Settlement for 5yo. What would you do?

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Use it to pay premiums on a whole life insurance policy that will continue to grow in value over her life and represent a wonderful tax-free nest egg for your grandchildren.
 
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Bumming across Europe, is probably not the most forward-thinking use of 30 grand, but I’d still place it in the category of a positive, learning experience. I’m more concerned about her smoking it or using it as an excuse to not finish high school.
 
NO 18 year old needs that lump sum, mamma is right.

I’d even say keep it QT until she is 23.
 
She will need the money for college. I would try to set it up to where she only gets money between 18 and 23 for educational expenses. It will likely double in value between now and then, with inflation denting it a little. So image 50K, today. It’s not a great amount. that will pay for two years at a state university.
If it can’t be distributed to her restricted, I would let her get it when she is 18 and teach her now that it’s just for college.

Back in the day, I had 17K in the bank ( similiar amount after inflation), under my control when I graduated from high school ( jobs and some small business). It was all for college. I didn’t go out and blow it, never crossed my mind. Just raise her right. We are not talking about large six or seven figure numbers here.
 
The OP doesn’t have the right to make this decision for her daughter, ie the funds should be focused on the future next generation. Morally and legally, she is a custodian of the money until her daughter is an adult.
Besides, a good education will provide a much better results for future grandkids than a life insurance policy funded with only 33k.
 
My father died when I was 19. I blew through a sizable inheritance in a short amount of time.

I’d spread it out if I were you…
 
Allegra said:
Bumming across Europe, is probably not the most forward-thinking use of 30 grand, but I’d still place it in the category of a positive, learning experience. I’m more concerned about her smoking it or using it as an excuse to not finish high school.
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I agree. There are adults who have done it and it wasn’t “bumming” at all. It was a privileged thing to be able to do, but it wasn’t a waste of time or money.

I think that those destined to self-medicate with drugs or alcohol are going to find a way to do it (and to waste their potential, financial resources and positions of trust accordingly) until they address whatever it is that they’re self-medicating. Really, people don’t set out to become addicts and healthy people would rather enjoy themselves socially without losing control of themselves or making spectacles of themselves. A healthy person doesn’t need that. There are no guarantees, but the best way to keep her from doing that is to raise her with ways to face up to the pains of life and cope with them in a healthy way and to realize that a happy life doesn’t involve trying to be someone other people look at with envy. It’s about being able to give and share love, joy, appreciation, gratitude, and so on.

Based on my children and their friends, I’d say one of the ways to do that is to encourage her to get to the point where she feels she is self-propelled and supported by you as an adult by the time she leaves high school. As the saying goes, “Raise the child like you prune a tree–find out what he has a bent for and remove what interferes.”

We told our sons when they were ten years old that they weren’t men yet, but that manhood didn’t come with the calendar flipping. It takes skills and a self-image that one has to start practicing when they’re ten, so that when they’re 16 or 18 or 21 they can do it. It took a lot of letting go and letting them make their own decisions, but it worked out pretty well.

When our sons were in about 4th grade, I told them that I was happy to hug them in public but that they were getting to be men and ought to decide for themselves when to hug their mom rather than having her decide for them. We told them that there were things in school that they were required to do not because we were going to force them to go to college but because we were requiring them to put in the work to give themselves as many choices as their ability would allow when the time came. When something wasn’t a requirement, we sometimes tried to talk them into it, but we rarely put the pressure on for them to do it. When they were in sports, they had to go to every practice and game and help the coaches set up and put away if they made the commitment, but they decided whether or not to make the commitment. We let their coaches do the coaching and encouraged our sons to do as much of the communication with the coach as possible. (An exception was when we deemed them too cool to tell the coach what the coach ought to know, such as telling him on the side about an injury one of our sons was nursing and trying not to let on about. Even then, we told him discreetly and then let go)
 
Hoosier-Daddy said:
My father died when I was 19. I blew through a sizable inheritance in a short amount of time.

I’d spread it out if I were you…
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You were going through processing your father’s death, though. That’s a lot for a 19 year old to go through. I wouldn’t expect the greatest decision-making under those circumstances, even if you had been prepared to handle money by the time you were that age (something most people don’t get).

