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Sunday, July 12, 2009

Fiscal Incompatibility: Parental Worries?

For those of you parents in the audience, here's a worry to add to the list. And for those of you still searching for your perfect mate, here's something to think about. Namely: fiscal incompatibility.

After a year of worrying about the economy, I have noticed that I am still alive. And, though my retirement accounts are in the dust, that doesn't really affect my daily life. Luckily, Mr. FS and I are still employed. We don't have a scary mortgage. So a new worry has cropped up.

I have written about our family's choice of low- (actually no-) cost college for our children. I've also written about our decision to give our children the money in their college accounts when they are in their 20s (assuming they are not drug-addicted wastrels).

A sudden thought! I exclaimed to Mr. FS: What if our children's beloveds turn out to be vastly indebted? What if they decide to fall in love with the kids who said, "But Daddy, I HAVE to go to NYU. I will DIE if I don't. I don't CARE if I have to take out loans. It's worth it."

To which Daddy replied, "I just want you to be HAPPY. And, besides, college debt is GOOD DEBT. So while you're taking out your loan, I'll take one out too. It's WORTH it if it will make you HAPPY."

Just something to think about, folks. Hope I'm not being too mean-spirited here. What do you think about fiscal compatibility in relationships?


FB @ said...

I don't know how comfortable I'd feel going into debt for a child's education, especially if I am nearing retirement and not really financially secure to help out without endangering my security.

Taking a loan out at that age (assuming I'd be 50 or so) is too risky.

For me, retirement comes first.

Before the kid's educations, so that they understand that they will never have to worry about us when they are in debt (like I once was, for education, and my parents asked me for a $5000 stipend per year to pay for their retirement while I had $60k to clear).

Harsh but true. They have to learn how to make their own way in the world and assess how many years they'd be in debt for an education they chose to take.

Also, it depends on what they're taking at NYU. If it's something that will make a good salary.. then I'd encourage it. If it's for the arts or something similar, I am not sure I'd be as enthusiastic considering the amount of debt vs. earning potential when they leave

Luckily, BF and I are on the same page in regards to finances.

If we had the money at the end of their education to give each kid the same amount ($10,000) or whatever, then we'd gift it to them to help them clear their loans.

If not.. then we wouldn't.

They made that choice with our guidance and repeated encouragement/doubts, and they have to stick to it as adults.

I don't want to be stuck babysitting my kids for life, having them dependent on me for money or to help them out of their problems just because I wanted to give them more than what I could.

FB @ said...

Oh.. and that drug-addicted wastrel thing made me laugh, because we know a family with 5 kids, who ALL turned out to be potheads, cokeheads and worse.

They just had too much money growing up and now they're all psuedo-bums, living off Mommy and Daddy.

LOL! :) Same goes for us. No drug addicted wastrels here. We'd cut them off.

Duchesse said...

Frugal: "What if our children's beloveds turn out to be vastly indebted?"

Your decision then is whether to assist your child in retiring the debt, or not. This depends on whether you want to support the union, and to what extent. Bluntly, whether you will put strings on your bequest, or not.

This is about control, and only you can decide how much control you will exert. And I say, benevolently and with a vast amount of experience with bequests, that control will be easily read by the your child and their partner(s). They may be young, but they are not unaware.

You seem to me to be a woman of great heart, with wonderful children, so I am not worrying about meanness of spirit at all.

Funny about Money said...

Vastly indebted. Could be. But...does it (should it) matter to the parent in question? Once the young people are adults, about the best you can hope for is that they'll have imbibed some common sense and decency from their parents, and will try to live their lives accordingly.

Their choices of lovers and spouses, alas, are beyond our pale.

My mother once told me that money is the cause of almost all marital discord. In my experience, she was right. Inability or unwillingness it work together on money matters seriously impairs a marriage. One hopes one's children don't find that out the hard way.

Frugal Scholar said...

@FB--I guess I'm just concerned about my beautifully debt-free children marrying into huge debt. I know of several cases--followed by divorce--not nice to witness.

@Duchesse-I will try to be as big-hearted as you think I am. I'm much nicer in blog than in person--trust me on this. Thanks!

@Funny--You are so right. It is not my problem. In fact, it is not even a problem yet. And even if it is a problem, it won't be mine. I'm just hoping my kids will find frugal beloveds. Such bliss!

Suzy said...

Financial compatibility is very very important to me but I'm in my early 40's...not sure how important it is to the younger hormone-driven generation though! :-)

For some who aren't able to do no-cost their choices may be to go into debt via student loans or not get a college education. I don't think debt that will help guarantee a better future is necessarily bad though. Also depends what each gives/takes to the relationship..something else may make up for having some debt, etc.

Frugal Scholar said...

@Suzy--You are right. I'm just hoping my kids will meet people a LITTLE in debt rather than a LOT.

Shelley said...

I think financial compatibility is very important. I have pretty much always been a saver and then later a downright tightwad. Married two spend thrifts and saw most of my work fly out the window on cars, hunting, vacations. I kept quiet to keep the peace, but I was not happy! Now in 14-year relationship (not married yet) with someone much more in tune with my views about money. He thinks I'm crackers occasionally, but is willing to try things and see. I cannot adequately describe how much more peaceful and pleasant our relationship is. I finally have a partner with whom I can share a vision about our future.

However, if your child is old enough to marry and have their own home, you have finished raising them and they must get to enjoy the consequences of their own decisions, I think (easy for me to say, I have no children). I have seen parents interfere with the finances of their adult children and it can hurt the marriage a lot.

I would say look out for your retirement. I earned my BA and my MPH in night school. They took me 6 and 3 years, respectively. I realise I missed out on the college life experience and all, but then I had no debt with my degrees and here I am, retired for two years at 53.