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The bank of Mum and Dad


Helping your adult children.


In my work, I often encounter people who wish to assist their adult children financially.


This may include:

  • Giving some money to assist with the purchase of a first home.

  • Going guarantor for a home loan.

  • Purchasing an investment property for them to live in, with a discounted rent.


There is no shame in wanting to do this. Housing prices are high and it is hard for the younger generation to get a foot in the door. They are your children, and you want to be able to help them out in life.


It is a great thing to do. BUT

Ensure your financial future isn't adversely affected. I would encourage you to consider the following before proceeding

  • Do you have a fully funded retirement? If not, how will you bridge this gap?

  • If your child defaults on the loan and the bank calls it in, how will you handle the situation?

  • What is the stand-alone strength of the investment?

  • Are your other children also interested in assistance? Is this affordable? If one of your children appears to be favored, will resentment grow in your family?

  • Consider the consequences of a breakup in a current or future relationship. Money gifted to a child might be at risk. If you want to structure this properly, seek legal advice.

  • Are there other ways you can assist them without going all-in?

𝗔𝗻𝗱 𝗯𝗲𝘀𝘁 𝗶𝗻𝘁𝗲𝗻𝘁𝗶𝗼𝗻𝘀 𝗮𝘀𝗶𝗱𝗲, 𝘁𝗵𝗲 𝗸𝗶𝗱𝘀 𝗺𝗮𝘆 𝗡𝗘𝗩𝗘𝗥 𝗽𝗮𝘆 𝘆𝗼𝘂 𝗯𝗮𝗰𝗸.


To quote Moira Rose "𝑰𝒇 𝒂𝒊𝒓𝒑𝒍𝒂𝒏𝒆 𝒔𝒂𝒇𝒆𝒕𝒚 𝒗𝒊𝒅𝒆𝒐𝒔 𝒉𝒂𝒗𝒆 𝒕𝒂𝒖𝒈𝒉𝒕 𝒎𝒆 𝒂𝒏𝒚𝒕𝒉𝒊𝒏𝒈, 𝑫𝒂𝒗𝒊𝒅, 𝒊𝒕'𝒔 𝒕𝒉𝒂𝒕 𝒂 𝒎𝒐𝒕𝒉𝒆𝒓 𝒑𝒖𝒕𝒔 𝒉𝒆𝒓 𝒐𝒘𝒏 𝒎𝒂𝒔𝒌 𝒐𝒏 𝒇𝒊𝒓𝒔𝒕."


𝗧𝗼𝗼 𝗺𝘂𝗰𝗵 𝗴𝗲𝗻𝗲𝗿𝗼𝘀𝗶𝘁𝘆 𝗺𝗮𝘆 𝗹𝗲𝗮𝗱 𝘁𝗼 𝗮 𝘀𝗮𝗱-𝗹𝗼𝗼𝗸𝗶𝗻𝗴 𝗿𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁.


Make sure you have clarity about your future and your retirement numbers first.

𝗪𝗵𝗲𝗻 𝘆𝗼𝘂𝗿 𝗳𝗶𝗻𝗮𝗻𝗰𝗲𝘀 𝗮𝗿𝗲 𝗶𝗻 𝗼𝗿𝗱𝗲𝗿, then you can help others.


P.S. The answer to funding cosmetic surgery, extravagant overseas courses and expensive weddings is NO!


Disclaimer: This information is provided and produced by Lush Wealth. The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.


Our books are open for in-person appointments in Newcastle and Sydney. And online Australia Wide.


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