At what age should a young adult do the following?

[mommy_k]

We have young adult child (age 20) who attends college and works part time during school year and full time during the summer.

They live at home and we pay for these things now. How do we introduce the following to encourage financial responsibilty? They seem to have a lot of extra money, and they spend it on fun things and clothes and don’t save either. When should they take on the following? I keep asking them to open a money market or cd account and they have been dragging their feet with this too.

-registering at the parish to receive weekly donation envelopes
-cell phone bill-we have a family plan, but what age should they pay their share of it?
-car insurance

Thanks!

 

[pensmama87]

I started paying car insurance as soon as I was driving, and for my share of the phone plan as soon as I had a phone. So, around 16 and 18 (having a cell phone wasn’t universal when I was a teen - I’m now in my late 20s).

As far as the other, I’m not sure, though I think giving should be a habit started very, very young. My thought is that as long as your child is putting something in the basket, then that’s good, even if it’s not in a registered envelope. I didn’t register with a parish until after I was married, because I moved a lot before then. I still did contribute every week.

By the time I was 20 I basically paid for everything for my day to day expenses. I paid for my own housing and food and schoolbooks. Most of my tuition was by scholarship, and the rest was paid by loans (which I’m paying off now). My parents paid for airfare for me to visit a few times per year. But they’d also been preparing me to live on my own at that age since my early middle school years at least. If your child hasn’t had these expectations of contributing, I would start slowly - maybe say, “OK, in May you will need to begin paying your portion of the cell phone bill. Your contribution will be [x]. In August, you will need to begin paying your portion of the car insurance.” And if they don’t, take them off your plan and make them get their own.

 

[Lorelei12]

You can just tell your son or daughter that he or she is now an adult and going forward, will be responsible for their own car insurance cell phone. You can collect money for their portion, or you could ask that they put those things in their own name (which I think makes more sense).

As for registering at the parish, I wouldn’t demand that. You might encourage it, but I personally wouldn’t require it for my adult child. That’s not the same as asking for money for things you already pay for.

 

[Melancholic]

I think you should start with the most disposable/frivolous expense, such as contributing to the cell phone or cable/internet bill according to usage. That way, if this person would rather have more “spending money”, there is a choice to not consume services like cable etc. Can’t really do that with essentials like car expenses or rent… I know this may not help with your bill if you are on a family plan, but it will help to introduce hard economic choices that adults have to make all the time…

Maybe a money market/cd is too daunting. If the goal is to get them into the habit of saving something, anything, you may find more success with starting simple (every week, put $xx away in a manila envelope we keep in the safe. Let’s make a goal to save $xx by the end of the month/quarter/year.). When I was that age, the simpler the task, the more likely I was to stick with it.

 

[Hoosier_Daddy]

We have young adult child (age 20) who attends college and works part time during school year and full time during the summer.

They live at home and we pay for these things now. How do we introduce the following to encourage financial responsibilty? They seem to have a lot of extra money, and they spend it on fun things and clothes and don’t save either. When should they take on the following? I keep asking them to open a money market or cd account and they have been dragging their feet with this too.

-registering at the parish to receive weekly donation envelopes
-cell phone bill-we have a family plan, but what age should they pay their share of it?
-car insurance

Thanks!

1. Telling a 20 year old to open a money market account is quite out of touch. These things should have been instilled during the teen years. A driver licence, a part time job etc…
2. No one has to register at any parish. They can donate as they see fit, envelopes or not.
3. When a kid has their own phone, they should pay for it.

The reasons you cite is a big reason I advocate attending College away from home. This person should be more financially aware and the only way to do that for some people is not listen to mom and dad drone on about money market accounts, but to personally live their own lives. Do their own taxes, fill out their own forms for school finances, maybe seeing how the world works will cause them to take more of an initiative. But if mom and dad just do everything, why would anyone want to break from that.

I would also suggest that you yourself learn a bit more about modern finances. CDs and MM accounts are not exactly the most current ways to encourage financial savings…

 

[Xantippe]

I would suggest that you read Dave Ramsey and his daughter’s Smart Money Smart Kids and maybe even have your 20-year-old read it if you think that’s a good idea. You can motivate that by explaining that reading it and reporting back is worth one cell phone bill to you. There’s a lot of stuff in there about young adult issues (it’s not just little kids)–he even talks about weddings. Also, maybe do the same cell phone bill thing with attending Financial Peace University or something similar together?

