From his early elementary years, my child never met a dollar he didn’t like to spend. I hoped that his behavior would change, but all through high school, as soon as he earned money, he spent it. I worried that he would be a spendthrift for life. However, adulthood has changed his money management.
How Adulthood Can Change Money Management
After his first year in college, my son got a job this summer. We took several steps together to secure his finances.
We Created a YNAB Budget
As part of my YNAB subscription, he can create his own YNAB budget. Since he lives seven hours from me, we set up a Zoom call so I could help him set up his initial budget. Every other week when he gets paid, we work on reconciling his accounts and allocating his money. YNAB has a steep learning curve, but I’m hoping in a few months, our son will be able to do this process on his own.
He Had to Pay Car Insurance
We gave him our 19-year-old car, but he’s responsible for gas and insurance. We set those categories in his budget, and he pays them. By having to pay his car insurance, he has an incentive not to speed and to drive responsibly. If he doesn’t, likely his insurance will increase, causing him to pay more.
He Had to Pay a Portion of His Tuition
Likewise, we pay 75 percent of his college tuition; he pays 25 percent. Thankfully, he also has a scholarship, so his portion of tuition is less than $500 a semester. Still, we want him to have some responsibility to pay for his education because we believe he’ll take school more seriously then.
Steps He Took on His Own
In addition to the ways we’ve helped him learn money management, he’s taken some surprising steps of his own.
Opened a Robinhood Account
He opened a Robinhood account and invests a small amount. He chose dividend stocks, and when he received his first dividend, he rolled it into his investment.
Opened a Credit Sesame Account
In addition, he opened a student account with Credit Sesame to try to build his credit score. He proudly told me that his current credit score is 600. With increased time as a cardholder, his credit should continue to improve.
Opened a Roth IRA
Finally, he opened a Roth IRA and is contributes a small amount each pay period. He can’t save as much as he would like because he needs to save for increased educational expenses when he transfers to a four-year college. (He’s currently at a community college.)
Final Thoughts
Our son was a spendthrift from childhood, and we worried he would be financially irresponsible all his life. However, we tried to set a good example. Now, we’re pleased to see that responsibility and adulthood seem to have improved his money management. Right now, he’s in a much better financial position than I was at his age.
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