My siblings, my cousins and I got an early inheritance in the ballpark of what the OP is talking about when I was in high school. My youngest brother would have been about 7 or 8 years old, and he knew he was getting the money when he got older. Since our grandmother was quite alive and there to see how we spent it, I don’t think any of us “blew through it.” My parents put my brother’s portion in a vanilla stock mutual fund until he was 18. He didn’t blow through it. He worked his way through college and used some of it so he could graduate in four years. He had some leftover, which he used as a starting fund on a downpayment on a house. None of us was working through the grief of losing a parent, though. We were spending money that had been given to us in the expectation that we’d use it for the kind of thing that our deceased grandfather would approve of (with Grandma watching).
 
The problem is that 33K is not really sizable and college tuition bills tend to come in lump sums once a semester. We are not talking about a sum to where a kid won’t think they have to work.

Again, raise the kid to be responsible and value an education. I had a daughter who worked all thru high school a lit of hours, and actually had a good management position before she was 17. Balance it all with school. She recently told me she had 25K in the bank when she graduated from high school. I had no idea, the other kids only had saved up 10 or 15 k. That was 10 years ago, probably similiar to 33K a year. She didn’t blow it.
 
tafan2 said:
The problem is that 33K is not really sizable and college tuition bills tend to come in lump sums once a semester. We are not talking about a sum to where a kid won’t think they have to work.

Again, raise the kid to be responsible and value an education. I had a daughter who worked all thru high school a lit of hours, and actually had a good management position before she was 17. Balance it all with school. She recently told me she had 25K in the bank when she graduated from high school. I had no idea, the other kids only had saved up 10 or 15 k. That was 10 years ago, probably similiar to 33K a year. She didn’t blow it.
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Exactly. If the money is invested and explained with, “If you also work, there is a chance you’ll get out of college with no student loans. You have no idea how much easier it is to start adult life with a college education and no debts” and the student has actually had a job and knows how much work it takes to save money before she ever sees a dollar of her investments, she’s not likely to blow it.
 
I pray that by the time this little one wants to go to college that the practice of strapping kids with mountains of debt is gone. That tuition is once again do-able by simply working.
 
TheLittleLady said:
I pray that by the time this little one wants to go to college that the practice of strapping kids with mountains of debt is gone. That tuition is once again do-able by simply working.
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As the saying goes, “Pray to God, but row away from the rocks.”

The message that it is a huge advantage to be starting adult life with a skill that suits one’s calling and with no debt or even a nest egg will not wear out, at any rate. Societal support for higher education goes up and down, but I think that the next generation of students are being more careful educational consumers, so even that much will help.
 
I’m not even sure I approve of college anymore, since so many of them are run by atheists pushing their agenda. But there are still good Catholic colleges.
I’m glad she got a settlement; I recall the difficult time you went through regarding her health.
Certainly, small payments over time would be better. It will give her time to mature.
 
I mean, based on what went on at colleges in “the old days” when I was a student, and even when my parents were students, I’m amazed “atheist agendas” are what it takes to get Catholic parents to raise an eyebrow. I know women at my parish who brag about taking trips to try and get their 18yo into a fraternity where they are going to do absolutely nothing but drink themselves stupid, damage property, bully one another, and try and get into girls’ pants, and yet what they are worried about is an “atheist agenda”. Well, whatever. Not attending college closes the door on a whole lot of opportunities. If college isn’t in her plans, that’s fine, and if it is, I will try my best to guide her into a path that isn’t going to waste her time and en-cripple her in debt, but I’m not about to discourage her from finishing her education. Also, I predict that within the next decade, campus centered colleges will probably be on the decline anyway. I’m literally about to finish an advanced degree and I’ve only stepped foot on the campus three times to collect books. It’s all done online now.
 
There were no fraternities or sororities at my school in the '60s. I worry about the atheist agenda because I hear frequently of kids who’ve lost their faith at school, and it certainly happened to mine. Of course it might have happened anyway.
Of course online is better. Congratulations on your degree.
 
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