Personal Finance 

When Is A Gift More Than A Gift? [Part 1]

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In my post about ideas to solve the 20% home down payment dillema, I suggested that one turn towards gifts from parents and relatives to help lighten the burden of coming up with a 20% down payment. In the comments, Tim and Saladdin started debating the issue of these large monetary gifts and the issues surrounding it within the comments. I asked both if they’d be willing to continue the debate on email and if I could capture it, I was thrilled when they agreed. Both have been commenting on BFP for quite some time, as of this writing Tim has 111 comments, and both are very smart and quite eloquent writers (based on their comments and their emails). What you’re about to read is extremely long (and it is only Part 1 of a multi-part series) but it is incredibly passionate and insightful to both sides of the issue.

One thing of note, while the conversation does have personal elements and both use strong language, this never got personal. I pulled out some parenthetical text and some opening and ending statements (mostly to the effect of, ‘hey this isn’t personal,’ etc).

I asked Saladdin to go first.

Saladdin: To me it is simple. Why would an adult need to take the money? This is not money to feed your kids or keep the electricity on. To me taking the 20%, and lets admit this is not $200 but someone’s hard earned money, is akin to begging. Whose responsibility is it to save for a house? Haven’t mom and dad already struggled enough?

I was thinking about this on my hour drive home from work. I am 33 and graduated high school in 1992. I am probably the only person ever not to send out graduation invitations because he thought it felt too much like taking a handout.

Just to back up a second. How could I look at myself in the mirror knowing I was taking someone else’s money that they had saved for years to put back. It would take a strong parent to turn down their kid asking for money, even if it was their only savings and would put them in a bind.The parent would never admit it caused them financial harm. Should this not be a variable? How many save in their 30’s so that they can pay for their kids house?

I graduated from high school and raised my brother until he was 18. I did this with no help from parents. When he turned 18 I enlisted in the military and saved every penny I could. Once I separated I went to school full time. From my first semester of college to my last was 10 years. I am the middle of 3 kids and the only one to graduate high school much less undergraduate and graduate degrees. Now I admit I took grant money and that was a hard decision. But I rationalized it as my tax dollars anyway. What is your opinion on that?

Do I feel as if I have earned my life? Hell yes I do. I know without a doubt what’s mine is mine and I earned it. Whatever happened to that feeling? Do people not believe in that anymore? Earning your own way…Buying your own house.

My girlfriend of over 4 years is fully aware of my opinions on this. Her family has a business that
grosses 500K annual. They employ only 6-7 people so you can see the money floating around. Her two sisters have their hands out all the time because of cars being repo’ed or house’s being foreclosed on. And are always being bailed out of money problems. I pay for her school (among most all things) even though we do not live together (her dad died and her mom took it
very badly so she stays with her mom). Ok, you may look at this as giving her a handout but like
marriages (no, we are not) we are a team and it is my job to give her a better shot at life. As she would with me. Again, I am talking about supplying money/support for education/life not a lakeside view on a beach. More rationalizing I wonder?

When my girlfriend questions some of my money motives (for example I refuse to accept Christmas presents from her mom but not out of dislike or birthday presents)I tell her “I slept 13 miles from the Iraqi border with a loaded M-16. I can take care of myself.” Yes this is overly dramatic and has now become an inside joke for us. But she realizes I mean it. That I can take care of myself and her. I’ve proved it. I did not have to run for help from grandma.

Maybe it is because of pride or ego. But what is wrong with that? What is wrong with wanting to be proud of accomplishing something on my own. Of saying, “Yes it is not the best house on the block but it is 100% mine, not 80% mine and 20% dad’s.” How can I sleep in a house that was partially paid for by my parents? How can that house be called “mine”?

Let me end with this. If you sold the house would you give that 20% back? What if your parents came back to you and said they needed that money back for retirement. Would you sell the house? All I know is that I wouldn’t have too. I would have bought my own home.

Tim: Sometimes a gift is a gift. If someone has the means and the desire to provide a substantial gift, then why not? It is truly an ego and pride thing, if one cannot accept a gift in of itself. Your history suggests that you have a difficult time accepting gifts without thinking there are strings attached. There is absolutely nothing wrong with wanting to “earn” your life; however, there is also nothing wrong with accepting gifts.

Sometimes it isn’t about you: people want to give gifts, because it makes them feel good to do so. My wife has a hard time accepting things from her parents, because she feels that they have done enough to raise her; however, I remind her that it isn’t about her, it’s about them. They want to give her things, because they can and they feel good about doing so. Part of it is cultural. The premise that you’ve had to work for everything that you have ever earned is admirable, but it is again also a pride issue. It helps you justify not having. Again, nothing wrong with this. However, everyone needs help or charity at some point in their lives (as you mentioned you accepted grants). If you refuse it, because you want to “earn your life”, then, yes, it is a
pride issue. If you can “earn” it on your own, then more power to you. If you cannot but are still unwilling to accept charity or a gift, then it is simply born out of stubbornness.

