Because of my parents’ generosity, I don’t have experience with two major expenses that it seems a majority of people have to deal with: student loans and a mortgage.
My parents funded 529 college savings plans for all of us. Thanks to my highly specific skill at excelling at standardized multiple choice exams, scholarships covered my college tuition and half of my medical school tuition, but the 529 plan paid for college room and board and the other half of med school. (I think I paid for the four pre-med classes I took at USD, but they weren’t very expensive.) (I also know my 529 plan didn’t pay for it all, Mom moved some around from my brother’s plan, as he had an all-expenses paid education at the Air Force Academy.) Making it through college and medical school without student loans is a major boost and has no doubt saved me countless worries.
When my husband and I decided to move back to Omaha, Mom told us we didn’t have to worry about applying for a loan: she’d give us the money for the house, and we’d pay her back. In retrospect, I don’t think we set the arrangement up correctly – turns out you can’t just give someone a large sum of money and have them pay you back without some contractual and estate planning considerations – but this arrangement has worked out great for us. Turns out there are a lot of extra expenses you don’t have to worry about when you pay for a house with cash. We have a very reasonable “mortgage” payment that I transfer to Mom’s bank account every month, and with the inheritance we received from various estate sell-offs (again, a major boost!), we’re going to have her paid back in the next seven years, God willing.
As a result of my family’s wealth and generosity, I won’t be able to offer advice based on personal experience for several areas that typically have a large impact on a person’s financial life. This is a good problem to have, but something I will need to keep in mind when I’m tempted to compare my financial situation to someone else’s.
SDG