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anonymous
writes:Following a divorce over 20 years ago I haven't lived with children who are now both in their mid twenties. Over that time I have maintained a good relationship with them and have always seen and spoken to them regularly.I am now in the position where I can gift them each a 10% deposit for a basic starter home. As part of the deal, I have asked them both to come up with a few thousand each to add to my contribution, in order to show commitment and further boost the deposit.They both seem unwilling to start saving for this and would rather continue spending money on other things and paying rent.I am now starting to feel bad about insisting on a contribution from them and am thinking that maybe I should just give them the money. But that seems too easy and I want them to feel that they have contributed in some way.What should I do?
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female
reader, anonymous, writes (19 July 2013): "I am now starting to feel bad about insisting on a contribution from them and am thinking that maybe I should just give them the money. But that seems too easy and I want them to feel that they have contributed in some way."A real gift has no strings attached. If there are conditions then it's not a gift but a reward for good behavior, achievement or job well done. e.g. a boss giving an employee a raise or bonus. That's not a gift, even though it has goodwill attached to it, because it required the receiver to do something to earn it, it wasn't for free.like when my kids were young if they wanted a new toy or whatever I would say OK I'll get it for you but only after you have done all these extra chores or got good grades. In the end it wasn't a gift, even though I was happy to give it. it was a reward. Contrast that to a birthday gift where you give someone a present without them having to do anything.similarly, with your 10% deposit on a home for your kids. If you want it to be a gift then there shouldnt' be any strings attached. Just give them the money, regardless of what they are or aren't doing.by insisting on a contribution from them, you're saying this is not a gift, it's a reward. OK fine. No problem so far, right? ... but it still isn't working because it doesn't sound like your kids want this reward so they're not going to bother trying to earn it... then you are disappointed that they didn't earn the reward you wanted to give...if that makes sense?? it seems you're setting yourself up to be disappointed in them.
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female
reader, CindyCares  +, writes (18 July 2013):
 You are a generous doting parent, but the problem is that a gift should feel like a gift, not like an imposition. No point pushing on people gifts that they do not really want or ask for. Your 20something kids may not feel ready / fit yet for being homeowners, and I can't blame them at all. Too easy to say " but in my old times ". Times have changed, things that were extravaganzas or luxuries 30 or 20 years ago, have now become necessities of daily life, and they cost money. Cell phones,a car, PCs, travels... I am not particularly consumption oriented, or a slave to social trends, but I find myself now in need to fit in my budget things that I would have had trouble including when I was a young 20 with the salary and income of a young twenty ( luckily, I did not have to, many things like Internet or cell phones- did not even exist then ,LOL ).
You are only giving them a 10% deposit for a basic starter home, which means they would be saddled with mortgage for the remaining 90%. Which means that if they want to extinguish the mortgage soon, in 10-15 years , they would have to make payments which would leave an humongous dent in their monthly income ( unless they are VERY successful 20something ) and force them to totally alter their current lifestyle and/or future plans and make lots of sacrifices for something they did not even really wish. Or, they can take it slow, at 30 years, and get saddled for the rest of their life with smaller payments- and a starter house that pretty soon won't fit their current wants and needs and again, force them to economic cartwheels if they want to pay back the bank and sell it fast.
Don't get me wrong, yours is a caring thought and a generous intention, and if they were at another age and stage in life, probably they'd jump for joy at the idea. But now , to them, it only means that they'd need to scrimp and save and have to meet dates and obligations, for what ? for the satisfaction of being homeowners that can leave something to inherit... to kids that haven't even beeen conceived yet, not even in their minds :).
It does not mean they are irresponsible morons, just that at their current age and stage they have different priorities.
I'd let it go for the time being, and let them know that the offer is standing for ... whenever they will be ready, willing and able to become homeowners and also to contribute more substantially toward the deposit. ( I don't now in UK, here with a 10% deposit,... you'd probably end up paying in interests more than the property itself is worth )
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female
reader, anonymous, writes (18 July 2013): While you have good intentions, I think you are also being a bit controlling. It sounds like neither of your kids actually wants to buy a house and take on the burden of home ownership. They aren't asking you for money. Rather you want them to buy a house and you want to give them some money to do it and you want them to contribute as well. It is what you want and not what they want. Its one thing to give a gift. It's different when you are asking the recipient to take on a burden they otherwise wouldn't if it were not for your gift. Know what I mean? For example my grandma got along just fine without a cell phone. Then my mom gave her a smartphone as a gift. The phone was an expensive one too. Well now grandma has to pay a monthly fee in order to use that gift so she isn't exactly thrilled even though she appreciated the thought. That is money she wouldn't be having to spend if this gift wasn't given to her. In the end she kept the phone but stopped using it as she didn't want the monthly bills. My mom got upset that her gift has been wasted but what can you expect if your gift requires the other person to shell out their own money that they weren't prepared to and weren't planning on?Your kids are not interested in being home owners. I can relate. When I was in my mid twenties buying my own home was the last thing I wanted. I was busy traveling and building my career which meant I had to be mobile. I didn't want to be tied down geographically by home ownership. If my parents had pushed me to buy a home I would have said no. If they had put in their own money to buy a home for me against my wishes I would have been upset at the predicament they would be putting me in- not wanting to be ungrateful and yet this is not what I want for my life either.I suggest you drop this issue. Stop trying to control their lives. They don't want to become home owners, rather you want them to become home owners. Its not surprising they aren't cooperating. You cant fault them for being unwilling to shell out their money for something they don't want. If you really want to make a gift to them then why not just put that money into their bank accounts so they can do what they want with it. Or why not with hold the gift until they are ready to settle into home ownership whenever that may be.
