Families Working Together to Pay for Colleges, Houses, etc.

[JumpyTheFrog]

I occasionally read stories of immigrant families that all work together to pay cash for houses. As I understand it, they'll pool their money to buy a house for the oldest adult child, then go right on down the line.

 

Sometimes I think our culture is too individualistic, especially within families. I am grateful my grandma and one of my uncles invested money for me as a child to help pay for my college. I would like to do the same for my grandkids and any nieces and nephews I have in the future.

 

For people from cultures like this, what do people do when one family member is struggling financially largely due to squandering previous opportunities? I am wondering about building a family culture that works together more to avoid needing loans, but I don't know how it would work if someone keeps making dumb decisions.

[Arcadia]

I have a few relatives that are spendthrift. The extended family obligation is that the person has somewhere to sleep for the night and some food.

 

For example one of my cousin wasted the $2k his sibling gave for part time college tuition/expenses. None of us are willing to gift college money after that.

 

My uncle was bankrupt due to pathetic financial management. He could sleep at any relatives' living room couch and he works where free meals are an employee benefit. None of us would bail him out of bankruptcy, he has to do it himself.

[SparklyUnicorn]

I literally don't have enough family members to even do this with. 

 

 

[mamiof5]

Sounds good on paper, but wouldn't work for us. Our choices and lifestyle is very different from other family members, we have VERY different priorities. It would be a nightmare.

[DawnM]

We don't do that with extended family, but we do help our own family.  We plan to pay our kids' college and probably a used car to get to and from college.   I would love to help them with a downpayment on a small house or condo at some point, but we will see.

 

They are always welcome to live with us.

[SparklyUnicorn]

They are always welcome to live with us.

 

I tell my kids this.  I don't expect them to, but sure if they want to I don't have a problem with it.

[JumpyTheFrog]

Well, the immigrant families I've known to do this had huge families. Vietnamese. The children were raised to never question anything the parents said or did.

....

I think the Amish live a good, happy, family oriented life, and how they contribute so much to their members.Seriously, even their dogs are the best behaved. Then I remember how they treat family members who choose differently.

I was wondering if there might be expectations on the part of these families that everyone had to obey the older generation. Blech.

[momacacia]

I know of a large family (9 kids) that does this. They don't help with college, afaik, but they help/provide either first year's rent after marriage or with down payment on a first house...whichever comes first, I guess. Seems to have worked fairly seamlessly so far, and don't seem to be any strings attached.

[StephanieZ]

I think that sort of thing works well as an ingrained family culture . . . but I don't know that it'd work well as an adopted "new" habit . . 

 

FWIW, I think the "easy" way to implement that sort of "helping" is to do it "downwards" . . . Dh & I's folks helped us financially . . . We will help our kids . . . Their help, in essence, freed us up to help our own kids . . . And, meanwhile, we are well enough financed that we should be able to have secure retirements and never be a financial burden on our kids . . . and maybe we'll leave large enough estate to make it that much easier for our kids to even better help their kids/grands . . . 

 

I had one friend growing up who had a "rich uncle" (I think a grand uncle) who'd left a substantial trust fund for top notch private education for all the kids in her generation  . . . Of course I have no idea the extent of the funds and how long they lasted, but I think that's a super cool idea, and if I end up close to the finish line with lots of excess money, I think that sort of targeted trust fund would be awesome aimed at grands/great grands/etc . . . How free-ing would it be if your descendants didn't have to struggle to budget for their kids' educations? Now, that'd be a cool financial boon.

 

 

[idnib]

I come from a culture such as this one. People make dumb decisions, but they still have a place to get food, shelter, company, laughter, etc. They're in your tribe.

 

Money might be harder to come by if they keep making bad decisions. I have a cousin who is married to an addict who squanders all their money, so they are fed and housed in their own place by threats of the family pitching in, but nobody gives them any extra unless they slip some to her to buy something for herself.

