College grads and money worries

Parent Cafe
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<p>I’ve had this conversation with several parents of recent grads and was wondering if we’re just an anomaly, or if this is becoming the norm.</p>

<p>When I first graduated college, I lived paycheck to paycheck. I spent very little on entertainment, and travel was something that rarely happened. When H and I got married, he was in grad school, and we had D1 when he was just starting his fourth year. We had D2 when he was doing a post-doc. In fact, we were so poor that we qualified for WIC. Forget putting any money aside for future ‘anything’; our credit card (at least we were smart and only had one major credit card) was often close to the max (it took us years to pay off). Again, any expense, entertainment-related was rare. I shopped garage sales for baby needs/clothes. </p>

<p>Fast forward 23 years later, and D1 is in her first post-college job. She makes enough to buy herself new clothes every now and then, eat out every now and then, and enjoy some minimal travel. AND she is able to put aside a small amount every month into a mutual fund (not much, but it is something). She pays off her credit card every month and only has one. She belongs to a decent gym. No college debt to pay off.</p>

<p>But she always seems to be complaining about money, or her lack of. I look at her lifestyle and think, “What I would give to have had the discretionary income at her age that she has.” And to have already started a savings plan. She has more in savings at this point than we did until we were in our early 30s. </p>

<p>Like I’ve said, I’ve spoken with other parents whose journey after college was similar to ours (quite a bit of debt and little income), and whose children now seem to be doing much better as new grads than they did… but they, too, are always talking about their money woes. </p>

<p>Granted their cushions are not huge by any means, but they have a cushion. Sometimes I just wish these kids would realize how good they have it!</p>

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<p>I think one of the problems with this generation of new grads is that they see SO much money all around them. My son had some friends at college who were incredibly wealthy- I mean beyond belief wealthy. At one point he wrote something referring to his “modest upbringing” which irritated my much more sensible daughter to no end. These kids are seeing peers selling companies at age 19, starting facebook etc. It’s easy for them to be dissatisfied with what we would have considered a generous salary and nice surroundings.<br>
The media doesn’t help with all this…</p>

3

<p>MOWC - yes, part of what could be D1’s problem is the plethora of wealthy families she has been exposed to at her private college (which she was able to attend, basically because of very generous merit scholarship). We are by no means poor, but compared to many of her friends, we are solid middle class. D2, at an LAC, also has met people with wealth beyond what she ever knew in high school. And again, she is there, in part, due to generous merit aid. But she hasn’t graduated yet, so I don’t know how her outlook on life after graduation will unfold yet. However, her major is a known, high unemployment field, so for years she has known she would never have much and began shopping at thrift stores while in high school. </p>

<p>Back to our own experience, I think we only had a savings account because it was required to open a checking account at the student credit union! </p>

<p>D1 has friends who make more than she does, and less than she does; she seems to obsess with the ones who make more and then criticize the budgeting choices of those who make less than she does (she has two roommates… one makes more than her, one makes less). Like I said, she is so much more responsible than we were at her age, financially. But she worries more about her money (and as I’m learning, she’s not the only one in her peer group).</p>

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<p>Why not? Was she able to attend college on a full ride scholarship? (if so, kudos to her!) Or were you one of those parents who didn’t want to see your daughter struggle the same way you did, so you took on the full burden of paying whatever was owed to the college so she wouldn’t have to take loans? </p>

<p>If the “no loans” was because she had generous parents – then she has been very lucky in many respects, but her perceptions may be skewed because she hasn’t had to struggle. I mean, when I visited my daughter she had an old bank statement tacked to her wall where the balance was something like $30. I asked her why that was displayed, and she said it was a reminder to herself how low she had gotten, and to never let her balance get that low again. I had to laugh and tell her that I’d been even lower than that in my lifetime. But the point is… since my d. did have to take loans and carry much of the burden of supporting herself through college, she was that much more appreciative of what she did have. </p>

<p>If your d. had a full ride in college – and now as a grad has a job that pays a salary sufficient to meet her needs – then she has done very well. As a parent I think you should be proud of her and let your d. know that, and perhaps remind her of her good fortune in positive ways, complimenting her for her money-management skills and then at the same time bringing up some facts (unemployment figures, etc.) about people less fortunate than herself.</p>

<p>You might want to cultivate a shared interest in charitable giving. My daughter joined Kiva and invited me – I was already a member so I shared my Kiva experience and then we had fun talking about where we were allocating our funds. (Kiva is a microfinancing web site – you choose to lend amounts in $25 increments to the worthy third-world small business owner of your choice, then relend the money to someone else after you get repaid. They have social networking tools so you can see where your friends are lending and see a running total of how much money you’ve lent out over time.)</p>

