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Family and Life


This story has all the makings of something viral. It fits right in with our fascination with people doing things that normal Americans wouldn’t even consider doing. We gawk at reality television shows and follow the stories about their stars, like the recent news about the couple from the “Real Housewives of New Jersey” show who recently pleaded guilty to fraud. This story has the added element of millennial-shaming. We like stories when a young individual upholds the generally-held stereotype of entitlement.

If the judge doesn’t throw out the suit from the beginning, some of the facts will eventually come out. But from media reports, it appears that the eighteen-year-old Rachel Canning, identifying herself as a cheerleader and an honor student, willfully left home after not wanting to live by her parents’ rules. These rules included contributing to household order through chores, obeying an eleven o’clock curfew, and breaking up with a boyfriend who didn’t meet the parents’ approval. The girl moved out to live with her friend’s family — and the father in this friend’s household is funding the suit.

The parents, who had been saving some money for their child’s college education, are now refusing to cover the tuition for the expensive college the girl would like to attend and to pay the remaining balance for her enrollment in a private high school.

The story, traveling quickly across the internet, is giving millions of readers the opportunity to ridicule her as a product of the Millennial generation.

I’d like to say that the situation has an obvious eventual conclusion. The child, when she voluntary moved out of her parents’ house after turning eighteen years of age to avoid their rules, signaled that she intended to live without their support. And in fact, she could do just that by switching to public school, getting a job, and if she likes, paying for her own education at a less expensive college. The student, however, is determined to have her parents continue supporting her and her life choices.

The young adult made her own choice and should have to live with the consequences, and those consequences, like forfeiture of support, seemed to be pretty clear from the beginning.

But because this is in New Jersey, the case might have some merit. The courts in this state have ruled in the past that parents are still responsible for supporting their children after the age of eighteen if a child cannot support his or herself. There may not be a reason to think a bright and talented student wouldn’t be able to support herself if she wanted, but working for a living and paying one’s own way through college isn’t as convenient as having living expenses covered by one’s parents. A court will probably have to decide whether the young woman can support herself in the manner to which she’s accustomed. Given that a court in Texas recently that “affluenza” is a reasonable defense, there’s no telling what might happen in court in New Jersey.

Parents have no legal obligation to pay for their children’s higher education expenses. The ability for a child or young adult to receive a college education for free is not a right or entitlement. It’s great when parents can contribute to their children’s education, and I’ve benefited from parental financial assistance for (and after) college. I would never in a million years consider financial support from my parents to be an expectation after the age of eighteen, but I hope to be able to help my children afford the education they want when and if I have children.

But this isn’t charity. When I offer to help pay for college, there will be conditions. The parents involved in this lawsuit are free to require their child to exhibit appropriate behavior in order to receive support, even beyond the age of eighteen. Unless the parents invested the money set aside for college education in the daughter’s name, it would take a court’s decision to force the parents to pay that money. The funds for the private high school education might be different; if the parents signed a contract to pay the tuition, they might have to pay, regardless of the living situation.

A just judge should recognize that the student could easily finish her high school career in a public high school, and private school tuition should be seen as an extra, not a baseline requirement.

What do you think about this story? Does the eighteen-year-old have a case against her parents? Should the parents continue to support her after she refused to live by their rules and voluntarily moved out of the house? What would it have taken for you to sue your parents when you were eighteen?

Update: In the initial hearing the judge did not throw out the case but expressed concern about setting a precedent in which parents would be afraid to set rules of the house. The judge refused an emergency order for the parents to begin paying the teen $600 a week. A hearing on April 22 will determine more.

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Since before the recession, an increasing number of mothers say they’d like to work full-time. The Pew Research Center analyzed new data from the U.S. Census Bureau and conducted a survey to discover this and other family financial dynamic trends.

In 2007, 20% of mothers called full-time employment their ideal situation, while by 2012, that number increased to 32%. Over the same period, the percentage of mothers who would like not to work at all decreased from 29% to 20%.

The new report contains a variety of interesting statistics like the above. While just over half of all respondents, including men and women, say that children are better off with a mother who stays home without a job, only 8% believe that a father’s staying home with children has a positive effect. If I were a father, I might take offense that society considers full-time parenting ineffectual or even negative in the development of children.

The report results seem to confirm that most Americans maintain traditional beliefs about parental roles while reluctantly accepting that society has been changing around them.

Pew Research also analyzes the trend of single mothers.

