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Friday, February 26, 2010

Should I Be the Safety Net?

Over at Get Rich Slowly, a new staff writer summarizes the plight of yet another blogger, who writes on the dire situation of herself and her 4 kids--move, foreclosure,job loss,and so on. They now live in a situation reminiscent of the one recounted in the Boxcar Children.

All these stories terrify me, not so much for me, but for my children, both still in college. What world are we sending them out to? I am watching the news on Healthcare Reform, not just in a theoretical, but in a personal way. Frugal Son is going to graduate from college in a year or so. And hence will be off my insurance.

Sad day. I have told him, tongue not completely in cheek, to find someone to marry during his year in France. I realize that it might even be prudent to go to graduate school--not to get a desired degree, but to hang on to insurance for a few more years.

I'm hoping things will work out for him and my daughter, who has a few more years safe in college.

So many young people who can't find jobs, who can't find jobs with benefits, who haven't had time to amass the Emergency Fund.

So it occurred to me that I should keep to my frugal ways. To have a double--or even triple--emergency fund. Not for me, but--just on case--for my children. There is not much of a safety net that I can see. So I am wondering: should I think in terms of being my children's safety net?

Am I crazy?


Duchesse said...

Not crazy. And the world being fraught happens regularly. During various depressions (not just the 1930s), wartime and recessions, families have helped their less-stable members- typically young adults and elders. Young couples often lived with their parents; families chipped in for necessary operations. Kids took part time jobs to help support a family.

I advocate using college to prepare for employment that yields a job with benefits. I sound like a philistine! But getting a degree in anthropology (as one of my sons wanted to do) is unwise unless you are positive you are headed for an academic career and willing to get an advanced degree.

Unemployment for youth FSon's age is very high in France (well above 20% I think), so he might want to bring that girl here :)

Norma said...

I think you are wise. It is sad that it has come to this, but it is better to be safe than sorry. If it turns out that your children do well and prosper and never need such a boost, then you've done a good chunk of the work of a retirement fund. It's not as though you can't repurpose the money if need be!

I keep hoping if we can all hang on a year or two more, maybe things will turn around. It is so scary.

Rose said...

I don't think that you are being at all unreasonable. Since your children have demonstrated an ability to handle money responsibly, there's no fear of you 'enabling' adult children with free handouts. Traditionally, communities would come together to raise houses and barns for young couples, and in America dowries were seen more as a gift for the happy pair than as a bribe to get rid of the daughter....I guess those relate more to marriage than mere young adulthood, but it's still nice when parents can graciously help out their deserving young.

To respond to one of your remarks, though, I would venture to say that any young person should be able to amass some kind of an emergency fund. I had a tidy little sum in the bank by the time I turned 18, scrounged entirely from a lifetime of baby-sitting (and hoarded birthday and Christmas money); I had never held a 'real' job.

I lived at home after I graduated from college, working full-time and not having to pay most basic living expenses. That rent-free housing was a gift from my parents, and I appreciated it at the time - more so after I got married and began dealing with the realities of how much it costs to live! Obviously, not everyone can have that situation (and, alas, there seems to be such a negative connotation to adult children living at home nowadays, as if they must be layabouts all), but you seem to enjoy an excellent relationship with your children.

Shelley said...

Not in the least! Sounds terrible over there! I'm sure it's not much better here, but we have the NHS and jobseekers' allowance is practically for life (which is not good, but no one starves...). I know there are children who would take advantage and I would normally be thinking that birds need to leave the nest, etc., but these are rough times. I think you already have decided, really. I don't see you being comfortable standing aside and doing nothing when you could help. I would do the same in your place, I think.

ann said...

as a kid recently in that position - no, definitely not crazy. i wasn't ready when i graduated to be totally financially independent. got my first waiting tables job three weeks after graduation, did that for half a year, then started grant writing part time, then full time. meanwhile my parents found a deal on [CRAPPY] BCBS insurance and my mom paid it on my behalf for a year. she also paid my car insurance and cell phone bill. i paid everything else (as i had through college). went to spain for a year (paid for entirely by me, plus i was working over there), applied to grad school, did not get in, came home, resumed my old grant job fulltime and immediately took over all expenses from my mom. she says she considers me 'off her payroll' - but still, i had a medical emergency last year and she helped with most of those bills.

i have a ballet teacher who has a daughter about my age, and the teacher approached me one day after class to ask me a personal question - on exactly this topic. she felt like she still needed to support her daughter after graduation but the dad was ready to cut her loose immediately - she wanted to know what i thought - i told her i definitely still needed a little help from my parents but that the goal was always to work towards independence.

i think a) if parents are in a position where they can offer some [transitional] support and b) they trust their kid not to take advantage of that position, then it is only a good, positive thing to offer that support.

i suppose i COULD have not had a car (because on my income i could not have afforded insurance) and scrimped even more than i already was scrimping to pay the cell phone bill - i could NOT have afforded health insurance and would not have paid for it myself - and all in all, i would have been even more stressed about money than i already was. plus my job prospects would have been quite limited without a car in BR. in fact, i could not have kept the (ultimately lucrative) grant writing job because it moved to NOLA after katrina stuff settled and i ended up having to commute from BR to NOLA every week.

so. in my opinion, the added stress and increase in difficulty getting on my feet after graduation outweighs whatever 'benefit' or 'lesson' i would have received from being cut loose right away.

