'Should we let them sink or swim?': Our daughter and son-in-law spend more than they earn. Should I intervene?

By Quentin Fottrell

'She had two rounds of IVF before she had a successful pregnancy. It cost $90,000, which has wiped out most of their savings'

Dear Quentin,

We have two adult daughters.

Daughter #1 is 41, married 15 years to a doctor, has two children, and is doing well financially. Daughter #2 is 37, married 12 years to a musician and just had a baby girl using IVF. She is a physical therapist who stopped working for a year when the pandemic started and has only worked part-time since then. Her husband has a doctorate in piano performance.

For the past seven years, he has tried unsuccessfully to find a full-time university position as a music professor. Instead, he gives private piano lessons and performs at different venues, such as music festivals, religious organizations and retirement communities. He has travel expenses associated with these tours and does not net much money as a result.

Both my daughter and son-in-law spend their money as fast as they make it on fancy cars and home furnishings etc., on a home that is too expensive for their needs in my opinion, and on eating out several times a week. Their house is worth almost $1 million and over the 12 years of their marriage, they have traded up three times.

His mother initially paid cash for their first home and they own the present house free and clear. The mother continues to pay for many of their living expenses, which I don't approve of since they will never learn how to budget or live within their means. She had two rounds of IVF before she had a successful pregnancy. It cost $90,000, which has wiped out most of their savings.

'We are thrilled to have a new granddaughter, but we are torn between helping them financially and not encouraging their entitlement mentality.'

They hired a doula for the delivery and another doula to come to the house each day for at least a month. We think these expenses were unnecessary since he isn't working and can assist with the baby until my daughter is recovered. We know they are hurting for money since he is trying to sell his $30,000 piano that his mother bought for him when he graduated from college.

We gave them $15,000 when they started with IVF. Now my wife thinks we should give them more or even give them a monthly allowance since they depleted much of their savings and he has no prospects of holding a well-paid job in his field. I think he should give up his failed music career, although I have no idea what job would need the skills of a musician.

We are thrilled to have a new granddaughter, but we are torn between helping them financially and not encouraging their entitlement mentality. We are financially able to assist (we have liquid assets of about $1.5 million) and have plans for our daughters to have an inheritance at our death. If we assist Daughter #2, we also want to be fair to Daughter #1.

We don't want this situation to create a rift between our daughters as they are good friends. What are your suggestions? Should we let them sink or swim? Assist them financially? Put conditions on our willingness to help financially? Between the two of them, they have five college degrees. I never thought they would be in this situation.

Happy, But Concerned, Grandparents

Related: 'She won't be happy until he's in a homeless shelter': My sister wants our father to refinance his $1.2 million home to pay off her $120,000 debt

Dear Grandparents,

You can be there for them the day the music dies.

It's their good fortune to have wealthy and generous in-laws, even generous to a fault. It's their personal struggles, mistakes and IVF journey. It's their house-flipping escapades, their love of the finer things in life and, yes, their fluctuating bank accounts. Ultimately, it's their life. You may not like what you see and hear, but you will all be a lot happier if you allow them to live it.

Daughter #2's husband has chosen to be a musician. It's a perilous career with uncertain income. They are, to their credit, extremely well-educated and, from what you say, have the capacity to work as hard as they play. He could get a job teaching at a university or work in music production or music engineering. It's not as easy as a degree in economics, you're right.

There comes a time when you have to allow them to make their own decisions without recrimination or rancor. The only thing you can do is offer them help by paying for a financial adviser or accountant, who can go through their finances in forensic detail, and explain how and why their expenses are exceeding their income, and how they plan for the future.

You obviously love your daughter, but giving them a monthly allowance is likely to exacerbate their spending and enable them further. Refrain from commenting on their decision to hire a doula. That will only focus attention on the minutiae of their daily life. Any criticism of their lifestyle is only likely to lead to a cycle of antagonism and antipathy.

They are sitting on a lot of equity, so you could advise them on downsizing their home when that time comes. Selling their piano may be just the start.

There may come a time when the music stops. You can be there for them if and/or when they need help. That could be in the form of financial, emotional or moral support. They are sitting on a lot of equity, so you could advise them on downsizing their home when that time comes. Selling their piano could be the first sign that your son-in-law is considering a career change.

You have good instincts: Trust them. Don't punish your daughter by leaving her less money in your will. Divide your estate 50/50 based on your love for and support of your children and not because you disapprove of how one daughter lives her life. You can also set up a trust for both daughters, giving them a lump sum and an income over time.

There's a lot you can do to help both of your daughters. Given that both your daughters have their own children, you can set up tax-advantaged 529 accounts for your grandchildren and, if you are especially concerned about estate taxes, even use an irrevocable trust to provide for educational expenses for these and any future grandchildren.

Financial assistance with strings attached rarely ends well. In the meantime, consider taking advantage of the annual gift-tax exclusion ($18,000 for individuals or $36,000 for married couples), meaning that you can give those amounts annually without having to pay tax on the gifts. It's better to operate from a place of positivity and hope than fear and resentment.

Rather than sink or swim, gently nudge them towards dry land.

Related: I give my mother's ailing next-door neighbor $500 a month. She agreed to sell me her house, although she'll continue to live there. Is this a good plan?

The Moneyist regrets he cannot respond to letters individually.

More columns from Quentin Fottrell:

'I feel like a fool': I loaned my friend and former lover $50,000 to help her buy a home - now she's treating it as a gift

'I was heartbroken': My friend set up a $5,000 GoFundMe for veterinary bills after her cat died. I want to donate $200. Is it better to do so anonymously?

'He's 70 and fairly wealthy': I met the love of my life three years ago. How do I politely ask that he include me in his will?

Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.

By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

-Quentin Fottrell

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-08-24 1818ET

Copyright (c) 2024 Dow Jones & Company, Inc.