<p>A person does not need to be rich to give. My d. joined Kiva when she was still in school, worrying about making ends meet, and carrying about a balance of several thousand dollars on her credit card – but she could spare $25 to help someone else. When my son was working for a little more than $20K a year in his early 20’s, he and his co-workers all signed up with Save the Children for automated $25 monthly withdrawals from their pay checks. I would have never pushed my kids to donate money when their finances were so tight – but I do think that donating to a charity is one way that a person can remind themselves of how much better off they are than others. </p>

<p>I think that if you shift the focus to *giving<a href=“rather%20than%20%5Bi%5Dgetting%5B/i%5D”>/i</a> – it serves as a good reminder as to how fortunate even those with modest income are – compared to many others throughout the world – and it also creates a line of communication with your kid in which the money gripes will start to seem trivial. If conversations about money with you inevitably turn to the subject of charitable giving… either your d. will start to think more about others or she will start to avoid talking about money with you.</p>

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<p>Our son came from a “modest upbringing” and worked his behind off to earn his education, both academically and athletically. He is very frugal, earns in the mid five figures and continues to go to school (he earned his BS in 2008, has now finished aviation school and is working on his masters while working full-time). He is paying for it out of pocket. He actually bemoans the fact that he will not “have it as hard” as we did economically and he looks at his peers and is very grateful to be in the position he is in with no student debt. He has a very healthy savings account and has begun investing, as well.</p>

<p>He has been giving to a charity run by Penny Arcade since he was an undergrad. This charity buys and distributes video games and consoles for pediatric units of hospitals. I thought it was great that he was giving, and that he found something he was so interested in to give to. He has done volunteer work for schools and churches when he has the time and is generally a pretty nice guy.</p>

<p>I believe that most of the young people I have been around are much more focused on relationships and social networking than we were. We had to keep our heads down and WORK, sometimes looking under couch cushions for change so that we could buy milk when our kid was little!</p>

<p>Now I just hope he meets a nice girl with similar values… :)</p>

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<p>I should have clarified that my parents also paid for my education completely. It was H who had some debt from college (his parents were much more capable of paying for his college than mine were), and a little more from post-grad. But we were married when it was time to pay it back, so I consider it our debt. I made very little money in my first job out of school; certainly not enough to put anything aside. </p>

<p>Believe me, she has struggled. She spent the summer after freshman year recovering from a relapse of mono and could get no job; earned no money at all that summer, which was painful.</p>

<p>I don’t want this to turn into a thread about whether or not parents should or shouldn’t pay for their kids’ college. H and I placed a high value on education and our kids knew from an early age that we would support them for four years of college. They both worked very hard in high school, which qualified them for the merit aid scholarships they received (basically bringing down the cost of tuition to that of - or a little less - than what our state U. would have cost. By working hard and getting college credit for APs, they could have saved us tuition money in the end. Both could have graduated early, but with their merit aid their tuition costs were reasonable, so we encouraged them to stay for the entire four years. </p>

<p>It took D1 over a year and a half to land her first full-time, permanent job with benefits, and she’s only been at it for four months, so she is still in the process of learning how to manage her own money in the adult world, where all of her friends are also responsible, professionally employed people. I feel the best way for her to learn how to handle her finances is to do it on the job. I’m not going to tell her what to do with her money as long as she’s not asking us for any. At almost 24, the time has passed to get involved in her financial affairs.</p>

<p>When we were dirt poor, and had no money to give to charities, I ‘gave’ back in more visible ways, meaning I did a lot of volunteering for organizations that I felt passionate about. Somehow it took away the sting of not being able to contribute more money to the places I wanted to give. </p>

<p>We missed many weddings of good friends when we were young because we had made the decision that H’s Ph.D. was a priority. This took us over 1000 miles away from both of our families and all of our friends, and we did not have the money to travel to these events. But it was our choice at the time and we knew the financial hardships wouldn’t be forever. I do think we were overly optimistic about how quickly we would climb out of that hole, though. </p>

<p>I guess we never considered it a burden to provide for our kids’ education; it was our #1 priority. We have placed very little restrictions on how they use the opportunity. It’s basically four years for them to take advantage of every opportunity that their respective school gives them. If they screw it up, then they have to deal with the consequences after graduation. The only caveat I will add into the equation is the current economic situation. We had always told them that the gravy train would end when college ended, but times ended up being much more complicated at that time, than when we preached it. </p>

