Is it Time to Derail the Gravy Train?
December, 2016 - Issue #146
The term "gravy train" refers to someone who makes or receives money with little or no effort. I am not saying that your 26 year old son sleeping on the couch in the middle of the day fits that definition...but you certainly can.
We have an entire generation that bought into the idea that attending and graduating from a 4 year university, and having $50,000+ in student loan debt, was going to pay off in the end. They were going to get the job of a lifetime and begin the climb up the corporate ladder. Instead, they are often demoralized and cynical. It may payoff some day, but they cannot see it from here.
Their cynicism comes from the feeling that they bought into something that others knew was nothing short of a 'scam' or 'trick'. This is the description I often here when meeting with these young people. Sometimes they ask advice and sometimes they just want to complain. I don't blame them on all fronts, but in the end they still have to find a job and begin paying off their student loans. The highest amount that I have seen from a couple (husband and wife) is just under one million dollars. The average seems to be between $75,000 and $150,000. This is money that has to be paid back with after-tax income. That means the more you earn, the more you have to earn just to pay back the same payment.
I do not believe that our kids should sit around after working all day sending out 27 emails containing their resume. When you are out of a job, your job is to find a job. I know its easy to say, but when do you tell your adult child it's time to move on and move out?
If they are not working and saving money for their first home or investment property, then maybe its time. Many young people think they should live at home for free and spend THEIR money going out and relaxing after a hard and stressful week. I understand the fact they feel 'betrayed' or 'conned' (their words, not mine). But now it is time for them to figure it out on their own.
I have seen parents take out Parent Plus loans instead of saving for retirement. This is often one of the worst moves parents can make. These loans follow the PARENTS forever. They hurt them when they want to buy their vacation or retirement home. Instead, if the student needs money for college, have them borrow it under their own name. There is usually a shortfall after that. Then, have them attend a community college for a semester or two, or even take time off from school in order to work full time (two or more jobs) if they need more money.
Sometimes your loving child drops out of school or never attends in the first place. The same rules should apply: 'save money for your own future or move out on your own and figure it out'. Set a timeline for change. I have seen 30-60 days work out fine. The problem is never the timeline, it's the follow-through by the parents. There is always one that has a softer heart towards this life changing event. Stay strong. You can still have Sunday family dinners or Tuesday night game night back at your house. However, your child has to move on. It is best for them and you.
The stress I have seen on the husband and wife can often be too much to handle. Discuss this between the two of you first, then with the child. They will say things like, "you are throwing me out on the street" and "I have been looking for a job, there just aren't any out there." Both of these statements are not true. There are jobs everywhere, maybe not the one he/she wants, but it is still a job.
Your financial stability and marriage health is a lot more important than your child's insecurities. They need to own the decisions they make, the loans the take, and the consequences of both.
Arif M. Halaby, CEP is the President and CEO of Total Financial Solutions, Inc., a financial and insurance services company based in Santa Clarita, California, with offices extending to the San Fernando and Antelope Valleys.