The Bank of Dad – Closed for Business! (Part 4)
Image sourced by gaspar zaldo @gasparzaldo
Earlier this year, my 31-year old daughter Alice got DOGED!
When the U.S. Federal Government cut the funding to USAID, that nixed the funding to the not-for-profit organization Alice worked at.
Alice was an advocate for global youth nutrition, which I’d say, is pretty darn important.
Wrong place, wrong time along with thousands of others. UGH!
Crazy world!
I got laid off twice so I can relate.
There’s the financial issue and then there’s the emotional issue. The feeling of rejection and the fear of what’s next can be overwhelming. It was for me. But I reinvented myself and powered through.
When Alice got laid off, voluntarily, I reopened the Bank of Dad for business once more. Glad I was in a position to help and contribute to her living expenses – food and rent.
Separately, my son Mike V. is heading to law school in August and asked me to contribute money towards his education.
The primary financial question is, can I afford to contribute money to Mike’s law school tuition without hurting my retirement years? And how much can I reasonably contribute to him?
Especially after I gave Alice some money for food and rent.
And If I contribute money towards Alice’s living expenses, could I still afford to give any money to Mike? Or would it be more prudent to present the ‘facts of life’ to Mike and cut back?
I’m confident that you can see the dilemma.
Mike wants to become a Public Defender to help people achieve justice! Exciting. I’m SO Proud of him!
If he does become a public defender, this means it’s highly likely his salary will be lower than the salary a private law firm would pay.
Mike attended college at one of the SUNY schools. That stands for State University of New York.
With good fortune and some luck, Mike graduated college debt-free. Thanks to a bull market in the stock market, his mother and my contributions to his college tuition and his inheritance from Grandma, we were able to cover his expenses. Fortunate indeed.
After Mike graduated college, I told him, “College was on us. Law school is on You!”
My message was that he had to save money and take out student loans – borrow money – to fund graduate school.
I don’t know whether he missed the memo – that I was encouraging him to save money for law school or he ultimately discovered that law school is ‘not a cheap date’.
Mike worked as a paralegal for four years between college and law school.
He has never told me how much money he saved. Although I’m very curious to know.
But he sure seemed to live well, including taking vacations, flying to see his cousin in Los Angeles and flying back to New York to see his girlfriend.
I’m not criticizing him mind you. Rather, I’m wondering whether like many of us, fun and desire overtook saving money.
Since Mike is an adult now, graduate school is not my responsibility but I think a good question as a caring parent.
In fact, in the Fall of 2025 law school tuition alone was $81,000.
I told Mike that I would contribute some money and match the money that I gave his sisters.
He retorted, “That’s all you’re going to give me? You make a lot of money.”
WOW!
I Never would have said that to My Dad. A thought or remark like that never would have even crossed my mind!
Mike is truly a great kid, hands down 360°!
And I think his remark came from some residual anger and resentment from the divorce.
And the fact that his mother and I had different views about money and spending and none of us ever seemed to have a candid conversation about money.
In some ways, I can understand his anger!
Or maybe the reality of the cost of law school, textbooks and living expenses finally set in. I can understand that too.
It’s time for me to gain an understanding of where he was coming from. Which I’ll start on when he moves back to New York next month.
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If I didn’t know better though, I could have sworn that I was speaking with my ex-wife. UGH! And if so, that’s just not fair. I thought that ship left the pier years ago. But that’s probably another story for another day. . . or better left in the history books!
While you’re pondering whether to contribute money towards your adult children’s living expenses and how much, grab these 13 ways to manage the ‘Bank of Dad’ and the ‘Bank of Mom’:
Check out the tips we presented in The Bank of Dad – Part 2 plus. . .
Take a fresh look at your personal budget and spending plan.
Or create one.
Evaluate your actual spending and financial position against your personal budget and spending plan.
If you’re falling short of achieving your financial goals, carefully revise your personal budget and spending plan.
If you contribute money to your adult children, for example, covering their living expenses, will you Still be able to achieve your financial goals? For example, will you be able to live the life and retirement you want?
And please don’t overlook the ever-rising cost of healthcare.
How likely is it that Your parents and/or grandparents will need a financial contribution from you – assistance covering their living expenses?
And where will that leave you?
Regardless of what you decide. . . Set the Rules for the Bank of Dad and the Bank of Mom.
You’re the CEO – Chief Executive Officer of The Bank of Dad or The Bank of Mom. You get to steer the ship.
Communicate the Bank’s Rules to your children. While it’s not always easy, Be Transparent. Speak from practicality and from the heart. And last but not least. . .
Stay the course.
To the extent the cost of living continues to rise and it becomes more and more difficult for our children and grandchildren to replicate the lifestyle we have enjoyed and you do want to contribute to your adult children’s living expenses, develop a realistic understanding of what you can and cannot afford, without sacrificing your well-being and your future. It’s not always easy!
Set boundaries. And. . .
As my grandfather Max used to say, “Stick to your guns.”
See you next week.
Arthur V.
Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!
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