I think it might be a good idea to apologize for dropping the ball on financial stuff, because as Hoosier Daddy points out, this is very late in the game to be changing the rules. How about something like, “I’m sorry I’ve neglected your financial education, which is the stuff that is going to allow you to have an independent adult life. I dropped the ball, but it’s not too late to catch up and that’s what we’re going to do now.”

We’re a ways from where you are (oldest is 12.5), but I’ve put some thought into what we will eventually do. Our kids also have the potential to live at home while going to school, which does mean that the process of turning them into young adults is going to require more conscious effort on all of our parts. There’s a possibility that they may have ridiculously difficult academic programs, in which case we’ll have to play it by ear, but if it’s a normal academic program, I think it’s reasonable to expect a part-time job, paying own cell phone, paying own car insurance and car expenses. I also like the idea of insisting that the adult child living at home save $100-$200 a month as a condition of continuing at home (assuming you don’t need actual rent from them). That money does not need to go into anything fancy like a mutual fund, as I would make it clear to them that it is their young adult starter fund–that’s money that will be needed for their first apartment, moving for their first job, their emergency fund, etc, so it needs to be kept relatively liquid. Within four years of college, $100 or $200 a month should turn into nearly $5k or $10k in savings, which is a very nice sum of money for an early 20-something to have in hand. That kind of money isn’t wealth beyond the dreams of avarice, but it will make everybody’s life easier.

I would also suggest putting some thought into what you’ll do if the kid’s car needs a major repair. Will you pay, will the kid pay out of their young adult savings fund, or will they use their other money? I think one has to be prepared for a $1,000 car repair at all times.

Best wishes!

 

[ChurchSuffering]

I’m 16 and I pay for all those on my own already…

 

[12345678]

I don’t think you need to be apologizing for anything, but I do agree with some of the suggestions.
Of course, I didn’t work jobs that made real money or have a car until I was older, and I was still able to learn fiscal responsibility. I was just careful with my money (I didn’t have much of it).

 

[Mickey_Finn]

We have young adult child (age 20) who attends college and works part time during school year and full time during the summer.

They live at home and we pay for these things now. How do we introduce the following to encourage financial responsibilty? They seem to have a lot of extra money, and they spend it on fun things and clothes and don’t save either. When should they take on the following? I keep asking them to open a money market or cd account and they have been dragging their feet with this too.

-registering at the parish to receive weekly donation envelopes
-cell phone bill-we have a family plan, but what age should they pay their share of it?
-car insurance

Thanks!

20 is about right.

 

[Xantippe]

I don’t think you need to be apologizing for anything, but I do agree with some of the suggestions.

Omitting a child’s financial education is kind of a big deal.

Not irreparable, but it would be more graceful to apologize for forgetting to give a child a financial education earlier at the same time that one is bringing the hammer down in other areas (cell phone and car insurance and insisting on savings and a personal finance course).

I don’t think you can really get away with saying, “I’ve done everything perfectly up to now with parenting you and now I’m going to change X, Y and Z.” If one is making a radical change in household arrangements, either mistakes were being made previously or mistakes are being made now.

 

[Sophie_Lawrence]

I don’t think you need to be apologizing for anything, but I do agree with some of the suggestions.
Of course, I didn’t work jobs that made real money or have a car until I was older, and I was still able to learn fiscal responsibility. I was just careful with my money (I didn’t have much of it).

I agree with you.

I had a bank account on my own at 18. (I don’t think you can have your own bank account before that, it needs to be with a parent.) I had a part time job through college. I had 2 credit cards which I paid in full on time all the time, paid my own bills.

My parents wouldn’t accept rent, but I did pay for household things frequently (groceries, gas in the dad’s car, clothes for my younger sister.

I bought my first car at 25, I think my first cell phone at 27. I paid my bills.

My parents never sat me down and taught me these things. My parents did teach me respect for money as a child. But without a book or flow chart or anything like that.

 

[Xantippe]

I agree with you.

I had a bank account on my own at 18. (I don’t think you can have your own bank account before that, it needs to be with a parent.) I had a part time job through college. I had 2 credit cards which I paid in full on time all the time, paid my own bills.

My parents wouldn’t accept rent, but I did pay for household things frequently (groceries, gas in the dad’s car, clothes for my younger sister.

I bought my first car at 25, I think my first cell phone at 27. I paid my bills.

My parents never sat me down and taught me these things. My parents did teach me respect for money as a child. But without a book or flow chart or anything like that.

A lot of kids (and adults) need a much more explicit financial education. I was just looking this up, and there’s one bankruptcy for approximately every 200 or so men, women and children in the US every year. That’s a lot of bankruptcies.

