Already this year during my weekly online discussions (Thursdays at noon), some readers have asked me to weigh in on family financial issues causing conflict.
During one chat, there was a discussion of parents paying for college. I think they should; others don't agree.
"Where is it written that kids at the age of 18 are entitled to be taken care of by their parents?" a participant asked. "It's as if that elusive 'college experience' is what everyone feels entitled to. Hey, it's expensive."
Personal finance is just that: personal. So my views may not align with yours. But when it comes to this topic, here's where I come down: I don't view parents paying for college as an entitlement issue but one of responsibility. Unless your child has been able to work and accumulated the funds to pay for college, where is he or she going to get the dough to cover education?
Without having money stashed away, the student is going to have to rely on grants, scholarships or loans. And what if there isn't enough free money, or none at all? If the young person has to borrow, he or she is likely to be deep in debt even before the first full-time job.
I tell parents if they are able, as soon as a child is born, they should save for college. If they aren't able to save much or got a late start, they should talk to their child about other ways to afford school, such as commuting or going to a community college. In this economy, a college degree is a requirement for many jobs. And for me, this means that paying for a higher education has become part of the cost of parenting.
OK, so now let's skip ahead in years. Your child is an adult struggling financially. You agree to help. But where does the assistance stop? To what is the adult child entitled? Here's a situation a mother who participated in the college-costs chat wanted my help on:
* The background: She and her husband purchased her stepson's home at foreclosure so his family wouldn't become homeless. They paid well below the fair market value and took out a mortgage for the rest.
* The dilemma: The woman's husband wants to share any equity in the home with the son. "My husband thinks that his son is entitled to some of the equity. I, however, do not believe so since they have not made a payment on the mortgage in more than a year. They declared bankruptcy and had more than $170,000 debt forgiven. We are charging them rent, but I have doubts about our ability to collect since his son has been unemployed off and on for more than four years. We are carrying a mortgage and assuming all the risk. I believe we should keep any gains made. What is your opinion?"
* The decision: The discussion is unnecessary. There isn't any money to divide, unless there are plans to sell the home soon.
Perhaps the solution is to eventually sell them back the home. After all, the intention wasn't to make money on real estate, but to help them stay in their home. Right now, they aren't entitled to what isn't theirs anymore.