I recently received the happy news that my oldest daughter is engaged to be married. While I am thrilled about the news, I couldn’t help but start worrying about the cost and how to squeeze it into my budget. Unfortunately, because I have four kids, the ongoing costs I have are somewhat substantial. My oldest has been “off the payroll” for a few years now, but I fully intend to contribute to her wedding. But what other things should I contribute to?
Spectrem conducted research with wealthy women (those with more than $1 million of net worth). In Successfully Growing Your Business With Wealth Women we asked what parents should assist their children with financially. As you can see below, 94% of wealthy women felt they should assist their children with college/technical school and 28% felt that they should assist their children with their post-graduate education.
Fewer wealthy women feel that they should finance an automobile for their child (48%) and even fewer felt they should contribute to the first home (39%). Only 3% felt that parents should finance none of the above.
Although most wealthy women believe that they should contribute to their children’s education, our recent research with High Income Millennials indicates that almost 70% of high income millennials have student loan debt.
So how much have I contributed? Well, so far, my husband and I have been able to finance college and post-graduate educations for two of our four children. Fingers crossed that we can afford the same for the last two. But we haven’t financed automobiles (they use the family cars or take the leftovers). We have not had the opportunity to assist with a first home…but we don’t plan on assisting. At some point we need to save for our own retirement.
Why is this important for financial providers and advisors? It’s important to understand the mindset of wealthy investors and the expenses that they anticipate they will have in the future. Clearly younger investors have higher financial contribution goals than older households.
And what about the wedding? Research Spectrem conducted in the past showed the ranges for wedding costs spanning from $5000 to $65,000. We will be updating those numbers as well as a lot of information about the costs of parenting in our new report coming out this month - Parenting and Financial Issues.
Maybe eloping is a good option?