Untucked Episode 96
Meghan Tait: [00:00:00] Um, today we’re gonna talk about an article recently, um, featured in the Wall Street Journal, written by Julia Carpenter. The article is called Well Into Adulthood and Still Getting Money from their Parents. Um, I took this like summary right from the article. Parental support is continuing later in life because younger people now take longer to reach many adult milestones, and getting there is more expensive than it has.
Been for past generations, economists and researchers have said, so. Julia’s article explores parents helping their adult children financially, and that’s what we’ll spend some time on today.
Jeff Mastronardo: What do we consider adult children? What age? 1823. 23,
Mike Traynor: I think. Well, I was gonna say 21 or 22
Jeff Mastronardo: plus. Yeah.
Meghan Tait: Okay. Like I, I view, at least I view the way that this article framed it as adult working children.
Jeff Mastronardo: Yeah. Working or trying to find work. Or trying
Meghan Tait: to find work. Yes. So early twenties. Okay. [00:01:00] And the article focused on what they referred to as adult milestones, having their own children buying their own homes, um, supporting their own kind of month-to-month needs, or not being able to do so with the income that they were making.
Jeff Mastronardo: So what do we kind of see? We, we see all the above, right? Like we see parents that help their adult children on a monthly basis with a stipend, and I mean, adult children, like in their forties Mm-Hmm mm-Hmm. Like twenties through forties. mm-Hmm. We see clients helping adult children with milestones.
Mm-Hmm. I’m gonna give them 10, 20, 30, 50 grand to buy a house. Mm-Hmm mm-Hmm. And we see them also just non-milestone. Like, Hey, here’s 10 grand. Here’s five grand at Christmas. Yes. Here’s 15,000. Just ’cause I want to give it to you.
Meghan Tait: Yes. And I would argue the majority of those decisions are made because the parents are in a position to be able to do it.
[00:02:00] Not often coming from a place of need from the kids, kids asking for
Jeff Mastronardo: it. Yes. Hey, I need help. Yes. Will you please help
Meghan Tait: me? Which we know that exists, obviously. Um, it’s just not something maybe we. Experience as much
Mike Traynor: you have. You’re in that position. Yeah. Yourself. You have a adult. Yeah.
Jeff Mastronardo: Child. And I’m completely torn.
I have no idea what I’m doing. Uh, I don’t know if I’m an enabler. I don’t know if I’m supporting. I don’t know if, I’m certainly not like being the, like, bad cop, that’s for sure. Um, and I don’t know what you’re supposed to do. Right. Like my kid lives at home. She had a job that was miserable. Quit it kind of.
Yeah. Not the way you should have. Like she should have gotten another job then quit her job. But it was so bad. And like, I’ll use the term like abusive, like I was like, you just gotta get outta that place. Yeah. And then you could find a job waiting table somewhere that’s taken a little longer than we’d like it [00:03:00] to.
Um, so I just don’t know like, what’s the cutoff? Like, when are you like, you need to be out of the house, you need to be in your own apartment. ’cause you don’t wanna force your kid into a. Financially stressful situation, but you can’t let your kid just like sit at home and eat your Eggos for the next.
Like, yes, I eat Eggos every morning. You can’t let your kid just eat your food and be comfortable. And we’ve Melissa and I have done a horrible job. What I mean is a very good job of making our home very comfortable. So like nobody wants
Mike Traynor: to leave. Yeah, I mean, I think like most things I would say it’s situational.
And, and there’s not a black-and-white answer, in my opinion. It just never would be you. And then you get down to when you have multiple adult children, one maybe needs no help and one maybe needs a lot of help. So you handle that differently. You just have to, right. Um,
Jeff Mastronardo: if your [00:04:00] kids, if your kid’s working, this is, this is the way I, how I, if your kid’s working and they’re a productive member of society, you have way more leeway.
With me, like, yeah, let’s stay here until you have enough, and your budget and expense ratio is enough where you can get out on your own and, and not have to like really struggle too much. Now I’ll just pull, pull a number like that. I’ll pull a number outta the, outta the air. Like that can’t be till you’re 30 and like 28 is probably when I start like.
Scratching my head like, all right, when the heck are you gonna get outta here?