And OP, if your kid is skittish about parish offerings, how about just insisting that kid donate a certain percentage a month, but letting the kid decide where the donation is going to?

 

[Ignatius]

We have young adult child (age 20) who attends college and works part time during school year and full time during the summer.

They live at home and we pay for these things now. How do we introduce the following to encourage financial responsibilty? They seem to have a lot of extra money, and they spend it on fun things and clothes and don’t save either. When should they take on the following? I keep asking them to open a money market or cd account and they have been dragging their feet with this too.

-registering at the parish to receive weekly donation envelopes
-cell phone bill-we have a family plan, but what age should they pay their share of it?
-car insurance

Thanks!

18 is good, with the exception of car insurance. We wanted to make sure that they kept the car insurance, besides it is less expensive on our policy.
We actually registered them in their parishes so they would begin receiving donation envelopes.

 

[1ke]

-registering at the parish to receive weekly donation envelopes

Many parishes have children’s envelopes. From the time they are small, parents should be teaching them about stewardship appropriate to their level-- time, talent, and treasure. My friends work with their children by having 3 “buckets” for their allowance-- spend, save, and give. This is with 5 year olds and up. They teach their children these skills so that by the time they are adults, this is just how things are.

When should they start receiving adult envelopes? When they are adults-- 18.

-cell phone bill-we have a family plan, but what age should they pay their share of it?

From the beginning. If they have a phone, they should be paying for it.

–car insurance

From the beginning. If they have a car, or usage of a car, they should be paying insurance, fees, gas, maintenance. Or if it’s a family car, some portion of that.

Thanks!

 

[llenadegracia]

I agree with the idea of introducing it as, “In May/whenever…you will be paying _____”. Give some warning, but make it a firm statement.

I started working formally at age 15…it was simply what was expected. My parents never gave us an allowance growing up or money for chores. They simply gave us money as needed which meant we had to verbally request money or save from birthdays if we desired to do/purchase something that cost money. I started babysitting at age 12 (which blows my mind! I was so young!) so I earned some money from that and also from filing papers for an elementary teacher a few hours a week. My brothers earned money from mowing neighbors’ lawns. Before age 15, I very rarely went anywhere without my parents that required more than few dollars so this worked out. When I began working, I soon purchased a cell phone plan. I eventually bought a car and also paid for my own gas and insurance.

My parents were upfront about these financial expectations…they let us know we were responsible for cell phone bills, cars, gas, insurance, clothing, food, college and whatever else we may incur with the exception of medical insurance. I am 21 and my parents graciously still pay my medical insurance (I am on their plan…medical insurance through my college doesn’t offer nearly the coverage) which is honestly so kind of them!! We also all are on the same cell phone plan, but we each pay our share…it is cheaper for us to be on the same plan.

With all the said…I personally am a huge advocate for teenagers getting part-time work. I like that I began working at age 15. A lot of it was simply as a family we needed the extra income I earned to cover my expenses. I learned to save money pretty quick because at age 15, I knew the only way I ever was going to get a car or go to college was if I saved my money!! It taught me huge financial responsibility.

Anyway…I think now is a good time for your child to start paying for these expenses. Just let them know what to expect and it really all should be ok.

 

[Xantippe]

I agree with the idea of introducing it as, “In May/whenever…you will be paying _____”. Give some warning, but make it a firm statement.

I started working formally at age 15…it was simply what was expected. My parents never gave us an allowance growing up or money for chores. They simply gave us money as needed which meant we had to verbally request money or save from birthdays if we desired to do/purchase something that cost money. I started babysitting at age 12 (which blows my mind! I was so young!) so I earned some money from that and also from filing papers for an elementary teacher a few hours a week. My brothers earned money from mowing neighbors’ lawns. Before age 15, I very rarely went anywhere without my parents that required more than few dollars so this worked out. When I began working, I soon purchased a cell phone plan. I eventually bought a car and also paid for my own gas and insurance.

My parents were upfront about these financial expectations…they let us know we were responsible for cell phone bills, cars, gas, insurance, clothing, food, college and whatever else we may incur with the exception of medical insurance. I am 21 and my parents graciously still pay my medical insurance (I am on their plan…medical insurance through my college doesn’t offer nearly the coverage) which is honestly so kind of them!! We also all are on the same cell phone plan, but we each pay our share…it is cheaper for us to be on the same plan.

With all the said…I personally am a huge advocate for teenagers getting part-time work. I like that I began working at age 15. A lot of it was simply as a family we needed the extra income I earned to cover my expenses. I learned to save money pretty quick because at age 15, I knew the only way I ever was going to get a car or go to college was if I saved my money!! It taught me huge financial responsibility.

