Our oldest turned 19 recently. He’s in college, has a driver’s license, and has a part-time job. He’s not been the best with money but is trying to improve. Because of that, there are several things I’m doing to help my son prepare for adult finances.
To clarify, he asked me for this assistance. While I’m trying to guide him, I’m also trying to stand aside so he can make money mistakes and learn going forward.
How I Help My Son Prepare for Adult Finances
We Gave Him a Car
I know this sounds extravagant, but it’s not. We bought a Toyota Sienna minivan when he was four months old. The van has 240,000 miles on it but still runs well. That’s the car we gave him. He’s grateful but also embarrassed by the vehicle and plans to buy a replacement when he’s able.
I Helped Him Set Up a Budget
He’s seen me use You Need a Budget (YNAB) to handle our family budget all his life. Recently, YNAB has developed a new feature, YNAB Together, which allows my son to have his own account through my subscription. We set up an initial budget. Then when he received his first paycheck, we Zoomed together so I could teach him how to use the software.
YNAB has a big learning curve, so I suspect I’ll have to help him with the software through a few more paychecks.
We’re Making Him Pay His Car Insurance and Gas
While he’s in college, we’re covering car repairs and maintenance. We also have him on our insurance. Adding him to our insurance costs an additional $1500 a year, which we expect him to pay. He was dismayed that most of his first paycheck went to paying the first six months of auto insurance.
We decided he should pay this expense because if he gets a ticket or has a fender bender, the insurance will go up, and he’ll be responsible for the increase. Hopefully, this will be an incentive to drive cautiously.
He Has to Pay Part of His College Tuition
He got a partial scholarship to college, but we expect him to pay 25 percent of the remainder of the balance. Like car insurance, we want him to pay because we want him to have a vested interest in his education.
He Pays for His Entertainment
We cover his food, and his housing is free. So, he also needs to pay for his entertainment out of his paycheck. He met coworkers at a restaurant and order fries and a drink because he wanted to be conservative with his money. He was shocked to pay $14, including tax and tip. Having to pay these expenses rather than us paying is making him more aware of how quickly money can go and how to be frugal.
Final Thoughts
Our son is a legal adult but still learning to manage his money. We’re trying to give him a good dose of reality by providing him with a financial safety net and encouraging him to manage his own money and make smart decisions.
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Image and article originally from www.savingadvice.com. Read the original article here.