Now is the time to lay a foundation for all those college- or trade-school-bound kids to achieve financial responsibility. It’s typically not part of any curriculum — so this is up to parents.
Indeed, now that the paper-chased morass involving admissions is pending, you have a captive audience for the challenge of financial responsibility, along with the goal to be achieved as part of higher education — and beyond.
1.) Work as a team, but follow your child’s lead. Kids today are wary of parental criticism and judgment. Encourage them to know that, as a family, money issues can be sorted out as long as everyone understands what is being pursued and why. A good starting point for discussion is this: Regardless of what school you attend, what do you want out of life?
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Many kids, of course, won’t have a clue when they’re just 17 or 18 years old — and we can’t expect them to know. But some teens will. When I asked this of my millennial son in his senior year of high school, he replied, “I want to be an artist — building, or making beautiful things. But I’ll need to make a lot of money to live like we do now.”
That was my “wow” moment as a mom. Young people today are often more observant and savvy than we parents give them credit for, a lot of the time. Similarly, my college-bound niece, whom we knew liked her science classes, answered this question by unexpectedly announcing her career choice as a chemical engineer in the pharmaceutical industry.
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So whether it’s a free-to-be-me dream with a comfortable lifestyle or reaching for that golden ring in a specialized profession, let the kids go for it. The more they reach for the stars, the easier it will be to convince them that financial responsibility is the only way to get there.
2.) Communicate your own financial successes and failures with your child. The higher-education endeavor will end up being one of the biggest investments in their young lives (and yours). As a result, it’s essential that everyone involved be honest. How much will the college essentials cost, including housing, food, clothing, tuition, school supplies, tech, books, transportation, and social activities?
For example, looking cool today with all the latest bells and whistles is almost too hard to resist. And depending on a family’s resources, this usually translates into desires for a glitzy new car, an apartment near campus, fashion makeovers, or the latest and greatest tech devices.
As a parent, you can do wonders by admitting your own failure with finances and how you corrected the shortfall. For example, my cousin co-signed her son’s loan for a new stylish car after considering peer pressure and the need for a reliable vehicle. The problem, however, was the quandary the family suffered as a result of a sudden and expensive dental expenditure not factored into the budget. As a family, they learned how such an unexpected financial pitfall can be avoided — and they asked themselves if the cost of a new car justified their safety and reliability concerns.
The answer was a resounding no. At the moment one pulls out of the dealership, the “new car” becomes a used vehicle that’s lost $5,000 or more in value, not to mention the cost of interest on the car loan, insurance, maintenance, and depreciation over time.
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All of which could have been avoided by retaining the services of a licensed mechanic to thoroughly inspect a more cost-effective used car, making use of public transportation if available, and forgoing commuting altogether by boarding at the dorm for the first few years.
3.) Crunch the numbers. It’s tempting to regard goals like a promising education and a great career as such important investments that any concern for how to pay for them flies out the window. With a family of two or even many more than that, however, parents need to crunch the numbers down to the nub.
Moms and dads can help by using a template of monthly bills to show teens how much it costs to support the family’s lifestyle. It should include a daily record of every penny spent for housing (mortgage or rent), food, medical care per person, insurance (medical, home and car), car loans, transportation, credit card bills, utilities and smart phones, online entertainment, cable TV, dining out, and vacations — as well as fun purchases, from that morning mocha latte to a variety of small or large impulsive purchases.
Kids need to see what the family’s lifestyle has cost and why, for better or worse.
It doesn’t matter if parents have set a pattern of providing an allowance over the years, handing out money on an as-needed basis, or insisting that kids earn every dollar with jobs after school and weekends. Kids need to see what the family’s lifestyle has cost and why — for better or worse.
For example, my best friend was aghast when she did this with her college-bound daughter, whose response was, “Are you kidding me, Mom? No offense, but I can do better than this. Look, if you made your own coffee in the morning, you’d save about $500 a year!” Right. Let them win.
Empowering kids in this way will be its own reward — it’s only natural they’ll want to be smarter and better than us. And we parents know the secret: This is our desire as well.
Moreover, even if you haven’t crunched your monthly numbers lately, you can reap the benefits for the entire family. By taking a cold hard look at the numbers, you may end up in the black for the first time in a long while.
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The point here is plain and simple. It doesn’t take a village to raise and educate a financially responsible adult. It takes caring parents’ time, attention, preparation, shared experiences, encouragement — and love — to let your kids find their own learning curve in this challenging world.
The author, a retired attorney, is a published poet, writer, and columnist based in Arizona.
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