About a week ago in a local Facebook group, a nice lady reached out to other parents regarding her two college-aged kids and whether or not she was unreasonable for thinking it was time her kids covered their own car insurance and phone bills, especially as there had been some large shifts in parental income and the adult kids in question were about to move out. The overwhelming answer was no, but some interesting points and comments were made about the process of transferring money responsibilities to your kids when they become adults.
I used to be a high school teacher (mostly ninth and tenth graders), which has given me a certain set of insights as to how teenagers view these things, which don’t always line up with how their parents see them. What it told me overall is that some of these conversations need to start with our kids earlier than most parents probably realize. There are also two important things I think parents should realize when starting this conversation though. One, most teenagers really don’t have an idea of how expensive being an adult is. They have an awareness that things cost money, of course, but how much money as compared to the household budget and how many things the household budget includes is more conceptual than real. The other truth is that most middle-class kids seem to have an expectation that their quality of life when they launch out of the nest is going to be immediately equal to what their parents have and don’t get that by the time they are leaving the nest, the lifestyle they are accustomed to came after about twenty years or more of their parents being established adults.
The conversations should probably start around age fourteen. Why fourteen? Two big things start as your kids hit high school age. One is college or other post-high school talks begin, the other is that legal driving age and the desire to have a car of their own is staring them down.
I cannot tell you how many ninth graders think they are driving their dream cars right when they turn sixteen. At that age, few teens have a concept of what a car costs, what insurance costs (especially for a new driver), and what gas costs. Somehow it hasn’t sunk in that if the parental units are not driving a high-end new car, there’s no room in the budget for them to have that level of a vehicle. A lot of those ninth-graders will turn sixteen during their tenth-grade year, so having conversations about whether or not the family can afford for them to have a car and who is covering what related expenses in advance is not exactly unreasonable. If parental units are covering those costs, at what point do they get transferred over to the kid? Not having these conversations early tends to create a huge sticker shock if your kid becomes an adult, launches out, and gets told “oh, by the way, I hope you also budgeted for this important amount of money that you were vaguely aware of.”
Post-high school talks start as soon as ninth grade in schools. When kids are making schedules, they often get asked what they want to do after high school to make sure college-bound students are getting the right number and appropriate types of credits. College and trade school explorations also begin. Unfortunately, a lot of those in-class conversations do not take into account the family college budget.
College costs have soared in the past two decades, and if it’s one thing the Millennial generation learned the hard way it’s that the college debt to income a particular degree generates is a very important ratio that can have huge long-term financial impacts on both parents and their kids. I can’t tell you how many online advice columns I have seen where a kid worked their butt off and got into an exclusive dream school that the parental units were not prepared for because of the low acceptance rate, but now there’s no way that the kid in question can attend without concerning amounts of debt being taken on.
Your kid may be madly in love with the idea of going to a college in another state, but many schools have very high costs for out-of-state students. This doesn’t even factor in how many kids one family might see hit college at one time which dramatically can change the availability of financial resources. Have an honest conversation with your kid earlier about what is and is not affordable. They still may want to apply for that reach college/dream school too, but they at least should be aware of what scholarship level they would need to make that a financial possibility.
It’s also worth pointing out to your kid that if they are really in love with the idea of moving to another state that a degree can be earned from one state, but a post-college job can be in another state. It’s okay for your kid to come to their counselor with “the reality is that x is what my family can afford so that we can all avoid concerning amounts of debt, can you help me look into the options within this range?”
With post-high school plans, decisions about the launch into covering their own expenses probably need to come up. Some families cover certain expenses while their kids are going to a local college or trade school to help them avoid big post-college debts. Nothing wrong with that, but make sure your kids understand what expenses those are, the monetary amount you are covering for them, and how long you are covering these things. When the time is up, your kid may suddenly find themselves getting hit with things like cell phone bills, car insurance, and health insurance, and that’s a lot if you’re not anticipating what those numbers are because they’ve existed in the vague reality of “parental units cover that so I don’t have to think about it.”
If you’re charging your kid a small amount of rent so they become accustomed to the idea that they need to start budgeting for their own major living expenses, make sure they are prepared for that in advance and don’t just spring it on them as an “oh, starting next month we hope you’re prepared to start paying us x”—give a reasonable lead time. Note, with phone bills, it may save everyone involved money if you let your kid simply pay their share of a family plan and replace their own phone. We have a setup like that with two of the in-laws and the end result was everyone got a nicer plan for cheaper with the in-laws just sending us a reoccurring monthly payment to cover their end of things.
The final note to make to your kids is that if major events hit your family, there may need to be some adjustments to the financial plans. Loss of a parent, divorce, major medical emergency/issues, unexpected long-term unemployment, or work hour reduction can all lead to changes in the money resources available to help your kids launch. If something big happens, make sure they are aware that some of the previous promises may have to be altered. Maybe you could afford that out-of-state school when they started looking up colleges in ninth grade until a major medical bill hit at the end of their junior year.
If the circumstances change, be honest and reassure your kid that you’ll make a new plan together. Also, I have seen a lot of grumbles and upsets caused by things like an adult child deciding college wasn’t a fit for them and have no new plan in place other than living with their parents or just moving back home after college with vague promises about a job search. Both tend to cause a huge tension because the adult kid is now often retransferring all expenses back to their parents.
If anything like this looks like it is going to happen, your kid needs to expect there is going to be a very important conversation about expectations upfront. Four months after the fact often turns into a high-stress situation where the parents feel taken advantage of and end up in a power struggle with said adult kid over financial costs and household expectations of someone living rent-free. Save the sanity of all involved by making certain any relevant parental units are on the same page about what the expectations are because one parent can easily be played against the other in these situations.
The bottom line is, if you don’t want to be having these arguments with your kids when they’re in their 20s, you may want to set the expectation and realities upfront.
GeekMom Elizabeth (who will be starting to have these same conversations with her kids in just a few years)