How much inheritance or money should we really expect from our parents?

Financial inequality is nothing new to write home about, but now it seems that in today’s overheated market and economy, you can’t really get ahead without any money from an external source – parents, grandparents, and the like.

Basically, if you want to buy a home in Canada today, you need someone who can help you with a down payment of some sort – anywhere from $20K to $200K or more, just to get your foot on the rung of the property ladder. It is so ridiculous, that a run-down home here, can cost $1M or more. A 20% down payment is $200K.

To save even $10K a year, is a trial for some, and it would take them 20 years to get there.

“SELF-MADE” BRANDING

On a side note, I would like to point out that what may irk people the most is claiming to be self-made when you are not, if you have received help from your family. There is nothing, absolutely NOTHING wrong with getting money from your parents (this is the whole point of financial literacy and inheritance), but there is something a bit disingenuous about saying you made it all on your own when your parents have gifted you down payments, or assets to get there.

Even if you started out without student debt, that is also a major advantage, to not go into it – I left school with $60K in debt, and had I not had to pay that, I would have (maybe?) started socking way more money into investing at a younger age than what I ended up doing (I only really began in my mid-20s, which is still very early, but not super early). 

What kills a lot of people is saying you are self-made when you don’t acknowledge any privileges that you have had, from any of the above, to including anything like being able to live at home for free while you started at your job. I too, also moved home at one point (a few months) and was expected to pay rent to my father which my mother only discovered after she heard my brother and I talking about it, which is another topic altogether, as she is the one who 100% pays the bills in the house, so my father was taking $2000 from us to line his pockets for his gambling addiction.

But I am getting off topic.

is expecting money normal?

I don’t think so. I also don’t think expecting money in this large amount should be considered normal.

And yet, paradoxically… people complain about not having had any help from their parents at all, either by way of lack of financial literacy, or financially.

I regularly observe in stories, and articles about people resenting their parents for NOT having helped them financially.

I MEAN, IF THEY PROMISED IT…

On the one hand, I relate 100% and feel this to my core, as my own parents promised $10K towards my education a good 15 years before I was supposed to go, and when it did come time for me to pay my tuition, I ended up taking out loans to a total of $60K. A lot of that was my fault (I was not a frugal college student by any means), but I did feel resentful of my parents for many years afterwards.

I think the thing I resented about my parents the most, wasn’t that they could not help me with my schooling with money, but that they had SAID and PROMISED the money, but then pretended it never happened. It was that false hope that cut the deepest, thinking that I did not have to worry about taking on debt to pay bills, and when the time came to clear at least the first year’s tuition, I couldn’t even get a co-signed loan with my parents as their credit score was truly awful.

Actually, my father refused to even go with me because he did not want me ruining his credit, and as my mother was the only other one who was willing to do anything for me in this regard, she came along, but had the worst credit score possible as she had never had a credit card in her life, and ergo, had no score to speak of. (See? Lack of financial literacy particularly for women is a major issue, as my father somehow figured it out on his own about credit scores, but did not deign to try to help her.)

Come to think of it, I have even more trauma around this false promise of money, because it was my mother who told my father specifically to set aside $10K for each of us for our education, and he instead, decided to ‘retire early’ in his 40s and work part-time, all the while resentful of us as his non-income producing family (my mother was in school trying to better her degree to get any professional job she could in her field, when in the end, it turns out the town we lived in was actually racist, and once we moved to Toronto, she had 7 job offers in one week, but I digress.)

So in the end, it was my father who refused, selfishly to do anything to help me get a student loan, but also, refused to even consider us in his financial plan.

Can you really change someone? I have reached a point in life where I am being more stoic about it all. Honestly, you cannot blame a viper for being a viper. He is who is is, I just know who he is, and I act accordingly, refusing to give in to his selfish, greedy whims, or to give him money that goes right to gambling which I liken to setting your money on fire as it achieves the same result.