<p>In the end, I am aware (and thankful) that both of my very bright daughters will find success and happiness.</p>

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<p>But you asked our feedback and/or advice about kids griping about money. So I offered my perspective. My kids don’t really complain about money to me. Quite frankly, I would expect more complaining from my son, who at age 27 has a wife and child to support while employed at a nonprofit. Surely things must be tight for him – but the only thing close to a gripe that I’ve heard is along the lines of a few hints as to desired baby gifts. </p>

<p>My daughter is more likely to mention financial problems, but more along the lines of worries about the future than current complaints. But I haven’t heard any money complaints at all since she lined up her post-college job and started working. Since she is living and working in NY, it is a given that her salary will not be enough to support items such as her own apartment --at the moment she is staying with a friend and has to commute more than an hour each way on the subway every day. </p>

<p>So I don’t really share the experience you are reporting: gripes about money, once the kids are employed full time. When my d. was in school, then she was more likely to share her worries – and she did ask for my help to pay for dental surgery that wasn’t covered by insurance. </p>

<p>My suggestion about charitable giving is simply that I think that when you are thinking about the needs of people who are far less fortunate, it changes perspective somewhat. If I am wishing I had enough money to eat out more often, if instead of dithering away my hard earned cash on overpriced lattes at Starbucks, I write a check for $20 to Feeding America, then I am reminded how lucky I am to have a kitchen pantry filled with nutritious food.</p>

<p>My point about the loans and money struggles in the past is simply that I think my d. is very grateful to simply have a job. Two months ago she was worried about whether she would even be able to afford basic living expenses post-college, what to do about health insurance, and her student loan debt loomed like a monstrous shadow over everything. The job she has comes with modest pay and great benefits, including an annual payment to help reduce the student loans – so my kid is delighted. She isn’t in a position to be envious of the privileged students from her college – she had to face and conquer that particular demon back in freshman year when the rich kids were receiving generous allowances from home, and she had to manage with her earnings from work-study. </p>

<p>I’m not trying to make this a debate over parenting choices. If you can afford to put your kids through school without needing to take on loans, that’s fine. But then in the end when you wonder why your college grad kid is griping – when to your eyes she has it a lot better than you did— I don’t really see it as a sign of the times. I see it as one of individual perspective. My own d. is painfully aware of the tight employment market. But I think she’s sees her basket as mostly full rather than somewhat empty, precisely because she is painfully aware of how much emptier it could be.</p>

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<p>Perhaps my thread title was more appropriate than the wording in my post. She worries about money. It seems (to me, but of course I have the perspective of an adult) she over thinks every little expenditure. She knows she’s very fortunate to have a job with benefits, but sometimes I wonder at what salary would she stop worrying. The ‘complaining’ is more along the lines of venting. She doesn’t necessarily expect us to do anything about it, so I can listen to her concerns, and tell her again and again that she’ll be fine.</p>

<p>If I had my wishes, I’d wish she could relax a bit more.</p>

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<p>Good for you, calmom. That’s not MY kid’s world. He’s not thinking about the needs of those less fortunate. Someday maybe. Not now. He’s starting a new job in a new city and off the parental payroll. He’s thinking about himself and his new life and how he’s going to pay rent, cell phone bill and have a social life in the style to which he has become accustomed. Yep- we funded the 4 years of college for both our kids (with the help of some educational trusts) and at graduation I could tell they knew what we had done for them.</p>

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<ol>
<li><p>God Bless America. Over the last 2 generations, the country has progressed enormously in wealth, and the perceived acceptable living standards of the middle class have advanced in lockstep.</p></li>
<li><p>Half of the complaining/venting is relative to peers. The neighbor flaunts a sports car and Prada bags and gets private school and tennis lessons for the kids. Colleagues at work buy rounds of drinks at Happy Hour so you feel compelled to reciprocate / pay up sometimes. They may not be able to support that behavior financially, but it affects your behavior and mentality.</p></li>
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<p>I don’t think D1 would give up the life style she has grown accustom to. She got her first paycheck last Fri. I believe she went up to Henri Bendel to shop today. At the same time, I don’t think she would complain or ask me for money either. Before she left to move to NYC, she had a spreadsheet open to figure out how much she would need every week. She asked me how much she should put aside for dry cleaning and food.</p>

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<p>Well, maybe the issue is the lifestyle they have grown accustomed to. My d is giving up the studio apartment her college provided, but she’s been accustomed to doing a lot of scrounging.</p>

