Australians are living up to 30 years longer.  But that means they need more money to live on.

Which leave them with a difficult dilemma: the kids inheritance, or their own lifestyle in retirement.

Some are choosing not to leave their children any inheritance. Instead, they are leaving their money to their favourite charities or spending it before they pass away.

Amongst those who won’t leave their kids an inheritance is billionaire Warren Buffet.

He said: “I’m not an enthusiast for dynastic wealth, particularly when six billion others have much poorer hands than we do in life.” Instead, he will donate 85% of his fortune to five charitable organisations including the Bill and Melinda Gates Foundation. The remaining 15% will go to his kids.

“They’ve known all along my views on inherited wealth and share them. They have money that most people dream of.”

Microsoft founder, Bill Gates has said he’ll leave his three children $10 million each out of his $80 billion fortune. “I definitely think leaving kids massive amounts of money is not a favour to them…Some people may disagree with this but Melinda and I feel good about it.”

But what about the average person?

Some parents are concerned that if they leave their kids an inheritance they won’t bother studying or working as hard.

The average inheritance in Australia is approximately $500,000 based on Victorian figures, however, that’s likely to be what it is across the country. One fifth of inheritances sit at $1 million and 7% are valued at over $2 million. This is according to figures released by the Grattan Institute in 2019.

Some parents however are leaving their kids absolutely nothing and instead are spending the cash themselves. These parents are known as the SKI generation, and some of them are spending it to enjoy their final years.

Karlene* who has a ten-year-old daughter said that her daughter will automatically inherit what’s left of her estate when she passes away. Her daughter is still a young child, but she teaches her to think about what she wants to buy and to not spend all of her money because if she does then she won’t have money for the other things that she wants.

Karlene added: “If she spends the money I point out that she can’t buy something else because she has spent all her money on stuff she didn’t want because she had money.

“I will leave her the inheritance because she is my heir – I’m not concerned with building a nest egg to leave her. But it will be nice to give her something.”

She will set her daughter up for life by “probably paying for her university. She will probably live with me for free but if I moved somewhere remote I would pay for her accommodation. I would expect her to get a job when she’s 16 or 18 to save or pay for extras.”

“I will buy her a car because it’s an expensive thing for a young person and a mark of independence so getting her one that is safe and reliable would be important, but if she wants expensive sunglasses, etc she can buy them with the money she earns.”

Melanie*, who does not currently have kids said that she will leave them an inheritance. “Life is really hard to succeed these days and I would want to leave them something that would help them. Of course, I’d want to teach them the value of hard work and working to achieve things but I think it would be the right thing to do to leave them something that would help further themselves.

“My assets when I pass one day have to go somewhere….so I’d rather it be my own kids to help them.”

Beth, who has two grown boys who’ve graduated from university won’t be leaving their kids an inheritance.

“It won’t be possible. Currently, they are better off than I am in many respects, they are earning well and will continue to do so. In their working lifetime, they will become wealthier than I ever will be. I will need everything I have to house myself and pay for my care until I die, plus some. They may even have to help with my care financially.

“Even as teenagers they never asked us to buy them anything. They knew they had to work and save up for what they wanted.

“They even had to fund their way through university so they got jobs and only borrowed a little bit of money to fund the rest of their studies.

“Both came out of university with very small student loans of less than $3000 each. As a graduation gift, their grandparents – very unexpectedly by any of us – paid off their loans.

“They also had savings and share portfolios – all their own money, that they drew down to fill any gaps and pay for living expenses. They did qualify for student living allowances as our income was below the threshold.”

To earn money when they were children, Beth gave them pocket money in return for completing housework. It was like a pay cheque where he was paid weekly or fortnightly into his bank account.

“The younger one was a bit lazier and needed incentives, so for him we set up a ‘pay for performance’ chart and put a price on various household chores – 50c for unloading the dishwasher, 20c for putting the wheelie bin out, $1.00 for feeding the cat every day for a week, 50c for making his bed, etc. He could fill out the chart and see how much money he was earning”.

Paul*, a business owner from Melbourne will leave his young son an inheritance and will also give him enough money for a deposit for his first home.

“I’ll give him a modest deposit of $300,000 but I will give that to him before I die. Then he can have the inheritance as well. That’s a foot in the door,” he added.

He said: “It’s important to have somewhere to live. I won’t leave him the business as quite frankly I will be done with it by then and I want him to pursue whatever makes him happy”.

He will teach him about money by teaching him to, “live simply and invest wisely and things like that.”

Tanya*, who has a newborn wasn’t sure what the future will hold, but said, “I’d love to leave my kids something if we ever get ahead in our finances. I’ll leave them everything and anything I can to help them be good people and have a happy life.”

Callum* plans to leave his children an inheritance.

“I think it’s an obligation to give my child an inheritance as my parents did before me, we should do the same for your child. You bring a child into the world.

“It is your responsibility in all ways to include everything handed down to them”.

Finder’s Taylor Blackburn provided statistics stating that Aussie kids receive $2 billion in pocket money each year.

Finder money expert Alison Banney says that “increasing your child’s weekly allowance is just like a salary increase. As they get older and start taking on more household responsibilities, this is a great way to reward them.”

The Finder app can also help children watch their savings grow as they get older, which in turn teaches them great budgeting skills.

Finder’s Parenting Report 2021, which surveyed 1,033 parents, found that 39% of children have had to go without luxuries and that 20% of families were not going on holidays and 16% were unable to fund extracurricular activities for their children.

Alarmingly, 8% said their children have had to go without food.

It may not be that parents don’t want to leave their children an inheritance. It may be that they can’t afford to.

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