We usually buy a car that is a couple of years old since they lose much of their value in the first couple of years. Then we drive them until they die or someone totals them for us. My previous car we’d saved $20,000 for but the car guys were offering zero percent financing. It was a no brainer to invest the money and pay for the car out of savings.
I know the kids did something with budgets in middle school as part of the Home and Careers curriculum, but I didn’t get the impression any of it stuck.
As an educator, I find it somewhat frightening what little students actually know about finances. I currently teach a leadership class with seniors and it was eye opening to me to learn that they had no concept of credit cards, students loans, budgets, etc. I did some investigating and found a wonderful resource called cash course and you can find it by going to cashcourse.org and sign up. This is a valuable tool for them to use as they begin a new chapter in their lives.
As a parent–my husband and I were always honest with our children about finances and it seems as though they have grown up to be fiscally responsible adults. Although I’d like to take all the credit for this…I think each child is different and each will make their own decisions, but giving them information early on seems to be really valuable.
Again, I recommend cashcourse.org. It is free and anyone can sign up to use it! (Also-some colleges are using this resource as well so your son/daughter may encounter it once they are in college).
No, and probably. Though we have done extensive estate planning to protect trusts from divorce, a person can always choose to co-mingle. We have done everything there is to do to keep the money in the family and on someday to grand kids. At some point, though, you know you can’t foresee everything.
^^^Yeah, we are going to see our estate lawyer soon, so we will ask. But he didn’t set up the trust, another lawyer who is now deceased did. We are the trustees of this trust, so we will have some influence on how the funds are dispersed, but I don’t think there is anything we can do at this point to force anything.
We never anticipated anything being left over in this trust beyond a few bucks, particularly if they’d chosen private schools for college. Who knew the investment would never mature until after they were out of school?! We unfortunately never even considered that as a possibility.
@Nrdsb4 it is almost a shame in your case that your DC do NOT have college debt to pay off. I would never encourage it, and I do understand the deal still may not go through, but what an awesome gift it would have been to say remember those loans you thought you had?
Anyway, I see this as a situation that you have prepaid for weddings and college funds for any grandchildren. Your children have an excellent lesson in long term investing!
@Cheeringsection, yes, to all of the above. Although, as both kids have many friends who have debt, who must work to even be able to live at home and pay their tuition, they do understand what an incredible gift they’ve already been given.
I asked our attorney if we could just “forget” to tell them about their great windfall for awhile, but he said no, that they must now start receiving statements detailing assets in the trust after D2 graduates in May.
I understand wanting your kids to feel the pain of knowing they are on their own and have to make their own way. DH in particular feels very strongly about this. That’s why he really wants to kids to allow him to invest most of their windfall in some kind of long term investment so that they don’t feel as if they have a lot of cash to use as a crutch or substitute for work ethic. DH and I grew up with nothing, always having to work at least one job to make ends meet, and as previously stated, this is a good lesson/experience for motivating one to better oneself. But as @Pizzagirl pointed out, some people have that drive regardless of their upbringing or SES. Both of my Ds are very committed to advancing themselves via school/grad school with an eye towards a meaningful career. I think they will be ok.
If your kids already have a solid work ethic then the gift you are giving them isn’t just financial- it’s learning about taxes, capital gains, asset accumulation, balancing a portfolio, etc. All the studies on women show that they are less financially literate than men of similar income/net worth.