Edited July 26, 2016 by idnib

[MaeFlowers]

I've known families like this. It seems great but from watching it closely, I couldn't do it. In the families I've known, there were no boundaries. Everyone knows everyone else's business (and gets to share their opinion on it.) Everyone else's kids are your kids (which means they get an opinion on how you raise them and actively try to raise them themselves.) Things like that. It never seemed like what was given was given freely. It always had expectations attached.

 

From the families I have seen, it just doesn't work out well. I was close to these families. I'm still close to two. Some had money involved and some didn't but the outcomes were the same. They all had lots of infighting and negative emotions...mostly resentment. Also, I noticed that these families have high divorce rates. In one family, all the children had been divorced at least once, if not twice. In another one, there were 15 marriages, 13 of which ended in divorce, among 4 children. I can imagine to many, this level of involvement in your marriage can be too much.

 

I'm sure it works for some people. Even within these families, there were a few who were okay with it. Every once in a while I lament the fact that we don't have any family close by but then I remember the cost at which it comes and get over those feelings pretty quickly.

[Guest]

I havent seen that much pooling. Recent immigrants here buy a home together and live together until they can afford their own. More established families may have sibling groups that help build each other's homes. Havent seen anyone pay for education...usually they offer room and board plus used car for a neice or nephew that doesnt have family support and will attend college as a commuter....probably that is because the low income financial aid is substantial.

 

No one gives money to people who cant manage money or who arent willing to work. They may contribute labor or pass down goods when that will benefit the children or an abused sibling.

[kewb]

Our family culture is "you do for family".  That does not mean extended family pools their resources to send someone to college or buy them a home.  Athough, if necessary we would pull together to do so.  It emans you offer support when needed.  Whether that means a roof over your head or helping you repair your vehicle.

For example, I recenlty heard of a woman and her kids who were homeless due to divorce.  She was staying with her sister for two months and then the sister kicked her out because the house was too crowded with 3 adults and 6 children. I still can't wrap my head around it.  Unless there is some sort of addiction issue going on you don't kick your family out.  If there was addicition, maybe you kick out the addict and keep everyone else. Even if you hate your sister and she is a deadbeat how do you kick your nieces and nephews to the curb?

 

The flip side to everyone pulling together is that everyone is up and in your business.  It is a definite trade off.

Edited July 26, 2016 by kewb

[Guest]

The times I have seen family kicked out are all when the person was freeloading. The gc who lives with grandma for free, but wont take the garbage out, mow the lawn, or get a job, but always has money for booze etc. The dd whose husband takes but wont give. The skilled laborer who gets nothing in return, not even a plate of brownies for a full day's labor. We kicked a member out, as she had many hours of labor from us, but was partying and refused to reciprocate when we needed help...and not just once, over a decade. Unfortunately people will use the 'its family' to take and refuse to reciprocate.

Edited July 26, 2016 by Heigh Ho

[JustEm]

My parents are very generous with their money. We can always go to them if we need money, even though I have never actually asked for money. On many occasions my dad has just handed me money for a particular thing or told me he'd pay for half if it. For example, we went on a family trip with my entire family. When I went to pay my mom the $200 that was my families share my dad immediately pulled $200 out of his pocket and gave it to me saying he was paying for my family. We didn't need him to do it but I'm pregnant with my 5th and he's been there before(they had 9.) Even if money isn't tight having that $200 is always helpful. His mil and fil would do things like that for them so my parents do it because they remember how helpful it was. Another example is he paid half of the cost to replace all our plumbing after the 12th leak sprung. Once again, we had the money but that time it actually hurt us to have to pay it all. We didn't ask him for help he just offered. They also allow my brother to live at home rent free for the last 8 years because he can only find temp work. He used the saved money to finish have bachelor's degree and now after years of no permanent job he finally landed one. He would still be welcomed to live rent free but the job is a few hundred miles away.