The great thing about gifts is that there are no strings attached. I’m sure you are happy to give gifts and consider yourself generous: you are paying for you girlfriend’s school on the premise of giving her a shot of a better life and being a team. She is over 18, her family does have the means to support her (company earning over $500k/year), and you aren’t married are you not? So why is it alright for you to give a gift, but not to receive one? Do you now own an x% of her life that she needs to repay, because you paid for her education? Can you sleep at night having financed her education and life? What happens when you don’t get married? Don’t take it wrong, but your life is a cliché for the poor kid who looks down on people with means, and struggles for inclusion into the group because you want to prove and show them you earned it all on your own.

Are wealthier people that much happier (obviously not as you’ve mentioned your girlfriend’s family)? Do you really want someone far wealthier than you saying, oh look at poor [Saladdin], he can’t even afford a nicer house because he didn’t accept a gift that could have gotten him into a nicer house? What was the premise for not accepting a gift again? That’s right you look down on people who receive gifts because it is a handout and they didn’t earn their life. Do you think the same of your girlfriend? It is in fact the same. Again, no arguments about wanting to earn your own way through life; however, there is something condescending about someone who gives charity and gifts, but cannot accept them in return.

It is interesting that you chose (Saladdin) Salah al-Din as your username. Salah al-Din was a
great, fierce warrior. He died penniless, without a dime left to pay for his funeral. He had given all his wealth away by the time he died.

It took a gift to pay for his funeral. Sometimes a gift is a gift.

The comments are open and waiting for your opinion, experiences, and impressions! I originally was going to turn off commenting and have you read all the parts (there are a total of four) but decided against it. I want you all to not make it personal, as in this isn’t about Saladdin or Tim, but keep it to the topic at hand – whether or not accepting gifts is acceptable. If things turn into comments about the two participants and not the topic, I’ll shut down the comments and go with the original plan. Thanks!

I made the mistake of not turning comments back on after changing my mind! Sorry!

Part 2 to follow…

{ 3 comments, please add your thoughts now! }

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3 Responses to “When Is A Gift More Than A Gift? [Part 1]”

  1. Shadox says:

    Wow. Good discussion.

    I am completely on Tim’s side on this one, but I completely understand why Saladdin is reluctant to take gifts. It is very hard for me to accept gifts as well.

    I don’t think that accepting a gift from a loving relative is akin to accepting charity (although there is nothing wrong with accepting charity if you need it). As a parent I know that parents are really protective of their kids (news flash), and genuinely want to help them achieve their goals in life. Yes, I would love to help my kids buy a house. If I did it would have nothing to do with charity, it would have everything to do with my feeling like a good, protective, successful dad. It would give me pleasure to help them out.

    So, while it’s hard for me to accept monetary gifts, when my parents want to give me a few dollars, I accept. Even though I am in my mid-thirties, probably make more money than my parents, and can make do on my own. They enjoy it, why would I deny them that pleasure?

  2. plonkee says:

    So far, although I’m with Saladdin on not accepting requesting large gifts (like a house deposit), not accepting gifts brings its own strings. You can’t live you life in a completely independent fashion, never accepting help and remain completely normal and sane.

    In my family, refusing to accept Christmas presents would be the same as refusing to become one of us, rebuffing offered friendship, and would not generally be acceptable behaviour. A gift like that is a token of friendship and appreciation. The polite thing to do is accept it graciously. If it comes with other strings, then that’s a different matter.

    To be honest, it sounds like Saladdin has a chip on his shoulder about having to grow up too soon and he comes across much like a petulant teenager. But maybe this will improve as the exchange goes on.

  3. Itch says:

    Well, I’ve been ‘gifted’ twice. Once without forewarning and once with much thought.

    First time was with a house down payment. And believe it or not but it wasn’t expected. I had been saving consistently for a couple of years getting up ~ 10k in CD’s. It was my emergency fund/house deposit. At the same time it was when interest rates were _amazing_ low. One weekend when they visited, I was talking about a townhouse I was interested in. My folks ended up matching my down payment. And amazingly it wasn’t without reason or just a desire to gift me. First was the low rates, they felt it was foolish not to invest/buy at that time. Secondly was inheritance taxes. They have the plan to divest everything they can to me and my siblings as close to but not after they pass. Not to keen about giving anything to the government.

    And the second time was a pure offer. Was married by that time and my car was starting to get along in years. I was told if desired, they would get us a new one. Talk about being floored. The reasons they gave us was safety of she and I b/c of the age of my car as well as any future kids.

    Never in my life have I ever lost sleep about accepting money before, damn unique experience tell you what. And it wasn’t a decision that I made by myself, my wife was every bit involved. And yes the same thoughts went through our heads as Saladdin. We are both self made, fiercely independent, and financially secure so why accept?

    In the end we did because a) we knew it wouldn’t cause a hardship on my folks. They are smart and well positioned for their golden age from what I know. b) It was with no attachments or expectations (this was known from all the years of how they have treated me in the past). c) it was more for them than us. The act of giving was… the focus not the dollar value or the card.

    There was 10 years btwn the gifts. I don’t expect any more from them. Never have never will. The things of value they gave me was skills/knowledge on how to achieve my goals. The monetary stuff is just gravy.

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