On the topic of single mothers, most Americans (64%) say that this growing trend is a “big problem”; however, the share who feel this way is down from 71% in 2007. Also,
young adults are less concerned than older adults about the trend. About four-in-ten adults under age 30 (42%) view it as a big problem, compared with 65% of those in their 30s and 40s and 74% of adults who are 50 and older.

The public’s opinions about unmarried mothers also differ by party affiliation and race. Republicans (78%) are more likely than Democrats (51%) or independent voters (65%) to say that the growing number of children born to unwed mothers is a big problem. Whites are more likely than non-whites to view it as a big problem (67% vs. 56%). The views of men and women on this issue are the same.

When mothers are the primary income sources in a household with children under the age of 18, 63% of the time, they are single mothers. Otherwise, they are women who earn more than their partners. In total, mothers earn the primary income — or the only income — in 40% of all households with children. That’s a dramatic shift over the past half-century; in 1960, only 10% of households with children consisted of mothers as breadwinners.

New parents are faced with this critical question. Who stays home with children? The household situation could have an important effect on the emotional development of a child, and conscientious parents can find themselves struggling with determining an answer to the question. And when the discussion comes up, statistics offered by surveys such as this Pew Research Study aren’t helpful, because every situation feels unique.

What support do you have?

Having family and close friends nearby helps. With grandparents available to help once in a while, new parents will, in theory, be less stressful as they adjust to life with their first child. Saving the cost of a babysitter is one benefit, but the emotional support from family members, close in both physical and emotional proximity, can make it easier for a couple to decide to be working parents. That’s particularly if the financials determine that both parents need to generate incomes to avoid financial problems due to the increasing cost of raising kids.

Having a wide network of support also helps from a daily expense perspective. Close family and friends can help provide some of the materials you’ll need as new parents as hand-me-downs. It seems that inheriting clothes from family friends or children wearing the same clothes their older siblings wore has fallen out of favor recently. It may because, relatively to incomes, clothing is a lot less expensive now than in prior generations. But cribs, car seats, strollers, and other baby needs are more expensive, and young families can benefit from items that have been used by friends and family.

Do your children have special needs?

Sometimes life doesn’t fit your plans. You may be financially secure enough to raise a typical child on one income, but later determine your child has special needs that change the course of your life. For example, a child with autism may increase expenses more than $25,000 a year, not including what might be covered by insurance. That’s as much as a part-time job might provide, or a full-time salary in some jobs.

At the same time this extra income is needed to cover the expenses that come along with special needs, the demand for being home with children increases. It’s no surprise that parents of children with special needs often adjust their own life goals, becoming advocates for research, cures, or support for those facing the same challenges. It may be the only way for some to handle the financial and emotional requirements of being a parent for a child with special needs.

Is working financially practical?

Life decisions are often about more than just numbers on a spreadsheet, but you can’t make a good decision without thinking about the finances. It’s not enough to just compare the parents’ lowest individual salary with the cost of child-care. Even with this comparison, values come into play. Imagine a spectrum of child-care options spanning from full-day care in an overbooked facility to a live-in nanny who stays with the family for many years. What is the most basic level of child-care that you would consider acceptable?

Compare the cost of the child-care you wish to provide with the cost of losing an income. You can’t do this comparison without considering the full cost of losing an income. It’s more than just the salary. It could include a loss of benefits. It could include a loss of future opportunities. These should be factored in to the decision, even if it might be difficult to come up with a precise value.

The numbers can only help inform decision, not determine it. You could estimate that your household net worth would accumulate $5,000 more each year if one parent chooses to work and pay for child-care rather than staying home and providing his or her own full-time care. That annual $5,000 could be saved in a college fund for the child, adding up to a substantial amount to help pay for education 18 years later. But if $5,000 a year doesn’t make financial survival difficult, parents may choose to forgo the increased net worth in favor of staying home anyway.

How many children do you or will you have?

With more children, costs escalate, as do needs for child-care. If you are relying on both parents’ careers to afford to raise your children, at what point will the increasing child-care needs prevent a family from maintaining several jobs?

What sacrifices can you make to shift your budget?

Having children requires personal sacrifices. Whether it’s no longer partying at clubs every Friday night, putting aside hobbies, or spending less time at the office, children change life’s priorities. The changing priorities should be reflected in your budget or spending habits.

