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Speaker 1: This is jam nasion with jes.

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Speaker 2: Well.

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Speaker 1: The bank of mom and Dad is becoming more and

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Speaker 1: more common, with life getting more expensive, interest rates rising,

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Speaker 1: some children expecting their help from their parents to help

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Speaker 1: them get them onto the property market. Is it wise

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Speaker 1: for them? And is it wise for you as the parent?

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Speaker 1: We have our money. Guru Efi Zahas on the line. Hello, Fie,

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Speaker 1: how are you?

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Speaker 2: Good morning, Amanda and Jonesy. I'm very well saying.

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Speaker 1: It's an interesting time because many parents are juggling paying

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Speaker 1: off their own home loans, They're trying to get their

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Speaker 1: kids into the housing market, they're saving for their entirement,

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Speaker 1: and often they're caring for their aging parents. Everything's being

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Speaker 1: sandwiched together.

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Speaker 2: It is an interesting time, and I would suspect that

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Speaker 2: the bank of mom and Dad may be closed through

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Speaker 2: a few people because of what you're just saying. We're

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Speaker 2: in a situation now where a lot of parents are

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Speaker 2: probably looking at these super statements. I mean they're coming

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Speaker 2: through now and they will be feeling the pinch because

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Speaker 2: if you're in what is called a balanced fun which

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Speaker 2: most of these are probably sitting in, it would have

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Speaker 2: a negative return. You don't often see negative returns on

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Speaker 2: super fund. So I think this is the fifty year

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Speaker 2: that has ever happened since the guarantee super guarantee came

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Speaker 2: into playing nineteen ninety two. But nonetheless, it does put

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Speaker 2: a you know, a strain on parents' finances and they're thinking, well,

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Speaker 2: hold it. You know, if I'm going to help these kids,

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Speaker 2: at what cost is this going to come at? And

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Speaker 2: it's interesting to know those parents that do help their children.

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Speaker 2: Some data shows that the average amount that parents do

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Speaker 2: give is a whopping ninety thousand dollars. So we're not

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Speaker 2: talking about small change here. Yeah, and you can't charge

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Speaker 2: your kids interest, can you? So you give them ninety thousand?

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Speaker 2: You can during this can you should get? And actually

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Speaker 2: very clever what you said. Let me say, there are

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Speaker 2: lots of ways you can help your kids. I've got

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Speaker 2: a twenty one year old, I've got a sixteen year old,

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Speaker 2: and let me tell you, I do not want them

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Speaker 2: living with me for the rest of their life. You know,

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Speaker 2: I don't want to thirty year old in the house

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Speaker 2: put it that way, relying on me. But there are

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Speaker 2: a number of things you can do. And I have

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Speaker 2: seen parents actually give loans to their kids, and that

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Speaker 2: they actually pay them some back. It's a loan, and

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Speaker 2: there's a very strategic reason why they do that because

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Speaker 2: often I've seen cases whereby parents have gifted their child

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Speaker 2: a deposit, the child enters into a relationship, the relationship

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Speaker 2: breaks down, and that's all okay. But then what happens

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Speaker 2: is that that equity has to be harved in that

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Speaker 2: relationship they've lost it. So some parents feel if I

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Speaker 2: give a loan, I get some interest back, and they've

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Speaker 2: done it at a very cheap rate, and I get

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Speaker 2: some protection. So it's kind of like, you know how

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Speaker 2: the government, the Albanize government introduced the shared Equity scheme

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Speaker 2: that's coming out in January next year where the government

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Speaker 2: kind of you know, buys the house with you. Some

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Speaker 2: parents are doing that with their kids, Hey, instead of

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Speaker 2: me just you know, gifting new money. I want to

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Speaker 2: go in on this property, so I've got to you know,

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Speaker 2: I've got a stake in it.

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Speaker 1: Yeah, and you can get a tax break on that suretly.

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Speaker 2: Wow, I don't know about a tax boak there Janet

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Speaker 2: where I could see the wheels turning in my head.

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Speaker 2: I'm thinking, well, are you going to make some money

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Speaker 2: out of it? But in the old days, the own

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Speaker 2: department onto us.

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Speaker 1: In the old days, you know, you waited till your

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Speaker 1: parents passed away and if you were lucky, then you've

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Speaker 1: got some money from their estate. Now parents are helping

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Speaker 1: while they're still alive because they figure their kids will

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Speaker 1: never get into the housing market otherwise.

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Speaker 2: Yeah, and what you're talking about there, Amanda, is that

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Speaker 2: they're bringing forward the kid's inheritance. And that's quite common too,

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Speaker 2: and that completely makes sense. So I guess to get

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Speaker 2: them in a property ladder. If you are going to

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Speaker 2: help your kids, can I just say this is what

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Speaker 2: you really need to make sure that you understand. You

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Speaker 2: want to limit the guarantee if you're going to help them,

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Speaker 2: because the way parents help them basically, if they don't

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Speaker 2: have the cash, they then say, hey, to the bank,

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Speaker 2: you can, you know, put a second mortgage on my place,

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Speaker 2: and that way my child doesn't need that deposit. They've

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Speaker 2: got the equity limit that guarantee, so that way you've

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Speaker 2: got some protection. You've got to work on an exit strategy.

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Speaker 2: So you've got to ask your kids some serious questions.

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Speaker 2: How long is it's going to get guarantee going to

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Speaker 2: be on what are you going to do to you know,

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Speaker 2: reduce this risk of me and what insurance have you

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Speaker 2: got because you know what could happen. Worst case scenario,

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Speaker 2: your child may be in some serious accident or lose

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Speaker 2: their job. You then have to as the mum and dad,

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Speaker 2: have to make those repayments. And the other important thing

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Speaker 2: is the family dynamics. If you're going to help one

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Speaker 2: kid and you've got say, four kids, what are you

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Speaker 2: to do with the other three? You know you can't

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Speaker 2: play favorites exactly. Well, if this is all good, I've

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Speaker 2: set up a little bank at home. I've got pens

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Speaker 2: with chains on them.

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Speaker 1: That's about it. Is that as far as as far

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Speaker 1: as I've got Okay, well, I don't want to nick

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Speaker 1: in the piece. I always wanted to get one of

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Speaker 1: those little stamp pads too. It's a little spongy thing

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Speaker 1: and a little peak. That's as far as we've thought.

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Speaker 1: That's as far as we So what you're saying is,

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Speaker 1: if you go to do this, put some thought into

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Speaker 1: it and maybe get some advice.

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Speaker 2: Yeah, you actually do have to get advice, So definitely

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Speaker 2: get independent advice, but do limit your guarantee and make

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Speaker 2: sure your child does have some kind of insurance protection

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Speaker 2: because what will happen is that the able to end

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Speaker 2: up on you. And right now with inflation going up

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Speaker 2: to seven percent, you know, interest rates high. If you'll

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Speaker 2: got a mortgage as well, it is a case, you know.

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Speaker 2: I mean, there's a very good reason why we're in planes.

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Speaker 2: And they say always put the oxygen mask on yourself

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Speaker 2: before you help your kids. You do have to think

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Speaker 2: of your own situation and make it pretty clear. I

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Speaker 2: mean I've made it pretty clear. I'm skiing most of

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Speaker 2: my time. That's spending my kids in here. I'm just

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Speaker 2: blowing it all.

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Speaker 1: Cash out the windows. I drive to get your own oxygen,

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Speaker 1: real money. With f you as our host, the podcast

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Speaker 1: downloaded today on your favorite podcast, Efie.

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Speaker 2: Thank you for joining us, thank you, Good morning Ever