 

It would never work if my siblings and I were like that with each other regularly. We all make wildly different salaries and have different philosophies on money. But in a crisis we'd help either financially or with free childcare so the person can work if we could.

[Meriwether]

I think the Amish live a good, happy, family oriented life, and how they contribute so much to their members.Seriously, even their dogs are the best behaved. Then I remember how they treat family members who choose differently. And then I learned what they often do to their dogs that makes them such 'well-behaved' pets.

How do you imagine they treat people who leave? My paternal grandparents left the Amish church. They maintained relationships with their family. My grandpa's funeral was attended attended equally by his Amish and non-Amish (having left the Amish church) family. Probably half of my several thousand second and third cousins are no longer Amish. I asked Mom one time how the family felt about those who left the Amish church. She waved her hand and said something about it being a non issue.

[elegantlion]

I'm very much an American with most of my ancestors being here before America was a country, but we're attempting something like this soon. I'm moving in with my mom, but we're all moving to a home in my college town. It will be me, her, and ds. She will technically own the house with expenses being split. The idea is that upon her passing I will inherit the house (which probably won't be paid for yet). I think my mom has a similar mindset of taking care of family, yet aside from ex, we're the only family living in the area. She wants ds to always have a place to call home, I do too, but wouldn't be able to supply that on my own in the long-term. 

 

Before my divorce and my dad's death, we had considered getting a place that had two houses on some small acreage. Now that it's just the three of us, we are better suited to living together on a regular lot. Although I joke about moving in with my mother at my age, we all agreed that this would be a good thing as we enjoy each other's company, there isn't a sense of familial obligation if that makes sense. 

[shawthorne44]

It can also be a problem when some members of the family earn appreciably more than everyone else.   I knew several hispanic engineers who used to complain about this regularly.   Yes, they were making better money than their siblings.   But, they also had large school loan payments to make, and they started working several years later than those that didn't go to college.  Then, every time someone in the family decided that someone in the family 'needed' something they were tasked/pressured to contribute a large chunk of it.  Over and over again.  

 

I also knew an engaged couple that broke up after the man, who didn't have a car because he couldn't afford one, was pressured/tasked with contributing $XXXX toward a new car for his mother because of his siblings decided that their mom's car wasn't new enough.   She had a perfectly fine car, it just wasn't new enough.  

[Arcadia]

It can also be a problem when some members of the family earn appreciably more than everyone else. I knew several hispanic engineers who used to complain about this regularly. Yes, they were making better money than their siblings. But, they also had large school loan payments to make, and they started working several years later than those that didn't go to college. Then, every time someone in the family decided that someone in the family 'needed' something they were tasked/pressured to contribute a large chunk of it. Over and over again.

That is true for some Asian families too. Siblings contribute on a sliding scale to income. For example parents medical bills, funeral expenses and other big ticket items.

Hubby does not earn the most in his extended family but was teased to foot the entire bill for a reunion lunch of about 30 by his paternal cousins. One of his aunts told his cousins off. We could have afford the one time expense but that would set a precedent. We were expected to each pay their own for that lunch.

[StephanieZ]

I'm very much an American with most of my ancestors being here before America was a country, but we're attempting something like this soon. I'm moving in with my mom, but we're all moving to a home in my college town. It will be me, her, and ds. She will technically own the house with expenses being split. The idea is that upon her passing I will inherit the house (which probably won't be paid for yet). I think my mom has a similar mindset of taking care of family, yet aside from ex, we're the only family living in the area. She wants ds to always have a place to call home, I do too, but wouldn't be able to supply that on my own in the long-term. 

 

Before my divorce and my dad's death, we had considered getting a place that had two houses on some small acreage. Now that it's just the three of us, we are better suited to living together on a regular lot. Although I joke about moving in with my mother at my age, we all agreed that this would be a good thing as we enjoy each other's company, there isn't a sense of familial obligation if that makes sense. 

