for bigger purchases. I also know his parents are quite well off.
But this to me is weird. They're thinking of buying a place but haven't been saving for it. They're just going to rely on his parents, who did not inherit their money, from what I can tell - his dad worked hard, started a business that ended up doing well, and now in his later years has money to help out his kids.
But my friend, we'll call him Alex, has not been making the same decisions all his life in a way that will enable him to help out his future kids in the same way that he expects his parents to help him out.
How is that cycle supposed to continue?
It was true in my own family, too - my grandfather started a business, invested wisely in real estate, worked hard every day of his life until just a few days before his death. He financially helped out all of his children in various ways - mostly by helping to pay for or providing housing or vehicles. My aunts and uncles expect this now (my mom doesn't but she did accept the help when she was a newly single mother with low-earning prospects). And so my aunts and uncles did nothing to save up for themselves or their children., and my cousins were raised to expect the same - only there was no money left to help them! In three generations, this family went from millionaires to welfare. Yes, quite literally.
Peanut and I expect no help from anyone. We don't expect to inherit money from anyone, and we're certainly not counting on it. When we buy a home, it'll be paid for with our savings, and we are saving with those kinds of purchases in mind. The help our parents can offer is practical, not financial - advice, the loan of a car when we come to visit. We plan to raise our kids the same way.
But when we were discussing Alex's comment later that night, we pointed out that most of the people we know DO get help from their families for non-emergencies. One friend's parents gave her a downpayment for a house. Another friend has been living at home ever since college, rent-free and not holding down any job for longer than a few months. Another friend has been employed by her father in one of those daughter-of-the-president type of jobs. Yet another was given a car as a random gift, just because.
My mother adamantly wanted to help with my wedding, and my father did too. I felt uncomfortable about it, but I did end up accepting both of their offers as wedding gifts - not as loans, and certainly not because we needed it (we paid for everything out of our savings up front). Aside from the traditional wedding assistance, I simply can't imagine having my parents help us out with anyone from now on - and I really can't imagine ASKING for them to give me a downpayment!
What do you think?