Revanche said...

Well ... can't say that I'm not right there with you. I want (if/when I live on my own instead of with the padres) twice the emergency fund that I have now which is an insane amount of cash. But it's just not unreasonable to expect that you may have to serve as an emergency net at some point in the future.

If there was a likelihood that either child might become such a one as my brother, I would advise you to do it quietly without ever telling them about it, but I don't think that you have to worry about that with your kids.

Frugal Scholar said...

@Duchesse--Well, of course both my children have decided to be English majors. But I'm happy to see that you--as well as the other commenters--understand my point. I think modern--perhaps mostly American--ideas about independence at 18 or 22 may not be the best.

Perhaps FS and his French bride can come to the US for employment and return to France for medical care.

Mary said...

Mine's graduating in May with a degree in theatre arts. Then he's heading to L.A. to be an actor/director. Yes, pretty sure I'll be his safety net for awhile! Looking at it the other way, my parents were mine when I bought my first house 5 years ago. You give and you get!

Duchesse said...

I don't consider an English major an unwise choice. But the day when any college degree was a guaranteed entree to a white collar job is long gone.

At nearly 23, one son is supporting himself in an interim job before grad school. When he returns to school we will pay at least part of the expense, as we still have savings in our registered plan. Other son is living at home but moving out soon, and paying very modest rent and all his personal expenses. Neither has an emergency fund other than their registered retirement plans, from which they could draw. But, with universal health care,

Duchesse said...

oops- lost last sentence:

it is not as critical.

Frugal Scholar said...

@Norma--That's exactly what I'm thinking. So this all may be part of my retirement money. Perhaps we'll take a big family trip--in 2025!

@Rose--Your situation sounds wonderful. I too question the negatives attached to multi-generational living--even for a short time. My kids do have all their birthday money--I just never thought of it as an EF. I'll have to tell them! (It's not very much though)

Frugal Scholar said...

@Shelley--Thanks for understanding! It's really the health insurance that gets me in a panic. You've lived on both sides--in US and England--so you have a better view than I do.

@ann--Thanks for another great response. Much appreciated. You are proof that getting a bit of help doesn't turn the kid into a life-long many think.

Frugal Scholar said...

@Revanche--From what I've read, you have the same feeling towards your family as I do--only you are the younger generation. My kids would try to do the same for me, I think. I hope.

@Mary--My son is a dreamer too...keep us posted on your son's adventures.

@Duchesse--My son--as above--is a dreamer right now. It really is only the health insurance aspect that fills me with dread. Even terror.

Marie said...

Frugal Scholar -

I think it's great if you have the resources to have a safety net for your children especially for medical costs or pay for their insurance after they get out of college. However, I am a firm believer in letting them fly and find their own way. My parents didn't have the resources, beyond an old Volvo, to help me when I got out of undergrad and I did just fine. There is affordable, if not free, insurance for low-income people (aka many college graduates in their first real job) in many parts of the country. Perhaps have them come home for the summer after they graduate and have them save money from summer jobs for their own emergency fund.

Duchesse -
Let your son know that there are more opportunities than just academic life for an anthropology major. You do need an advanced degree to get a well paying job but there are many well paying ($60k +) jobs out there for anthropologists even in this economy. Most jobs out there actually are for applied or non-academic anthropologists. Frankly in this day and age I think as long as you have a college degree (English, anthropology or whatever) that's all that matters for those first jobs out of college that have benefits, ect. It gets your foot in door and then you can build towards your career from there. I've seen this happen time again with friends and collegues.

Frugal Scholar said...

@Marie--Thanks for your thoughtful and upbeat comments. Keep an eye out--I have scheduled a few more meditations on the topic of independence and would love to hear your thoughts.

Funny about Money said...

Oh, Frugal: you are SO not crazy.

It's terrifying out there for young people. M'hijito hates his job, hates it hates it hates it, but feels trapped because there's noplace else to jump. At least he has a job, one that earns a nearly middle-class living, which many of his contemporaries don't.

In our Brave New World, there's only one way we can help our young adult children to stay in the middle class, and that's to continue to help assist them in every way we can afford. Obviously, we can't impoverish ourselves--that would only burden them further, with the future care of their parents. But in the current economic circumstances, it's a rare young person who will ever escape the ranks of the working poor without support from a family.

I don't know that I would urge that about a young person who was irresponsible with money or with other aspects of her or his life. But when we're speaking of young people lie FSon or M'hijito, who have proven their responsibility and wisdom, so that we know our investments in their young adulthood will not be utterly wasted, it seems to me that providing a safety net (within reason) is the reasonable thing to do.

Frugal Scholar said...

@Funny--Thanks for your wisdom!And overall empathy for the plight of so many. Your son seems like one of the lucky ones.