 

If you'll be contributing substantially to the house, I suggest co-tilting it with your mom (joint tile with rights of survivorship) just to protect your interests in the future. In fact, if your mom's assets are modest (and she might eventually need Medicaid), then actually, it'd be smarter to simply title it in your name. You could have a lawyer write up something to protect HER rights (lifetime tenancy, etc) as well -- that's a good technique to protect both of you and maximize her access to wealth/income limited assistance if needed someday. Otherwise, if she gets ill and poor someday, Medicaid will TAKE that house . . .Talk to an estate/real estate attorney!

[elegantlion]

If you'll be contributing substantially to the house, I suggest co-tilting it with your mom (joint tile with rights of survivorship) just to protect your interests in the future. In fact, if your mom's assets are modest (and she might eventually need Medicaid), then actually, it'd be smarter to simply title it in your name. You could have a lawyer write up something to protect HER rights (lifetime tenancy, etc) as well -- that's a good technique to protect both of you and maximize her access to wealth/income limited assistance if needed someday. Otherwise, if she gets ill and poor someday, Medicaid will TAKE that house . . .Talk to an estate/real estate attorney!

 

We did discuss putting my name on the title, but opted not to at this time for many reasons. My mom is way beyond "modest" in her assets, way more than I'll probably ever have due to a bad marriage and divorce. 

[StephanieZ]

We did discuss putting my name on the title, but opted not to at this time for many reasons. My mom is way beyond "modest" in her assets, way more than I'll probably ever have due to a bad marriage and divorce. 

 

Excellent. Just keep in communication with her and an estate attorney in coming years. Be aware that there is at least a 5 year "look back" on Medicaid claims . . . So, in general, you'd want her to have at least enough assets to 6 or more years of nursing home/etc care, as you'd need/want to transfer assets at least 5 years before running out of funds . . . Nursing home or similar level care can easily cost 100k/yr. So, anyway, just be careful and keep things in mind in the future.

 

I think we spent at least 400k in my Mom's last 18 months of life, FWIW . . . When you have relatively lots of assets, it's easy to spend a LOT on private nursing, home modifications, etc.  -- as the last thing you want to do is cut corners with someone you love's money when their time is short. So, for my personal estate plan, I'd want to have at least $1 million (per person) in cash not to feel the need to protect my children from sharing assets, etc. (As in, if they were living in a home with me, I'd want it titled in their name . . .) Just something to keep in mind as time goes on. Meet with your mom's financial planner/estate attorney every few years (or when circumstances change) to make sure you're all doing what is best for all.

[Amber in SJ]

DH's family on his dad's side is a little like this with less than stellar results.  Grandma & Grandpa had 6 kids (FIL is #3) and their property & businesses were put into a trust.  For each of the 6 kids Grandma & Grandpa bought their first house after they got married (sometimes subsequent houses for subsequent marriages).  Each adult child got a monthly or yearly share of the profits from the businesses.  Unfortunately the business acumen/ work ethic did not get passed down.  When Grandma & Grandpa passed the siblings sold everything & divvied it up.  They didn't make any similar provisions for their own children.  Some spent unwisely and discovered themselves without that cushion they had always had and are now struggling.  It didn't occur to help their own kids they way they had been helped and now many of them are winding how their children will help them out.  It just doesn't always work out.

 

Amber in SJ

[StephanieZ]

DH's family on his dad's side is a little like this with less than stellar results.  Grandma & Grandpa had 6 kids (FIL is #3) and their property & businesses were put into a trust.  For each of the 6 kids Grandma & Grandpa bought their first house after they got married (sometimes subsequent houses for subsequent marriages).  Each adult child got a monthly or yearly share of the profits from the businesses.  Unfortunately the business acumen/ work ethic did not get passed down.  When Grandma & Grandpa passed the siblings sold everything & divvied it up.  They didn't make any similar provisions for their own children.  Some spent unwisely and discovered themselves without that cushion they had always had and are now struggling.  It didn't occur to help their own kids they way they had been helped and now many of them are winding how their children will help them out.  It just doesn't always work out.