If you’ve been saving money for a vacation, a new child might change the type of vacation you’re planning, or it might inspire to redirect the savings towards a different purpose, like child-care. You may need to delay traveling the world until your children are grown and earning a living on their own. You may not be able to start the business you were planning.

How did or will you decide who stays home to raise your first child, if anyone? How did your priorities and your budget change? What advice could you give to new parents or potential future parents?

Pew Research Center
Photo: Flickr

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If you’re wondering about the chance your child has to breaking into the middle class by adulthood, a new study by the Brookings Institution provides some clues. The study breaks down the financial development of a person from childhood through adulthood into a number of milestones. With the achievement of each milestone, success for the next milestone becomes more likely. If an adult achieves the final milestone, he or she has an 81 percent chance of being considered a member of middle class (earning at least three times the poverty threshold).

Readers here are probably not concerned with entering the middle class so much as they are interested in maintaining middle class status through difficult economic times or building wealth beyond the middle class threshold. Taking a parent’s perspective, however, I’d imagine all readers would want their children, hypothetical or real, to be able to at least enter the middle class, relatively without help, as an independent adult.

The milestones used in the study can function as markers along the path. For someone who doesn’t meet one of the benchmark criteria for any particular milestone, the chances of being on-track to meet the next milestone are lower. Here are the milestones that help indicate a future in the middle class or better is highly likely.

  1. Family formation (at birth). Born at normal birth weight to non-poor, married mother with at least a high school diploma.
  2. Early childhood (age 0 to 5). Acceptable pre-reading and math skills and behavior generally school-appropriate.
  3. Middle childhood (age 5 to 11). Basic reading and math skills and social-emotional skills.
  4. Adolescence (age 11 to 19). Graduates from high school with a GPA at least 2.5 and has not been convicted of a crime nor become a parent.
  5. Transition to adulthood (age 19 to 29). Lives independently and family income at least 250% of poverty or receives college degree.
  6. Adulthood (age 29 to 40). Reaches middle class, family income is at least 300% of poverty.

The key to building and growing a strong middle class is ensuring those children who were not lucky enough to be born achieving the first milestone get on track to meet the second despite their circumstances, and that’s where community or government assistance needs to play a role. Children born into situations with a successful first milestone have a 72 percent chance of reaching the next milestone, but those without that initial advantage have only a 59 percent chance of getting on track by age 5. This identifies the need for early childhood education.

This 59 percent chance of getting on track to the middle class after missing the first milestone opportunity is the highest chance someone off track will have. If another milestone is missed in later development, it will be much more difficult to get back on track. Those who by age 29 do not live independently and have not earned a college degree and are not earning at least 250 percent of the poverty level have only a 38 percent chance of reaching the final milestone.

The role of early childhood education is important, regardless of the circumstances of birth, but in terms of final outcome, family situation is still determinant. The study offers this observation:

The first responsibility of parents is not to have a child before they are ready. Yet 70 percent of pregnancies to women in their twenties are unplanned and, partly as a consequence, more than half of births to women under 30 occur outside of wedlock.

In the past, most adults married before having children. Now childbearing outside of marriage is becoming the norm for women without a college degree. To many people, this is an issue of values; to others, it is simple common sense to note that two parents are more likely to have the time and financial resources to raise a child well. Many young people in their twenties have children with a cohabiting partner, but these cohabiting relationships have proven to be quite unstable, leading to a lot of turmoil for both the children and the adults in such households.

Government can help to ensure that more children are born into supportive circumstances by funding social marketing campaigns and nongovernmental institutions that encourage young people to think and act responsibly. It can also help by providing access to effective forms of contraception, and by funding teen pregnancy prevention efforts that have had some success in reducing the nation’s high rates of very early pregnancies, abortions, and unwed births. A number of well-evaluated programs have accomplished these goals and they easily pass a cost-benefit test and end up saving taxpayers money.

There is often a prevailing opinion among political leaders that failure to enter the middle class is a result of laziness or poor choices. This study shows, however, that many of the factors that improve the chance of entering the middle class are out of one’s control: family circumstance at the time of birth, early education in reading and mathematics, and appropriate behavior as a child. Without these milestones, breaking into the middle class as an adult is highly unlikely.

The study concludes that more than hard work, entrance into the middle class depends on the choices parents make for their children.

