Bank of Mum & Dad - Fairness??

seaspray10

After much persuasion (due to them both wanting to be independent) my kids will now use “the bank of mum” but only as an interest free loan.
It’s taken a while for me to get them to understand that my spare cash is sat in the bank doing more or less nothing, and I see it as a pool of cash that’s available to either one of them when needed.
So far they’ve always paid it back in, although it wouldn’t matter to me if they didn’t. After saying that, I do feel really proud of them both for treating the bank in this way.

Sea_Shell

Looking at this another way. Say the money was from a modest lottery win, and you wanted to give it away. Would you equal split, or still give (much) more to the one you felt had greater immediate need?

pickledonionspaceraider

I am not a big believer in Bank of Mum and Dad.

If someone needs a new car or a house deposit etc, I do not know anyone as a parent who would have 10k just sitting around doing nothing, that they can afford to gift

It is not like that where I come from

Parents are severely depleting their own retirement funds and having to work longer and harder so their pampered offspring can drive round in new cars, and have large weddings?

Enabling kidults to keep rebounding with the sense of entitlement that mum and dad will fund their lifestyle. I would be tightening the purse strings and tell them to get a second hand car / downsize a wedding that they can afford and live realisticly within their own budget or get a second job

silvercar

I think one issue is that "fair" and "equal" are often two different things.

I agree with this.

Financially my two have received differing amounts, mainly due to things being more expensive by the time DS2 reached the same stage in life. eg both went to university but DS2 hall fees were a lot higher (for the same hall) so he has had more help.

DS1 wanted to do a masters degree, so we agreed to fund (there was no funding for masters degrees available at the time). Then DS2 also wanted to do a masters and the tuition fees have increased a lot (and there still wasn't government funding available).

So they have both had equal provision, but one costs a lot more.

I am aware that DS2's student loan is much higher because tuition fees increased to 9k by the time he started.

seaspray10

Sea_Shell wrote: »

Looking at this another way. Say the money was from a modest lottery win, and you wanted to give it away. Would you equal split, or still give (much) more to the one you felt had greater immediate need?

I’d split it equally but there isn’t a vast difference between their financial positions.

seaspray10

pickledonionspaceraider wrote: »

I am not a big believer in Bank of Mum and Dad.

If someone needs a new car or a house deposit etc, I do not know anyone as a parent who would have 10k just sitting around doing nothing, that they can afford to gift

It is not like that where I come from

Parents are severely depleting their own retirement funds and having to work longer and harder so their pampered offspring can drive round in new cars, and have large weddings?

Enabling kidults to keep rebounding with the sense of entitlement that mum and dad will fund their lifestyle. I would be tightening the purse strings and tell them to get a second hand car / downsize a wedding that they can afford and live realisticly within their own budget or get a second job

I agree, there’s a big difference between want and need.


One of the reasons mine always pay it back is because they think that one day, I may need it myself (and maybe I will) but if they do need to replace a car, I’d rather they used family funds, rather than paying 6% interest on a loan.

itsanne

pickledonionspaceraider wrote: »

I am not a big believer in Bank of Mum and Dad.

If someone needs a new car or a house deposit etc, I do not know anyone as a parent who would have 10k just sitting around doing nothing, that they can afford to gift What constitutes sitting around doing nothing? Interest rates are so crap that pretty much any money (as opposed to investment) is doing exactly that.

It is not like that where I come from That's fine, and is bound to colour how you see things. However, many people do have 'spare' cash. It's up to them how they choose to spend it, whether on flash cars, expensive holidays, blowing the lot or subsidising their children.

Parents are severely depleting their own retirement funds and having to work longer and harder so their pampered offspring can drive round in new cars, and have large weddings? Something of an assumption there, on all sorts of levels ....

Enabling kidults to keep rebounding with the sense of entitlement that mum and dad will fund their lifestyle. Another assumption I would be tightening the purse strings and tell them to get a second hand car / downsize a wedding that they can afford and live realisticly within their own budget or get a second job

When/if you have kids you might do that - or you might not. I suspect it's one of those things it's easy to have particularly strong views about when not actually in the situation. Circumstances differ, both the parents' and the children's, and affect what people actually end up doing just as much as their original thoughts on the matter.

arbroath_lass

Sea_Shell wrote: »

If you had £10k that you were able/willing to 'gift' and 1 child needed it (eg. a new car), would you gift it all to them, because they asked/needed it now, or would you ensure it was shared equally? What if child 2 also needed £10k next year - hard cheese? Would you give £5k and keep back £5k for child 2?

If my parents had £10k "spare" I'd much rather they spent it on themselves. IF I desperately needed x amount and they had it I'd make damned sure I paid it back, they earned it.

Lunar_Eclipse

I think if there is an amount of money being gifted, as per your opening post, then fair = equal split. Unless one child is a multi millionaire and the other living in poverty (incredibly unlikely!) then a 'normal' span in wealth difference doesn't come into it so nothing else would be fair in my eyes.

Outside of this, I think it's fine for parents to lend different amounts of money to one child for anything requested. For example, I've borrowed a few thousand pounds for a car purchase and twice for a house purchase. It was money I paid back. My sister has done the same at separate times in her life.

enthusiasticsaver

We have benefited financially from gifts from my mum and she has always been scrupulously fair in treating myself, my sister and my brother the same.


We have tried to do the same with our two daughters. They both had money for university, buying their first home, help with cars and letting them stay at home rent free for saving for other reasons and holidays where they have come with us. The only difference is we have gifted money to our younger daughter for her wedding and we have helped with costs for a new baby. As our eldest is not married and does not have kids we have not given her the same although we did give her some towards home improvements and paid for a few holidays for her when she came with us.


My elder daughter was fully understanding of the reasons for the wedding gift to our youngest and pointed out she was earning a lot more and did not need as much help now. Of course this may change in the future so I think help should be based on need as well as trying to be fair. If one or other of our daughters was not sensible with money I think I would also be reluctant to gift them but luckily they are both financially clued up.


On the scenario quoted in the OP though I think the fair way would be to split the £10k and the one who needed a new car could pay the rest themselves or get a cheaper car.