 

Amber in SJ

 

 

Yoikes. What a sad, sad outcome from the grandparents generosity!  I'm sad to say I've seen similar bad outcomes from families who have too much given to them. 

 

The way my family did it was that the older generation "smoothed the way" by paying for our 4 year undergrads and modest other un-expected/un-promised but occasional helps after that . . .

 

For instance, Mom gave my brother her 7 year old Volvo when he graduated college, and when I graduated, she gave me $2k (approx the value of that old Volvo she'd given my big brother) as the down payment on my "starter car" -- a compact basic car that I took a loan on . . . They gave us money here and there -- Dad gave us 10k worth of stock when he sold a big stake of stock -- etc . . . And they co-signed house loans as needed and gave low interest or even short-term-interest-free loans here and there for houses, vehicles, businesses . . . 

 

Anyway, the way my folks did it was in such a way that beyond that 4 year degree, no help was EXPECTED or demanded . . . Our work ethics weren't impaired because we had no big money to count on, ever. We had a safety net . . . I knew my mom would never let us go hungry or homeless . . . But, we wanted more than that for ourselves and we wanted independence, too. 

 

I hope I can figure out how to do what Mom did for us without handicapping my kids like I've seen in other families where the kids are just lazy asses . . . For now, I'm following Mom's footsteps in guaranteeing (within reason) that 4 year degree and "small helps" afterwards . . . but those "small helps" are dependent on them making good choices and working hard towards good goals. 

 

I don't know how Mom did it. She (and Dad) spoiled my brother in so many ways, but I slept on a futon mattress in college on the floor, with one and only one set of bedding . . . and the only other furniture in my apartments were *very* cheap hand-me-downs gotten when various acquaintances moved . . . I never thought I deserved more or that I was somehow not having my needs met. I was a college kid, and that just seemed right and normal to me. Now as my oldest is moving into her first non-dorm housing at college, I am SO TEMPTED to go out and buy her a nice sofa, etc . . . because I want her to have nice things. I could afford it . . . BUT, I keep trying to remind myself that my mom could have afforded that, too! But, she didn't do it! And I didn't expect it! And neither does my daughter! I moved to grad school (on my own dime) with a sofa that I had been re-upholstering and was only half done, so it was half green, and half white . . . I didn't think anything of it! I never got around to finishing it! I had old random furniture scrounged from random people and yard sales . ..  and it was ALL JUST FINE. When we bought new furniture for the first time -- it was a baby set for our first baby. We bought it ourselves, and we were proud of it. It was simple, our lives were simple, but we worked hard for it and appreciated it all. I think that if Mom had made things TOO easy for us, we would have been cheated out of that pride of ownership -- seeing what our own work and effort could achieve. Anyway, it's something I struggle with now, and I wish Mom were alive to talk to about how she decided when and how much to help . . . She did it just right, and I really don't know how she figured that out. (Her own family was poor, so it wasn't by example.)

[Denise in IN]

How do you imagine they treat people who leave? My paternal grandparents left the Amish church. They maintained relationships with their family. My grandpa's funeral was attended attended equally by his Amish and non-Amish (having left the Amish church) family. Probably half of my several thousand second and third cousins are no longer Amish. I asked Mom one time how the family felt about those who left the Amish church. She waved her hand and said something about it being a non issue.

 

It is definitely not a non-issue with all Amish.  In this area, people who leave the Amish church or often cut off/shunned.  After our neighbor down the road left the Amish church to help start a new, slightly less conservative church, the local Amish would not do business with him or talk to him.  Even his extended family.  They eventually moved to a different area, mainly due to that issue. This has been within the last 5-6 years, so very current. 

 

Some people are able to repair relationships with their Amish family members over time, and I've seen some families not cut off their family members when they leave the church.  I think the general practice is changing, but very slowly and unevenly.