Way back when, in the good old innocent days of 2014, a story appeared in Toronto Life magazine with the title: “The Bank of Mom and Dad: confessions of a propped up generation. It seems like every 30-something couple has an embarrassing financial secret: their boomer parents are covering their mortgages, child-care costs and other expenses.”
The story told the tale of what many urbanites experience but rarely confess… that their life was largely made possible thanks to well-off, though not necessarily uber-wealthy, parents. As author, Leah McLaren wrote: “The ‘velvet handshake’—an early inheritance from a relative before said relative dies—was once only common in wealthy circles. Now it’s the secret force powering the city’s middle-class downtown economy. Millions of dollars are being transferred within families, usually between living generations, in order to prevent adult children from going into a dangerous amount of debt as they enter the housing market and struggle to pay for their own kids’ nannies, summer camps, piano lessons and iPhone bills.”
Yet regardless of how common it might be, for many people getting financial help from one’s folks remains a taboo topic. Perhaps taking the money feels like giving up one’s independence. Or it feels like a failure at adulting. In some cases, the money might come with strings – emotional or otherwise – that make it hard to accept.
Well, 2020 – the year of coronavirus – is here to change all that. Never before has creative financing meant so much to so many. The reality of zero income quickly sucked the stigma right out of needing a little help to make ends meet. Even Zaddy Trudeau has been writing cheques with no questions asked.
In June, Rob Carrick, personal finance columnist for The Globe & Mail made it officially OK. “It has always been true that having parental help is a big factor in achieving financial success in life. Now, with unemployment rampant among young adults, it’s going to be essential.”
So for those fortunate enough to avail of the Bank of Mom and Dad, what are the ground rules for being adult about it all?
Start by exhibiting the values they hoped to instill in you. Give them the respect of caring for the money they provide. Let them have the gratification of seeing you use it frugally and wisely. Show your integrity by paying the money back on a schedule, if and when you can.
Finally and perhaps most importantly, is gratitude. Saying thank you is a start, as the 19th century Swiss philosopher, Henri Frederic Amiel advised. “Thankfulness may consist merely of words. Gratitude is shown in acts.” So consider what your parents would consider meaningful and make it happen for them. Help Dad put up the shelves Mom has been wanting for the past decade. Show up for Sunday lunch now and then. For most parents, your presence is present enough.