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reader, der_zyniker  +, writes (18 July 2013):
If they're not willing to contribute anything they don't deserve your contribution. It's okay to help them, but if the house is for them, it should be their expense and not yours.
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female
reader, largentsgirl89 +, writes (18 July 2013):
 I am 24 years old and if someone offered me what you are offering them, I would completely understand and gratefully accept your terms.
They don't sound very mature, nor do they sound ready to be responsible for a home since they aren't willing to put forth the effort of a deposit. If they aren't willing to abide by your terms, I wouldn't gift them with it.
They won't appreciate it and it could put them or you in financial debt when they don't make the payments they're supposed to. The more money for a down payment, the less the mortgage payments should be. Most kids my age don't understand this and don't have the maturity to own their own home.
You are a very kind and generous person, don't let yourself be taken for granted.
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reader, Caring Aunty A  +, writes (17 July 2013):
 You are wise to ask them to contribute instead of handing over large sums of money that will only make them unappreciative.... Even though your gift will be viewed as conditional, having strings attached or a lesson in life; too bad! That amount of money is not to be sneezed at and blown away!? I too would like to see some commitment and maturity shown.
Be that this generation of children are less inclined to save and there are those that do; here we have children that would rather flitter away their money on senseless items and pay dead money on rent etc. Simply put, they’re not ready for the responsibility of a mortgage.
Now because you can see their apparent disinterest in coming up with a few thousand and how they live in the meanwhile, perhaps you are best to tuck that money aside for them in an investment account, until they realise what DAD was saying!? Here you can also suggest they contribute a monthly amount from their wages to be deposited into this account; that way they won’t miss it so much, plus they won’t be able to withdraw on this account either.
For me; you are not being mean and conditional, nor is this about tough love or lessons, I think the bottom line is, you want to see them soundly secure and able to take on this responsibility without losing it.
Take Care – CAA
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reader, Honeypie +, writes (17 July 2013):
 I wouldn't just "give it" to them. When I broke up with my first BF (at the age of 24) I moved back in with my parents for a short time while looking for a place to live that was practical and affordable. I payed rent, I bought some groceries and I cooked/chores as well as working full time.
About a 1 1/2 after I loved out I found a row-house for sale - the price was affordable but I didn't have the full down payment. My mom and dad "gave" that to me - and when I 5 years later sold the house and moved overseas - I gave them back then money they had "lent"/given me and they went on a great vacation.
If they aren't ready to work and put together THEIR end - they AREN'T ready to be home owners.
If you give them the money do you think they will "blow" it on "stuff" or do you think they would actually consider looking for and buying a home?
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reader, anonymous, writes (17 July 2013): dont give the money yet, they are obviously not interested in having a home of their own at the moment and will ask for it when they are more mature and have children of their own, I expect
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reader, YouWish +, writes (17 July 2013):
 I think you haven't decided whether or not what you're giving is a gift or a lesson. As a mom, I totally get your reasoning behind it, but I fear it may have an opposite effect than you were intending it to have. Some kids are scared of owning a home, which is a huge commitment. There is also that whole maturing thing most kids not naturally bent on good money management have to do which sometimes takes their entire 20's.
One thing you can do which would solve all of your problems is to talk to your bank to set up trusts for each of them. Place the money you wanted to give to their homes into that trust so it can bear interest, and place stipulations on that trust so they use the money for the purpose you intend for it.
The money in trust is there for homeownership, and when the time comes, you can designate it for down payment, closing costs, tax escrow, earnest money, and so on. You could dual-purpose it if one or both of them show any sort of entrepeneurial prowess as an investor or business owner.
That way, they won't blow it on shortsightedness (I'm guessing that's your fear!), you've gifted it, and it's there when they decide to take that rite of passage into home ownership, whether it's 5 years, 10 years or whatever down the line. The absolute beauty of a trust is that you can make repeated contributions to it if you desire, or re-classify it if they marry and have grandchildren, designating for college expenses or whatnot.
A long talk with your banker is a fantastic eye-opener for ways you can help out your kids while at the same time fostering that commitment and maturity you're hoping to cultivate in them.
Hope that helps!
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reader, anonymous, writes (17 July 2013): I think you should stick to your guns on this. My parents did a very similar thing for me and I was happy to contribute, but it doesn't sound like yours are at the moment. Maybe they will realise how amazing your offer is in time? But at the moment they obviously don't appreciate the value of your offer. If you gave them the money now, who's to say they won't spend it on something else instead of putting it towards a home? If I were you I would let them know the offer stands and you'll keep the money for when they are ready to start saving. It's the only way you can show them the value of the offer you have made.
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female
reader, shrodingerscat +, writes (17 July 2013):
 Since this is a starter home, they might not know that a larger down payment would mean smaller morgtage payments. Explain to them that the more money they save up now for the down, the less money they'll have to spend later for the payments, so they'll be able to do more fun things with their money instead of spending it all on the mortgage.
Young couples often don't have the life experience that older, more experienced people do. Help them out by telling them these things.
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