Is it OK to bank at the bank of Mom and Dad?

Via Fatwallet comes this this article on parents who continue to financially support their adult children.

The article has a number of examples of parents supporting their adult children, including a 23 year old who gets $300 a month plus a cell phone from his parents.

My parents where very generous with me through college, paying a large chunk of my college bills as well as food, shelter, and car stuff. They did help me out a little after college as well - I briefly moved in with them a few months after I graduated, but moved out about 6 months later and have been on my own ever since.

That isn't to say that I don't get some support from them - the usual Christmas and birthday presents, the occasional dinner out or bag of groceries when I visit them at holidays, or the use of their washer and dryer when I visit with pretty much every piece of clothing I own (my landlord charges me $2.50 a load to do laundry).

But I'm not depending on them any more, although I also probably wouldn't be as financially secure as I am without their help in my college years.

What makes things interesting is that I have an older brother who is 4 years older than me who still lives with my parents. They were less than happy when I moved out after college, but I get the feeling that they think it is getting near time for my brother to move out. It's not that he doesn't work hard - he teaches high school and is a part-time radio DJ - but I guess he doesn't have much motivation to move when he's got free rent and home-cooked food. And when I'm paying my bills, I always do have to think about how much I would save on rent and food if I still lived with the parents. Of course, I would also probably go nuts.

I think there are a couple reasons for the parental-support issue. A major part is probably the fact that people are marrying later, if it all, so there is more in-between time. My parents both lived at home until they were married (although my mom's parents charged her rent), but they were married when they were my age. Considering my seemingly permenant state of single-ness, marriage is nowhere in the near future for me. That means more time supporting oneself without the economies of scale of living in a two-person household. I've been trying to buy a house, and it definitly is not easy to do on one income.

And that's probably the second part of it - high housing prices of late have made it harder for kids, especially single kids, to buy houses. That's the reason my brother is still at home - NJ housing prices make Baltimore's look like a bargain. And because people are single longer, and don't have two incomes to buy a house, it's even harder, and a boost from mom and dad can make it possible to own a house when it otherwise wouldn't be.

So that's the why. The question is, should parents help out their kids financially? I say... maybe. It is their money, and parents certainly have a right to direct it as they see fit - and it makes sense to give money to your kids when they are young and need the money instead of leaving it as an inheritance when kids are older and don't need it as much.

On the other hand, parents who are too generous to their kids will probably find that their kids will come to depend on the money, and won't have a whole lot of incentive to move out or get a better job or work harder or put in longer hours. I think there is a bit of a disincentive for kids who depend on money from their parents - why work if you can get it from mom and dad? At some point, Junior is going to have to discover the real world on his or her own.

(as a side note, I work at a private college where there is a not-insignificant number of kids whose parents buy them stupidly expensive cars - it's not unusual to see mercedes, BMW's, Lexus's, and the occasional Escalade or Navigator in student parking lots. This always seemed like a bad idea to me - where do you go from there? Give a kid a crappy car - like the '87 LeBaron that I drove for 4 years - and when they finally can afford their first car it will be a huge step up and they will appreciate it more).

My thought is that it's probably better to front-load your help if you are a parent - spend the money to make sure that your kids graduate from college with the tools they need to get a job and be self-sufficient. I think it also makes more sense to make specific gifts (ie to buy a car or put a down payment on a house) than to give stipends that a kid depends on for living expenses.

I think I also feel a certain amount of pride in being pretty much self-sufficient. I can't help but think things would be easier if someone gave me a pile of cash though.

I do have to wonder if you need to have a PHD to make as obvious statement as this:

Dr. Arnett, the psychologist, said young people are ambivalent about receiving money because it represents parental power. Most young people, he said, are striving for independence, to feel they have reached adulthood.

"But they are also generally quite ambivalent about adulthood, in general," Dr. Arnett added. "You feel grown up. You have more status, more position. But it is annoying, too. You have to pay your own bills, and take on all these responsibilities."

Yup, independance is fun, but paying bills sucks. Which is probably why so many people liked college - you get most of the freedoms and few of the responsibilities...