Is it finally time for your little ones to bravely step into the new stage of their lives and buy a house or a flat where they’re going to live. Of course, buying property is a huge investment and many young people can’t really afford it. Naturally, being a parent, you’d probably love to help your children get onto the property ladder. However, that is not always the smartest decision and it requires a lot of contemplation. If you do decide to help, you’ll need to see how much you’ll be helping, as well as in what way. You and your spouse need to make the final decision and you need to stand your ground. Otherwise, you may end up posing a very bad example and causing damage that is probably irreparable.
The Mum and Dad Bank
Regardless of how you choose to help, you’ll probably reach a point when you welcome your kids into The Mum and Dad Bank. First of all, this is the only bank that actually has its clients’ interests and happiness at heart and there’s usually no interest whatsoever coming with a bank loan. In that respect, if you’re able to be your kids’ bank, go for it. It will be of great help for your children – as opposed to real banks. However, make sure you also have an agreement with your children. Explain that they need to be equally responsible to this bank as they are with any other. In order to make sure they will stick to their part of the bargain, think of some penalty measures in case they break deadlines or any other parts of the agreement. It doesn’t matter whether you’re their parents or not, your kids need to know responsibility.
Can I really afford it?
Another issue is the reality. Before making any decisions or telling your kids about it, you need to look long and hard into your own budget and financial plan. Do you have any savings? If so, what are they intended for? Do you have a retirement plan? If not, you need to create one ASAP. These things cost money, but they’re extremely helpful and almost necessary. Both your partner and you need to find appropriate aged care and set aside the means to pay for it. Perhaps you already have everything figured out and you have several savings accounts for various purposes. If you and your spouse are covered even without the return of money, then surely you can help out.
Give or lend?
Finally, you need to decide whether or not you actually want this money back and how important it is. You have several options. If you feel that your children are well taught to be honest and responsible, as well as that they have a strong sense of justice and, on top of that, you can absolutely afford to give the money entirely, go for it. Tell your kids it’s a gift and they don’t need to repay you. However, if your kids aren’t as responsible as you’d like them to be, you should ask for the money back regardless of your own finances, but for educational purposes.
Unfortunately, money causes issues and it can seriously disturb people’s relationships, especially between you and your close ones. This is why it’s very important to keep the situation as clear as possible. Additionally, if you have some form of a written or spoken agreement, it’s really important to honor it until the end and never bend the rules or complete chaos may arise.