Photo: khrawlings
Center on Children & Families at Brookings [pdf] via Economix

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When I was an undergraduate in college fifteen years ago or so, I convinced my girlfriend at the time to stay enrolled. She was interested in moving back to her home state and pursuing her degree at a less expensive school, but for some reason, I encouraged her to stay at the university with me, which was out of state for the two of us. She helped pay her out-of-state tuition for some time by selling Beanie Babies on eBay. She was able to get the toys at their wholesale prices, and the collecting craze was at its peak at the time.

Out of all the methods of raising money for college, this bothered me the least. The internet has a much broader reach these days, and there are certainly ways students looking for money can use that to their advantage. The one method that has traditionally worked very well for students — especially young, attractive students — is finding someone older and wealthy, and offering companionship in return for a healthy allowance.

Finding dates online is more accepted and easier today than ever before, and it’s so popular that there is more than enough room online for niche sites to flourish. At least one specialized website allows young men and women find their “sugar daddies” or “sugar mommies” — companions who are willing to offer money for companionship. One such website is seekingarrangement.com, and there are many others easily discoverable. Some are focused on the type of relationship wherein one member of the couple has significantly more wealth than the other, while other dating websites cater specifically to wealthy seekers of love.

For a student looking for help paying tuition, an extra $3,000 to $20,000 a month will cover that and more, and that seems to be what many who register on these websites as sugar daddies are willing to provide. This assumes the anonymity of the internet doesn’t persuade enough people to lie about their finances. I can’t begin to think about what may drive a wealthy person to advertise their identities as a provider of cash in return for companionship, but a market exists for everything, and dating websites like these make it possible (just like eBay does for anything other than body parts and relationships).

It is, however, easy for me to understand what young people in need of cash might be thinking when listing their identities as available for companionship in return for cash. Whether students or not, it’s nice to be taken care of. The idea of never needing to worry about money is what drives many people to work hard to find some way of achieving financial independence as quickly as possible, but there are two big obstacles:

  • Many people will never achieve financial independence, whether due to a lack of motivation, talent, or effort. Anyone can reach the point of growing wealth to the point where it will not be an obstacle to reaching goals, but it’s not going to be easy. Finding a relationship with someone willing to share is often a lot easier.
  • Achieving financial independence without a stroke of luck takes time. People, particularly students, have expenses now, and can’t wait to build a successful business over the course of one generation, even if they have the capability of doing so.

While seekingarrangement.com does a good job of explaining that its customers who enroll to trade companionship for money and vice versa are being honest about their needs and desires and this type of arrangement is a fair trade, I can’t imagine relationships based on this type of arrangement are healthy for the long-term. For many, that’s fine; students looking for help paying their tuition may only want this type of relationship until the financial need no longer exists. What happens, however, when the sugar daddy or mommy meets hard times or the younger person in the relationship loses his or her attractiveness in the eyes of the companion who is interested in someone of a specific age? Perhaps I’m trying to apply long-term relationship logic to a relationship that is designed to be short-term, but the websites that enable these matches claim there long-term viability.

There is the danger that these relationships and websites, though they claim the focus is on companionship, could be focused on sex. For some, this may not be a problem; there are as many opinions about what sex is and what it should be as there are people in this world. When you’re looking to pay for your tuition, seeking a relationship with a wealthy companion may be more socially acceptable than offering yourself as a prostitute. Is the difference important?

Would you be comfortable being on either side of this type of arrangement?

Photo: Thomas R. Stegelmann
CNN Money

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Betterment Gifts: A Better Gift Registry

by Luke Landes

I introduced Betterment to readers last year as an alternative method of maintaining a brokerage account. For an annual fee of 0.15 percent to 0.35 percent of your assets invested with Betterment, the company provides a goal-focused way of investing for retirement and saving for future financial goals. The service handles asset allocation automatically based on goals, ... Continue reading this article…

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Moving to Another Town to Find Singles (Rich or Otherwise)

by Luke Landes
Philadelphia Love

There are many reasons to move from one city or town to another. I would expect moving for a job is one of the most popular reasons. If you have a great job working for a company, but they decide, with or without your agreement, that you would benefit the company more working for a ... Continue reading this article…

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It’s More Expensive to Raise Kids Today

by Luke Landes
Teddy Bear

Despite low or stagnant measures of inflation, at least as those numbers are reported by the government, families are faced with expenses that continue to rise. It’s been a while since I last wrote about the Department of Agriculture’s calculation of the cost of raising a child. The last time I wrote about this was ... Continue reading this article…