Meghan Tait: What if she wants to buy a house in New York? Like, what if that’s her goal? I mean, twenty-eight, she’s not gonna be able to do
Jeff Mastronardo: that. Then you have to save up here until you’re twenty-eight. Go get yourself an apartment in New York or in Hoboken, or right, wherever.
And then it’s [00:05:00] just gonna take you a little longer to save up because now you have to like. You have the expense of an
Meghan Tait: apartment for a, they rent too. Yeah. Yeah, yeah. I think the element, like I, I, I agree with you, Mike, that like, it’s very situational. I feel like it’s just so important to have the conversation and to be on the record about.
Expectations from both sides to whether or not you’re job-seeking or you are responsibly spending and saving your money. Um, you know, and, and timelines. I, I, I feel like creating them can be a little bit of a slippery slope, right? It can maybe add undue pressure, can create anxiety around an age, approaching an age that maybe isn’t.
It isn’t totally necessary. A again, I, that’s situation by situation.
Jeff Mastronardo: Uh, communication is like step one. Yeah. And we screwed that up. Like we never had the sit down. It’s so crazy that we’re having this pod now because [00:06:00] Melissa and I talked about this morning and we reached out to Kayla today and said, Hey.
Why don’t we, ’cause she’s in between jobs. She’s looking for a job. We’re like, we need to sit down this, this weekend. If, if we all can to discuss like, what’s your plan? Like how long do you want to be here in living at home? What does your budget look like? What are your goals? What are you saving up for?
What do you want your career to look like? Does that mean you have to go back to school? Do you want a career? I don’t know if you want a career and like just have that discussion. We haven’t had it. Mm-Hmm. And, and we never had it. So that was a mistake. We probably should have had that a year and a half ago.
Um, but she’s twenty-four, we’re, we’re gonna have it now. Everybody’s on the same page to have, and I think we’re all gonna feel a whole lot better after we have it. She’s gonna feel better ’cause she finally has direction. We feel better because we understand her expectations and she knows our expectations.[00:07:00]
And I think as long as you’re helping your kids make good financial decisions, that’s good.
Mike Traynor: Like I think I can, I can definitely see the helping with the down payment as becoming, as being way more of a, um, an obvious and important thing to do, given that all the other things are there. You know,
Jeff Mastronardo: the stars would have to align for me for that one.
Yeah. Yeah. Like if a kid has a house that they wanna buy and the down payment’s 50 grand and they have $5,000 saved up, I’m not helping you.
Mike Traynor: But I think part of the thing there is that the article mentions it that the price of real estate now, relatively speaking, mm-hmm. Is outrageous. So. The down payment that would’ve been required 30 years ago is it’s, it’s not even attainable,
Jeff Mastronardo: but if you haven’t shown the discipline and the financial ability to accumulate at least half of the down payment, why would I help you buy a house?
You’re probably just [00:08:00] gonna make more financial mistakes and you’re probably gonna lose the house or need more financial support from me, which I’m not gonna do. I,
Meghan Tait: I, I think that’s where conversations are important and expectations are, are required. I mean. I, I, obviously, I don’t have kids, but like when we think about that adulthood timeframe, it’s like, it’s weddings, it’s houses, it’s, you know, again, kids of their own.
And I think there are a lot of ways in which help can be used, of course. Um, but maybe. With you and your kids like identifying, you said it, the goals or the priorities of your kid and they’re gonna be different for everybody. And then I think it’s like how financially solvent are mom and dad like. Can they afford to do these things Again, we deal in a space and place where most of the time the affordability for mom and dad is not a huge concern, but that’s not [00:09:00] the norm.
I mean, the life being more expensive isn’t just impacting young adults. Yeah. Life’s more expensive for everybody. Now. Mom and dad might not be trying to buy a home or trying to have a wedding or have their own kids, so I understand that, but like. Parents deciding to help with no guardrails for themselves is like the absolute worst thing they could do for themselves and their kids.
Right?
Jeff Mastronardo: Yeah. Yeah. I mean, I have a few clients where I’ve said like, you know, it’s, it’s a, it’s a single client, you know, husband or wife, predeceased. They have one child and they have more money than they need. Like, you can help your kid as much as you want. Yeah. Like you’re. You are not like filthy rich, but you’re, you’re never gonna spend all this money.