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<p>I said SOCIAL LIFE in the style to which he has become accustomed. That’s HIS nickle and has been all through college. He worked at a law firm to pay for that!</p>

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<p>I’m finding it hard to identify with what you’re talking about.</p>

<p>When my husband and I were young, we worried about money constantly, even though we had no student debt and had managed to break even in graduate school. We waited TEN YEARS after we got married before we had a child because we were afraid of the financial consequences of starting a family.</p>

<p>On the other hand, my 24-year-old son is very casual about money, and my 20-year-old daughter is planning to borrow an amount of money that horrifies me to get an MBA a few years from now. (She’s right that the MBA is a good idea, but I would never have had the courage to borrow that much money; she does.)</p>

<p>I wonder whether the different attitudes about money in your family might reflect the individual personalities involved, rather than a generational difference.</p>

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<p>Actually MOWC, I was replying to oldfort’s post. I doubt that my daughter has ever shopped at Henri Bendel. When I was with her for graduation, she was accessorizing by dumpster diving at the dorms. (Lots of cool stuff left by other kids moving out).</p>

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<p>Compared to the lives my children’s grandparents lived, DW and I have lived pretty well. But in our neighborhood we’re “poor.” One of the greatest gifts we’ve been able to give our kids was the knowledge that they don’t need a lot of money to be happy. Some might call them laughably thrifty … they call themselves happily thrifty.</p>

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<p>It seems that teriwtt might be a little jealous of her daughter. I worked many odd jobs throughout school selling things on EBAY, Amazon, etc. I have a nice bank account balance. It is by no means a large sum of money, but I pay my expenses, go to concerts, and go on a short trip or two or year. My parents always say that I’m lucky because I have the Internet to sell my items and they didn’t.</p>

<p>The next generation is going to say they had it harder than the prior generation and so on. It’s hard sometimes to be friends with kids whose parents give them hefty allowances, buy them nice cars, and provide vacations for them. The thing that you have to tell yourself is that there is always going to be somebody who gets more and somebody who gets less than you. You are always going to be somehwere in between. It’s hard sometimes to be around people who get a lot more than you do, but that’s life and something that people have to deal with.</p>

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<p>Neither of my parents went to college, which is why I think they ingrained it in our heads, from a young age that we would all go. I won’t make a comparison as to whether or not they or we have lived the better life. It’s a subjective observation.</p>

<p>Again, going back to my original observation. It doesn’t matter whether the new job out of college allows you to shop at Henri Bendel or Walmart. If, in good faith, you are trying to be a good steward of your money, and only spend on what is appropriate for your income range, then you shouldn’t have to justify your expenditures to anyone.</p>

<p>I’m betting that there are recent grads shopping at both Henri Bendel and Walmart, spending well within their means, yet worrying. As I’ve contemplated this more this evening, perhaps it is more a manifestation of the economy. The 2008-2009-2010 grads are struggling to find jobs, and see their friends struggling to find jobs. Heck, many of their parents may be unemployed. Perhaps they see the uncertainty of the job market and realize how fragile their income can be. It would be interesting to ask some of these kids what they feel a good cushion in their savings would be at this time in their lives… what amount would alleviate the worry. </p>

<p>Like I said, D is a hard worker and is bright. She will always land on her feet. Since she began her new job, she’s had weeks where putting in 60 hours is the norm, and other weeks where she’s twiddled her thumbs waiting for assignments. After some of the more harrowing weeks I’ve shared that I’m glad it’s quieting down for a bit; but she tells me, “Mom, if work is slow, I can’t prove myself as quickly as when there’s a lot of work, so I’d rather be busy.” When she was hired, her employer told her he would likely not wait a year before her first job review, and it could happen at six months (he said this would correlate with a raise if her performance review was positive). So she is definitely motivated to work her butt off. She’s not looking for the easy way out.</p>

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<p>It may be the lifestyle many kids have been raised with. I know girls who regularly get mani-pedis…something I still only occasionally get.</p>

<p>I don’t think Teri is jealous. I think she’s just pondering the situation and how things have changed.</p>

<p>And, she’s right. A couple who could live like she and her H did many years ago, might not be able to stomach it today…simply because this generation of kids have many more “things” and luxuries…heck, even many low income kids have cell phones.</p>

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<p>I am a little confused about the point of this thread. In your first post you stated:</p>

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<p>You then say you shouldn’t have to justify your expenditures to anybody. Didn’t you just do that above?</p>