I wanted to talk to you about this article I saw today in the Wall Street Journal… It talks about the closing of another bank, the bank of “Mom and Dad”. I’m not sure when this bank even opened but apparently it had been doing a brisk business over the last couple decades.

 

   Did any of you have an account at the bank of mom and Dad? I know I didn’t… I had parents that loved me and loved me enough to help me develop a sense of self reliance. The way this article was written, it would appear that there are MANY people out and about in our society that have an ongoing account with their parents… It is purely a withdrawal account and is seen by many of them as limitless. The expenditures that the account covered where College Education of course but certainly didn’t stop there! They had line items of pocket money for Johnny while he’s struggling to get his education, struggling with what though was a bit unclear… Travel money, automobiles and down payment assistance for home purchases.

 

   Sounds like a pretty good deal, doesn’t it! This article just reminded me of the trend, I had heard about it over the years but hadn’t been thinking about it as of late. With the economy in the straights that it is, I would have thought that this practice would have been discontinued a year or more ago…

 

   I say it’s high time that people were expected to stand on their own two feet. I think its absurd that a parent would “HELP” their children to such an extent that they would be paying for an adult child to live on their own, ie. college living expenses or down payment assistance for a home purchase? If the individual can’t afford to purchase the home, they shouldn’t be helped into the debt shackles by well meaning parents. The mortgage payments for these homes are just the tip of the iceberg… They have to be appropriately furnished too… what about the utility bills, those are usually higher in a bigger more expensive home. How about homeowners insurance and property taxes, those have to be higher to… Was this really help or just a quicker way to wind up in to much debt?

 

   Who’s signing on those student loans? Is it the student? Usually it’s the parents, the student wouldn’t qualify. I just don’t understand… how is this helpful to the young person? I watch as college students that are friends of our family are brought back home at every opportunity and then provided with spending money and even trips out of state to visit other friends that are also college students? What a life… basically the young person is set up on their own, dorm or other housing, as if they were actually an independent adult. All of the freedom and very few of the responsibilities? I’ve taken to referring to this as the “Disneyland life”… My daughter doesn’t think it’s funny but she also knows better than to think she’ll be receiving any such luxuries after high school!

 

   Don’t get me wrong, I love my child just as much as the next guy and I can see why parents would be tempted to do this. I just believe that if you can’t afford it right now, wait until you can… I remember a saying that my Dad would say periodically when I was growing up – “Wanting is half the fun of getting”… This was usually dragged out of the closet about the time I was wanting something that I couldn’t afford to buy and he had no intentions of “Helping” me purchase!

 

   I recall a section of the book - ”The Millionaire Next Door”, discussing this subject. The author referred to it as “Adult child out patient care”, I think that years ago this was probably the first time I had heard of this being talked about as though it was a frequent occurrence. Having grow up in a modest home and raised by hard working conservative parents, this was a foreign concept! This books reference to this practice was that it wasn’t something that a person with a millionaire’s mindset would be doing. 

 

   “Adult out patient care”? As much of a temptation as it might be to help your children have everything their heart desires, don’t do it! My personal view of parenting is that it is my job to create a self supporting adult. In addition to self supporting, it would be nice if I raised my children to be productive members of society. Producing more than they’re taking and prepared to raise the next generation to do the same! Yes, I will do my very best to spoil my grandchildren but in a good way! Spoil them with my time and attention, something that I had a shortage of to give to my daughter.

 

   This concept of continuing to call our college aged adult children – “College Kids”, is doing a disservice to them. As adults they should have been prepared to work hard and achieve the same way that most of us have had to… Yes, when we see our children struggling to make a goal or reach a dream, we as good loving parents would blow in their sails to help them cross the finish line. This is a health way to really assist our kids, instead of doing it for them!

 

   All of this is only my opinion of course and you are free to disagree with me. I would even bet there are a few of my readers that would agree with me on 99% of things but still spoil their adult children with financial gifts. Forgive me but that is sad, stealing your children’s victories of independence… When there is a genuine need, the family should honorably pull together to help each other. I do hope to see the trends of these last few decades fall to the wayside, in favor of getting back to a more multi-generational style of living and cooperation.

 

   Times they are a changing and if those changes include the failure of yet another bank, this one we’ve been discussing, than good! Personal respocibility and independance or if nothing else caring cooperation might just be a great outcome to these strange and sad economic times!

 

http://online.wsj.com/article/SB10001424052748704207504575130171387740744.html?mod=rss_whats_news_us

 

Prepper