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Seven Great Gifts for College Graduates

by Luke Landes
Graduation

If there is a college graduate in your life, he or she will likely receive a number of gifts. The first gift will be the realization that it can be difficult to find a job in this economy right now — if the goal is to get a job in the same field of study ... Continue reading this article…

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Men Choosing Fatherhood Over Careers

by Luke Landes
Child and father

Last week, I acknowledged recent survey findings from the Pew Research Center showing that women are beginning to value success in their careers more than men value their own. It’s a historical twist, brought about by the idea that women entering the workforce is no longer related to a necessity, but an innate desire. Women, ... Continue reading this article…

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More Women Than Men Value Career Success

by Luke Landes
Career woman

A new survey by the Pew Research Center shows women have surpassed men in placing value on career advancement. Among 18 to 34-year-olds, 66 percent of women consider being successful in a high-paying career or job is one of the most important things or very important, compared to 59 percent of men. In 1997, 56 ... Continue reading this article…

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Will You Financially Support Your Parents?

by Luke Landes

My recent article on Business Insider points out that more families are living in multi-generational households with the recent shaky economy. While we are technically in a recovery period, the effects of the recession are still present in families. Taking care of elderly individuals is an expensive business, and those who did not save expecting ... Continue reading this article…

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Prenuptial Agreements for Cohabitants

by Luke Landes
Relationships couple

I’ve discussed whether couples should sign a prenuptial agreement before marraige recently. A good prenup can protect both individuals in the couple if a marriage were to result in irreconcilable differences. Signing a legal document of this type could be helpful if the couple owns substantial assets or if there is a wide disparity in ... Continue reading this article…

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The Dangers of Motivating Kids Through an Allowance

by Luke Landes
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Parents who offer their young children an allowance or pocket money are helping to introduce the concept of money at an age when they are susceptible to ideas they will hold for the remainder of their lives. It’s a good idea to allow kids to gain exposure to to concept and application of income and ... Continue reading this article…

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The Role of Money in Choosing a Relationship

by Luke Landes
Relationships couple

Do people have any kind of control over whom they fall in love with? Perhaps Cupid’s arrow strikes randomly, and there is no choice but to obey the heart — or chemicals in the brain — or sexual urges. But once that initial response has subsided, if you and your partner are headed for a ... Continue reading this article…

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The Lonesome, Pet-Free Life

by Luke Landes
Rupert

For almost as long as I’ve been living without a human roommate, I’ve enjoyed the company of my cat, Rupert. I adopted Rupert from my friend who determined his newborn daughter was allergic to cats. He had already owned Rupert for a long time, and I knew I’d be the cat’s new owner for the ... Continue reading this article…

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Five Conversations Before Moving In Together

by Aloysa
Couple

This is a guest article by Aloysa, a creator of My Broken Coin. In this article, Aloysa offers five conversation starters for couples considering moving in together. Based on my own personal experience I can tell you that expectations of your significant other change as soon as you move in together. All of a sudden, ... Continue reading this article…

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Materialistic People Less Happy in Marriages But Have More Money

by Luke Landes
Wedding Couple

Money and things have never been important to me. Do you agree or disagree with this statement? (That is, assuming the statement is about you, the reader, not me, Flexo.) If you do agree with this statement, according to a new study released by Brigham Young University and William Paterson University, you would be more ... Continue reading this article…

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8 Tips for Talking About Money With Your Significant Other

by Margaret

About the author: Margaret is a recent college graduate who, with her boyfriend, plans to save up money to get married, pay off student loan debt and head to seminary. Money is one of those things you’re not supposed to mention in polite conversation. But if you’re married or in a serious relationship, you have ... Continue reading this article…

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Save Money By Not Having Children

by Luke Landes

I don’t have children; perhaps I will at some point, but I don’t see kids in my immediate future. It’s not due to the cost of raising children, though for many years, I believed I wasn’t in a financial position to provide all that I would want to provide to a child growing up. A ... Continue reading this article…

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Involving Children in Household Money Management

by Luke Landes
http://farm6.static.flickr.com/5259/5437895492_b0e84aaf2b_b.jpg

At the right age, involving children in the household financial planning process can be a good way to teach responsible money management. Children internalize best practices when they not only receive meaningful instruction, but have visible, positive role models as parents. If parents want to impart a lesson of “buy only what you can afford,” ... Continue reading this article…

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