Anyway…I think now is a good time for your child to start paying for these expenses. Just let them know what to expect and it really all should be ok.

We also never had allowances. My dad said, “I’ll give you twice what I got as a kid.” Well, dad got nothing when he was a kid…

I was a teenager in pre-cell phone days, so no cell phone. Also, I didn’t have a car until I was a 30-something married lady with two kids, so no car insurance help when I was a young adult. (My mom had cancer the year that I should have been doing driver’s ed, so that fell through the cracks.) I always worked on the farm and got paid once in a while for that, but my first steady income was working in the new family store when I was a college student. At that point, I think I was paying for most of my clothes. I paid for a large chunk of my last year of college with summer earnings (so sad to write that big check!). By 20, I was done with college, had my first real job (Peace Corps) and was gone from the nest. (I did work for my family again the summer between returning from Peace Corps and starting grad school, but that was maybe two months total, and after that I was gone for good.)

Dave Ramsey encourages doing a matching program for kids’ first cars (but to put a cap on what you will contribute upfront). He and his daughter talk about this in detail in their Smart Money, Smart Kids book. I think that’s a good system, if you have the money to spare.

Oh, and I like the idea of having the start date for paying for insurance and cell phone be sometime this summer. July 1? That way, they have the advantage of being able to plan ahead and the advantage of bigger summer earnings.

 

[DCNBILL]

-registering at the parish to receive weekly donation envelopes - After they finish school and they get a full time job and you either have them pay rent or get their own place.
-cell phone bill-we have a family plan, but what age should they pay their share of it? - Now prorated from when they got the part time job.
-car insurance - After they finish school and they get a full time job and you either have them pay rent or get their own place.

Thanks!

 

[12345678]

Omitting a child’s financial education is kind of a big deal.

Not irreparable, but it would be more graceful to apologize for forgetting to give a child a financial education earlier at the same time that one is bringing the hammer down in other areas (cell phone and car insurance and insisting on savings and a personal finance course).

I don’t think you can really get away with saying, “I’ve done everything perfectly up to now with parenting you and now I’m going to change X, Y and Z.” If one is making a radical change in household arrangements, either mistakes were being made previously or mistakes are being made now.

I have yet to meet a parent that has done parenting perfectly, and I don’t see why parents would need to apologize for these things the OP mentioned (nor do parents need to keep tabs on all things they could have done better and apologize for not having learned or thought of them sooner). It’s ok to make adjustments in your parenting when you see fit, and explain why you are doing the changes, but you don’t need to apologize. There may be some situations in which parents may need to apologize to their kids, but this does not seem like one to me. As far as I can see, the OP wasn’t purposefully avoiding any type of fiscal responsibility lessons in order to purposefully leave her kids ignorant in this area. Even kids who do receive these lessons can squander their money. There are different ways to teach people about financial responsibility, and we do not know if the OP has handled other things in ways that foster this. It seems like at least the OP requires the child to pay for the “fun” things he/she does.

 

[Xantippe]

I have yet to meet a parent that has done parenting perfectly, and I don’t see why parents would need to apologize for these things the OP mentioned (nor do parents need to keep tabs on all things they could have done better and apologize for not having learned or thought of them sooner).

**When you’re about to change the rules of the game in a big way, it’s a nice thing to do.

Also, apologizing to kids when we do wrong or make mistakes is a good habit for parents. Among other things, it sets a good example for little and big kids.

There are so many people who have trouble choking out an “I’m sorry.” I have to confess to being one of them. I don’t know that my parents ever apologized to me.
**

It’s ok to make adjustments in your parenting when you see fit, and explain why you are doing the changes, but you don’t need to apologize. There may be some situations in which parents may need to apologize to their kids, but this does not seem like one to me.

**Dave Ramsey (the personal finance guy) often suggests that the person that is making financial changes apologize for previous mistakes. **

As far as I can see, the OP wasn’t purposefully avoiding any type of fiscal responsibility lessons in order to purposefully leave her kids ignorant in this area. Even kids who do receive these lessons can squander their money. There are different ways to teach people about financial responsibility, and we do not know if the OP has handled other things in ways that foster this. It seems like at least the OP requires the child to pay for the “fun” things he/she does.

It can’t possibly hurt and it could help.

 

[12345678]

It can’t possibly hurt and it could help.

I guess I will agree to disagree. I do agree that parents should apologize when an apology is needed. I never said anything to contradict this. I think it is setting a good example and I do it with my children. I just don’t think we can assume that it is needed in this case.