THE BLAME GAME

Now as a parent, on the other hand, I disagree that children should expect anything in terms of money, and not even financial literacy. “Why would she say that, after having gone through what she did”, you may ask? Well, for a number of reasons. Maybe they’re immigrants like we were, and could not figure out the system.

It isn’t easy to navigate, even those who grew up here don’t understand how to set up their TFSA, RRSP, to invest and so on. So blaming them for not taking the time to do so, is partly valid, but also not fair in some ways, as not all immigrants are educated. It is also not their language in many cases, so trying to learn all of that, while reading formal language that can be confusing, is not easy (having had experience with this in French, my brain is unable to process formal government language easily).

Maybe they are simply themselves, NOT AWARE of anything beyond what they had sort of cobbled together. It would have been a great boon had my parents been able to help me in terms of at least financial literacy (the only worthwhile tidbit I got from my father was to never owe anyone anything on a credit card, to which I still religiously follow to this day), but that did not happen.

My parents still have no clue that investing can be fairly stable and a long-term endeavour. Instead, they, like many others, see investing as a gambling proposition, where stocks in the market go up or down, and IF ONLY WE HAD PURCHASED APPLE BACK IN THE 80s!! When in fact, buying an index fund gives you more diversity and stability without the stress of having to follow one company.

IT ACTUALLY STARTS WITH US

Honestly, at some point, it is up to us to take responsibility. Maybe, like me, you “found” the gospel of financial literacy in your early 20s. Or maybe later. As I see it – you can’t really control what other people do, or learn, or take charge of, but you can at least control what YOU do.

Now that we know better, we do better.

THIS IS MY PROMISE AS A PARENT

As a result, because I know better, and have gone through some trauma surrounding promises, and money, I am doing better for our son.

I am promising him only what I can truly guarantee which is as follows:

1. He will never have to pay for me in my old age.

I have it covered. You do not need to handle Elder Care, and I will be the last of our Sandwich Generation where we have young kids and elders to care for. I already pay for aging aunts and uncles, and I am preserving my capital for when (if) the time comes and my parents need money as well.

2. He will get his TFSA

It is kind of like a Roth IRA of $6000 (or whatever the amount becomes in the future) given by me every year. Without fail, I will max it out for him until he tells me – “I am good, stop giving me money.”

3. No estate debts

He will not have a debt to pay at my final tax return, my estate will cover it all, and he will only net whatever is leftover without having to pay out of his own pocket for anything.

4. He will be financially literate ASAP

….and be very comfortable with money – saving, investing and spending it.

That is all I can and will promise. If anything else happens – like I happen to have money for his future life events, that will be ad hoc based on how things are, but I will not jeopardize my own retirement and future (which is essentially, also his issue in the sense of elder care and the Sandwich Generation), to pay for these things. If I don’t have the money, I don’t have the money.

So expecting money from parents?

Not something I believe in…. UNLESS they promised it to you and repeated it to you year after year. I think parents should not do this, or make false, grandiose promises like: “You will have nothing to worry about ever again”.

Expecting even financial literacy? Nice to have, but also not something that could be possible depending on status, income level, etc. Even very rich people don’t have much financial literacy.

At some point, I do think that if we bump up across money and realize we are missing a knowledge gap in it (like I did in my 20s when my student debt triggered me to realize I should make drastic changes), we should take responsibility and learn it for ourselves instead of complaining or blaming our parents for their lack of.

This is why I say – I do not rely on my parents, government, or anyone to fund my life. I am securing it by myself because then I can be generous and help others, all the while knowing I have an iron-fisted grip on my own money situation that is real, and not something someone can take away from me or lie to me about. It is not that I do not trust anyone, it is that I myself if I want that job done right, I do it myself. I want that personal responsibility and mental security that I am solid and can do what I said I would do for our son and to follow through.

For me, being able to keep my promise is important. It is conservative as far as promises go, and anything else is a bonus.