Hey not trying to tell you how you should raise your kids, but if you wanted them to get ahead in life shouldn't you let them save up that extra dollar instead of paying board to you?
I am an empty vessel...
- Thread starter Television
- Start date
Agree.
Wait for your mum to bring the board subject up and then pay it to her, if she owns the house and pays the bills etc.
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You would think so, wouldn't you?
Sometimes, the parents may start to feel like they are being taken advantage of.
What if the parents give this free rent/low rent on the premise the child is saving for an IP.Now the child starts buying expensive shoes (or a lot of cheap ones) because they just needed them.They go out with their friends a couple of times a month, for pizza, beer and a movie. Once a year they decide to go to Bali with their friends.
The parents didn't intend for their child to spend their money on this stuff.
It's much easier for the child to leave home, and stand on their own 2 feet.
The last thing I ever wanted to happen was our children to leave home after a big fight. I thought it was best for them to always know years before, and the youngest always watched the oldest one heading off on their own.
We were always there for them, should the situation arose, to offer advice when asked.
Deltaberry, my opinion is that by doing so, you are not sending the right message to them in relation to prioritising finances. In real life, their landlord is not going to let them off with the rent so they can get ahead...
I think it is very important to show your children the value of the dollar, and what it means to be accountable.
As others have mentioned, I have already made the decision to charge all of my kids board, commensurate with their earnings (part time or full time), but will put it away and give it back to them for the purchase of their first property. I will also go to great lengths to keep them from knowing what my plans are too.
I will however, be happy to pay for their university education should they choose to go down that path, as long as they attend straight after (or soon after, within reason) high school...s'pose I'm just a big softie
Boods
Hi,
I don't think paying board to parents limits the ability for kids to invest their savings by a large degree.
Being 21 myself, i've payed 2/3 of my income to my parents as board for the last three years which is about $1400 a month going to my parents. Paying this hasn't stopped me from finishing uni (thank god its finished), buying an investment property with $65K equity and having $20K in shares as well as going on a holiday around asia.
I have to say, paying board has taught me the value of money and hopefully in the coming year will be able to buy another property. Just need to find the right one with a granny flat.
I don't think paying board to parents limits the ability for kids to invest their savings by a large degree.
Being 21 myself, i've payed 2/3 of my income to my parents as board for the last three years which is about $1400 a month going to my parents. Paying this hasn't stopped me from finishing uni (thank god its finished), buying an investment property with $65K equity and having $20K in shares as well as going on a holiday around asia.
I have to say, paying board has taught me the value of money and hopefully in the coming year will be able to buy another property. Just need to find the right one with a granny flat.
This is an excellent approach. Your children are learning a lesson in responsibility whilst getting ahead financially. Win/win. And what a fantastic surprise it will be for them when they're ready to buy their first property.
I'm amazed by these figures... if not a little sceptical.
2/3 of your income = $1400/month
Total income = $2100/month
Maximum savings possible (assuming no expenses for car/petrol/insurance, mobile phone, food, clothing, university, entertainment) = $700/month
Over three years (the period in which you've been paying board)
700 * 36 = $25, 200 as the maximum possible amount you could have saved.
You list assets valued at approximately $82, 500
Equity - $65 000
Shares - $15 000 (you listed a value of $20k but I thought I'd be generous and show a 25% increase which is pretty decent)
Holiday - $2 500
So with total possible savings from age 18 being $25 200 and total assets equalling $82 500, does this mean you saved around $57 000 before you were 18?
Sorry, born a sceptic
As a follow up,
Had a conversation with Mum last night and I'll now be paying $65/week in board. A schedule of chores has been established as well to keep me honest and make sure I pull my weight.
Had a conversation with Mum last night and I'll now be paying $65/week in board. A schedule of chores has been established as well to keep me honest and make sure I pull my weight.
This sounds like a really good outcome - well done.
I'm amazed by these figures... if not a little sceptical.
2/3 of your income = $1400/month
Total income = $2100/month
Maximum savings possible (assuming no expenses for car/petrol/insurance, mobile phone, food, clothing, university, entertainment) = $700/month
Over three years (the period in which you've been paying board)
700 * 36 = $25, 200 as the maximum possible amount you could have saved.
You list assets valued at approximately $82, 500
Equity - $65 000
Shares - $15 000 (you listed a value of $20k but I thought I'd be generous and show a 25% increase which is pretty decent)
Holiday - $2 500
So with total possible savings from age 18 being $25 200 and total assets equalling $82 500, does this mean you saved around $57 000 before you were 18?
Sorry, born a sceptic
Yea sorry I did exactly the same calc when I saw that post. Not sure how that's possible.
Even if he didn't pay any board, he could only have saved $50.0k over two years, without spending a cent of it. Not sure where the $82.5k comes from, unless it was from substantial shares appreciation.
Hi Television,
Most of my equity comes from capital gains.
I bought my property at December 2008 for $132K, and since the government was then giving the $14K FHOG, it was more than enough to cover the deposit and other purchasing expenses. While I was living in the property for 6 months, I had my cousin and his wife as boarders, who later became the tenants and the property was basically positively geared from day one. I recently had the property valued by CUA at $178K and I have an outstanding loan balance of $113K. So basically the property has been free and I have had to pay very little out of pocket.
With the shares, I was lucky, since I started with only $7.5K, but since I started investing October 2008, I was lucky enough to buy stocks such as Worley Parsons, AQA and other miners and banks who went up heaps. Unfortunately I sold some of them early and could have made larger gains, and I am also down big on one of my speccie stocks.
For me, its been all about timing and luck. I've also had a couple of friends who have bought properties in the Lakemba area in early 2009, who also pay their parents a large part of their income as boarding. It also helped to work full time while at uni.
Most of my equity comes from capital gains.
I bought my property at December 2008 for $132K, and since the government was then giving the $14K FHOG, it was more than enough to cover the deposit and other purchasing expenses. While I was living in the property for 6 months, I had my cousin and his wife as boarders, who later became the tenants and the property was basically positively geared from day one. I recently had the property valued by CUA at $178K and I have an outstanding loan balance of $113K. So basically the property has been free and I have had to pay very little out of pocket.
With the shares, I was lucky, since I started with only $7.5K, but since I started investing October 2008, I was lucky enough to buy stocks such as Worley Parsons, AQA and other miners and banks who went up heaps. Unfortunately I sold some of them early and could have made larger gains, and I am also down big on one of my speccie stocks.
For me, its been all about timing and luck. I've also had a couple of friends who have bought properties in the Lakemba area in early 2009, who also pay their parents a large part of their income as boarding. It also helped to work full time while at uni.
Ah, makes more sense now. Well done, I've got a bit of money sitting here that I thought I might try put in the share market (around 12k, saving for the first deposit) but I figure for now I'm better off keeping it in the high interest account.
Thats probably the wiser and safer option. The stock market hasnt been kind to me in the past year and i think we might have more of the same this year.
I've got around $8K saved up and need to buy a car as well. The Toyota 2.9% finance offer seems enticing to me, but not sure if its worth buying a brand new $26K Corolla even if its on a low interest loan. It will probably impede my ability to get a mortgage for any future IP purchase.
Good start with the boarding though and doing the chores. Good luck.
I've got around $8K saved up and need to buy a car as well. The Toyota 2.9% finance offer seems enticing to me, but not sure if its worth buying a brand new $26K Corolla even if its on a low interest loan. It will probably impede my ability to get a mortgage for any future IP purchase.
Good start with the boarding though and doing the chores. Good luck.
