The following post is by staff writer Melissa Batai
Your early 20s, when you typically have the least amount of money, are often when you face some large life expenses.
A college education is often necessary to succeed, but college costs thousands, if not tens of thousands, of dollars a year. The typical college graduate under age 30 has a student loan balance of $20,835 according to The Huffington Post.
Many also marry in their 20s. Of course, weddings aren’t cheap. On average, they run upwards of $25,000 or more. Sure, there are ways to save, but even people who try to have a frugal wedding still spend $5,000 to $15,000.
Don’t forget that this is also a prime time for young adults to buy a home and start a family. Depending on the area of the country where they live, a home could run anywhere from $150,000 to $500,000 or more. In an area like California, you’ll likely need to have $100,000 just for your 20% down payment.
Whew, that is a lot to pay for in one decade, especially in a rough job market.
Sure, many parents like to help out when they can. However, some parents decide to hold out money to their kids like a carrot being waved before a rabbit.
Should You Bribe Your Kids With Money?
My friend, Carrie, is the oldest in a family of 3. Her father had a good career and was good with his money. He invested well and wanted to share his wealth with his kids–but not without a catch. From the time his kids were in their early teens, he let them know that if they behaved the way he wanted, they wouldn’t have financial troubles.
For instance, if Carrie (or the other two kids in the family) waited to get married until she graduated from college and had a good job, she could expect her father to give her $10,000 for her wedding. If she didn’t live with the man before marriage, she could get another $10,000. If instead of having a lavish wedding, she only spent $10,000, he would give her $50,000 for a house down payment.
Yes, her father was suggesting the proper moral behavior he’d like to see her exhibit, and he was basically teaching her smart financial behavior. But at what cost?
Ironically, her brother’s girlfriend got pregnant in high school. They had a quick wedding before the baby was born, and as you might expect, they didn’t get any money from dad.
My Questions for You
Would you use money to bribe your kids to behave a certain way? Do you think it’s fair for parents to tie their financial gifts to their children around certain behaviors and expectations?
Have you ever been in this situation? Were you promised money if you behaved a certain way? Did you do what you were expected to do?