You, they’re gonna get it anyway if you want to help them. Sure. No guardrails. You’re, you’re totally fine. But I think in, in 90% of the cases, yeah, there have to be guardrails. ’cause the parents have [00:10:00] enough for themselves, but not enough for everybody else. Right. It’s interest, it’s, it’s, it’s wild how unique every situation is.
And there is no. Yeah. Okay. Here’s the rule of thumb. This is how you do it. You know, you, once your kids hit twenty-eight, you kick ’em out like it’s expensive and they don’t make a lot of money. Mm-Hmm. Uh, I, I, you know, kudos to the kid that graduates college and is immediately in an. In an apartment on their own supporting themselves.
But that’s, I don’t think that’s the norm anymore.
Mike Traynor: Yeah, I mean, I have a friend who, whose son just graduated a year ago, took a job in outta state and the job he learned, the job, he rented an apartment, spent everything he was making on that and just living. And then, you know, this particular job, I guess, has afforded him the ability to work remotely.
So he just announced he’s coming home and living at home to save the rent. While he continues to work and the parents [00:11:00] are not happy Yeah. About it at all. So, um, but I get it, like he’s not saving any money by spending, you know, $1,800 a month on a rent, wherever, wherever it is. I’m making up a number. But like he’s, he’s spending every, he’s not saving anything where he is.
And that’s a scenario where, I don’t know, I would, I would say, yeah, like a year. Two, whatever. I don’t know, maybe, but just, just bank what you can and
Jeff Mastronardo: then figure it out. There’s other options, man. You don’t have to, you don’t have to get an apartment by yourself, right? Yeah. You get an apartment with two other people, you make it affordable, but you can’t, like, I just don’t, like if your kid’s sitting on your couch, you eating Cheetos, like you need to crack them into shape to like get a job or get out.
And I, and like, I’m sorry, like that’s, if that creates financial stress for you, I’m sorry, but you just can’t like. What’s the word that people, you can’t free load. Yeah. You can’t be like a freeloader if they’re busting their butt and they’re working and it’s just expensive and [00:12:00] Yeah. That’s kind of where I’ve, this Yeah.
You help them accumulate and then figure out, okay, you wanna move out? Well, yeah. A, a 2000 apartment isn’t in your range, but I don’t want you living in a $200 a month apartment, so let’s figure out, find two of your buddies and find a, find a place, because I think that’s gonna help them grow, right.
Keeping them at home where they’re comfortable. It isn’t getting them out with roommates, that experience living with other people having to like wash the dishes. Mm-Hmm. Because your roommates are gonna give you shit if you don’t like, that’s. All growth for them.
Meghan Tait: And it, it, it affords them growth financially too.
’cause it forces a level of responsibility you hope. And obviously it could go the other way where poor habits are created, but like you hope that maybe with enough of a cushion a couple of years saved and then like a, a budget or a framework in which they can afford to [00:13:00] live that it does create maybe more sound.
Financial decision making moving forward.
Jeff Mastronardo: I mean, we’ve all done it, right? All three of us have moved out. Yeah, it sucked. It was financially stressful, at least for me. I
Meghan Tait: lived with two people I met on Craigslist. What’s Craigslist?
Jeff Mastronardo: I’m kidding. It’s tough. I’m not saying it’s not tough, but there’s ways that you can alleviate the stress.
Level a little bit and make it possible for you to move
Meghan Tait: out. Like at the end of the day, if people have parents who are willing and able to help if it’s done so responsibly and well intended.
Jeff Mastronardo: Yeah, I think and, and uh, maybe I’ll wrap with this. I think the one thing that we have to do a good job, a better job of doing, and I’ll throw my wife under the bus,
Meghan Tait: we being
Jeff Mastronardo: parents.
Parents, yeah. We have to stop looking about what we did. Like [00:14:00] Melissa always says, and this is not specifically related to like older kids, like to our younger generation, I agree with you, but she’s always like, man, like when my mom was at work and I was at home, like I started dinner and I clean that.
Like, okay, well you’re, you’re a better person, right? And you’re maybe a harder worker, but like, we can’t take what we did and and expect our children to do the same damn thing, especially when we have made their lives super comfortable.
Mike Traynor: Yeah, I think that’s a great point.
Jeff Mastronardo: Okay. All right.
