“However after her lack of “money management” WE have asked her to plan on her financial contribution and maybe a little more next year:)”
My suggestion is to take any sense of punishment for past attitude/behavior and any emotion out of it. Find what works for you financially based on your and daughter’s financial resources and needs, and set realistic and clear expectations. Putting them in writing might be a good idea to avoid misunderstandings as well as reinterpretations down the road.
Having productive, mature, and unemotional discussions about money also helps our children by developing and modeling the useful language and skills to discuss and handle financial matters with a life partner down the road.
My spouse is really good at this kind of thing and took the lead in teaching our kids this and I have told him numerous times how grateful I am. I was not raised with any kind of budget parameters at all and honestly the only reason I didn’t get in trouble was that I did well and am not super spendy.
@phunt01810 - Not sure if you capitalized WE due to something I posted. I did capitalized NOT because I was very clear with DS about what we weren’t going to be doing. Around here a lot of people do buy their kids new cars and such. Also I wasn’t implying that I as making all the decisions about what our son had to pay. My husband is all on board with it. In fact if he would like DS to also pay for part of housing but I’m kind of on the fence about it. Sorry of that came across wrong. Sounds like you have a plan in place.
I didn’t have parent help starting at about age 18. Sure, they throw me some money when they can but they’re very low income. Mostly, I helped them when I was in undergrad and now grad rather than the other way around.
I don’t budget. I can’t stick to a budget. But since I have roughly the same bills every month, I know what is going to be pulled out of my account and what I’ll have left over. I guess that’s a budget?
IMO, the only way one can learn to be “financially independent” is to actually BE financially independent. That doesn’t mean you can’t help her out in a pinch or that you should let her go without food and shelter, but if you’re always going to be there to give money, why would she ever learn to stay within her means?
Some families are in the extremely privileged position to be able to provide a financial safety net for their young adult offspring. And in some cases this enables and emboldens those offspring to take career risks they might not otherwise be comfortable with and sometimes that turns out very well. And when it doesn’t, it isn’t a crisis situation for anyone.
“some families are in the extremely privileged position to be able to provide a financial safety net for their young adult offspring. And in some cases this enables and emboldens those offspring to take career risks they might not otherwise be comfortable with and sometimes that turns out very well. And when it doesn’t, it isn’t a crisis situation for anyone.”
That is exactly the position we are in with S, who is in a low paying field. He could self support on his salary but it would come out of the hide of saving for the future, which we believe strongly in. Hence, our approach of having him max out his 401k, which takes his paycheck down to an amount that no one could possibly live on, and making up the difference so he’s not living on anything “grander” than his salary (i.e. he’s not being subsidized for a style of living he hasn’t earned). Even so, he still is very frugal and saves money out of this, which proves he could live within his means. I credit H for coming up with that - it was a smart move that still doesn’t subsidize “blindly” and encourages delayed gratification.
Yes, we always encourage S to max out all his retirement accounts first and have offered to help if for any reason he doesn’t have enough liquidity to fully max them out. Letting compounding work on their side for retirement savings is the greatest legacy we can give our kids.
We funded both kids with Roth RAs in the amount of their gross salaries when they had their first jobs.
The best thing that ever happened to me as far as getting introduced to the real world of budgeting was filling out the financial aid app for college. When I got my aid package, there was a full year’s worth of clearly defined budget and expectations laid out.
It included how much I needed to earn by working on-campus during the year, how much I was expected to save for tuition over the summer, how much was expected from my parents, and how much the school would provide. So once a year my parents would write a check for their portion and that was it for their financial contribution to me for the entire year. No other allowance, no asking for extra money, the rest was all laid out in black and white. If I wanted extra luxuries (defined as anything beyond room, board, books, and tuition) then I had to work extra hours and earn them.
This is a probably a good time for the OP to create something like that with his D in cooperation with his W. Not just to wean her off his wallet, but as one last act of parental love and guidance to help them get a good start in life. I would view it as a parental responsibility as important as teaching them to brush their teeth and tie their shoelaces.
My parents never did anything like this for my eldest sister. She’s spent much of her adult life spending her money on clothes, toys, travel, etc, then calling my parents and asking for money for food and rent.
Thanks @anomander . A reminder that kids first need to learn that self reliance and independence is a joyful thing. After this is taught, then everything falls into place.
This is a probably a good time for the OP to create something like that with his D in cooperation with his W. Not just to wean her off his wallet, but as one last act of parental love and guidance to help them get a good start in life. I would view it as a parental responsibility as important as teaching them to brush their teeth and tie their shoelaces.
I had planned that my graduation gift to my daughter would be a copy of “The Millionaire Next Door” and Eric Tyson’s “Personal Finance for Dummies”. She thwarted my plans by getting a full-time job and attending school part-time. I also highly recommend emailing them a link to William Bernstein’s “If You Can” (https://www.etf.com/docs/IfYouCan.pdf) – a wonderful free guide to funding retirement for those just starting out.
These don’t directly address the “how to wean” question, but I think it helps to give the kids tools to help them manage personal finance. Some high schools and colleges offer courses in this, but not everyone can/will take advantage of the opportunity.
My kid is really lookinhg forward to self-reliance and inddependence, on grad student stipends in a high rent area. Ramen noodles and 7 roomamtes will do. I am wrecking my brains how to help without squashing the independence. My solution is to give a set amount annually to bring down the rent to a national level.
Yes, some grad students receive great support, especially if they are in a PhD program with good grant support. Others (especially humanities) may get barely more than tuition and have to scramble and/or get loans, especially masters students.
As always, there is a huge difference between “grad student” and “PhD student.”
“Grad student” can be a master’s student which would mean that s/he would get generally very little, if any, funding.
PhD students on the other hand (IMO) should never take an offer where s/he couldn’t be self-supporting. (This absolutely includes humanities PhD students.)