PREVIOUS: Teaching Financial Responsibility ~ The Basics
Teaching Financial Responsibility: Almost Independent (ages 16-17)
Your children, now adults, have learned in principle
all that you have taught them.
It is up to them and them alone
to put this knowledge into practice on a daily basis.
If they live within their means,
spend intentionally and frugally,
save as much as possible,
stay out of debt,
and invest wisely,
they have all the groundwork to be financially stable.
It is important, whatever future they pursue,
that they manage their own finances one hundred percent.
These young adults control their income, and they have to pay their own bills. They receive and are responsible for their own bank account(s) and credit card statements. They receive the benefits of any interest, dividends, and credit card cash awards, but they also suffer the consequences of financial mismanagement.
Financially rescuing your adult children when they make bad money choices
deprives them of learning from their mistakes.
Logical consequences are the best teachers.
Relegating full responsibility for financial decisions and management to your adult children does not mean the parents have to abandon them. We still offered support in indirect ways.
For example, our adult children attending college stayed on our medical and dental insurance, they and their car stayed on our auto insurance policy, and their cell phone service also stayed on our account.
It was much less expensive to have an additional vehicle and driver, and an additional phone line on our policies than for them to get an individual policy for these things with just one person.
They did, however, pay their portion of these bills. They are adults, and if they wanted to drive a car and have a phone, they needed to cover these costs.
One other way we supported our adult children was by providing a college fund, all of which were set up when they were very young. Their grandparents, too, put money into a college fund for them.
These funds if managed carefully using the principles with which they had been raised would cover the essentials of tuition, fees, and lodging, especially since they already had several semesters of college credit (see Raising Scholars: Spreading Wings).
The year before they went to the university, the scholars were made aware of all of these funds. The adult university-bound children researched the costs of their higher education and made a rough budget. If they managed their funds well, they would have enough for the basics (lodging, food, tuition, fees, books). If they wasted their money, it would run out. They also knew they would have to make sacrifices, and pursue money from other places (e.g., scholarships, part-time jobs) to cover extra expenditures. We as parents wanted to support their higher learning but also wanted them to be financially responsible.
If the adult children chose not to pursue higher education, these college funds were not available to them as these funds could only be used for education.
Of course, we parents were always available for emotional support, encouragement, and advice if asked. We also tried to be generous with Christmas and birthday gifts to help ease their burden.
This part of Teaching Financial Responsibility is evolving as two of our three our children are now in college. They are realizing first-hand the importance of all those principles with which they were raised. They are working very hard and making difficult sacrifices to stay out of debt and not deplete their savings account. They are motivated to look for ways to earn money whenever possible. They are also observing the stresses befalling coworkers and fellow students who haven’t learned these lifelong financial management skills and who seem to spend without any concept of intentionality or limits.
Now, life is their teacher.