My older children are just starting to fly the coop. At ages 23, 20, 18, and 15, they've lived their entire lives, almost, hearing their parents talk about money. They've heard the "spend, save, give" mantra ad nauseam as little kids. They've had "never spend more than you earn" drilled into them. When we would go to a store, and they wanted something, I would ask, without hesitation, "Did you bring your own money for that?" They KNOW nothing comes free from mom.
Up until approximately 2007, money was a sore spot in the household - at the end of every month I'd struggle to figure out how to pay the bills that my paycheck just would not cover. I was sickened and saddened that, for some reason, my family could just not get ahead of the curve. I would think to myself, "I am an engineer - how is that statement even possible?"
And then I found Dave Ramsey. His Financial Peace University (FPU) course saved my financial life. I liken FPU to financial elementary school. These are ALL the basics you need to know in order to put yourself on solid financial footing. I tend to give this course as a gift to all newly married couples I know, I found it that valuable. And I attempted, clumsily, to pass these basics onto my children. I read every book about kids and money that the Ramsey organization has to offer (from the library or free on my Kindle, of course). But kids have a habit of just NOT listening or digesting information unless they WANT to (or if it's picked up in the background of the household, which pertains to most of their life lessons). Or at least mine do.
Fast forward 13 years, and now the third one is on her way to college. With my oldest, I've been nervous from the start, since she seems to care little for money and no amount of it bothers her one way or another. But we got through university with no debt, and all my investments and emergency funds are intact, so we must have done something right there. She is living on her own, paying for all her own expenses, and seemingly living her dream.
My second daughter is well on her way through a Masters in Teaching degree, with a major in Math and Secondary Education. She also has no debt, is rolling in scholarships, and tends to have enough money left over after paying for school to invest in the stock market every year. I suspect she will own her own house outright before I do.
My third daughter is starting university this fall (2020), and having to make some tough decisions. It is with this daughter that the "how to teach kids about money" situation has come fully to light. She is facing a rather large potential student loan debt at the end of four years, and, much to her dismay, looking at a university experience that may just be entirely virtual and very little "experience". I have made it clear that, from my perspective, all this debt will fall squarely on her shoulders.
But how could I have known just what financial picture was laying ahead? For each of them I've created a spreadsheet with a decision maker sheet (which college to attend), and a cash flow sheet (which year he/she will run out of money). Money Under 30 has a great, free budget to track monthly expenses. Both are an easy way to see, visually, which school makes the most sense for your student, and how your student's spending impacts their bottom line. Google Sheets enables sharing and this is vital to do between you and your student so you both can see what's happening, and course-correct if necessary.
For my family, communication about this topic is KEY. I need the kids to understand the basics of budgeting, the financial impact of their college decisions, AND I need all of this tracked so that I can use it come tax time. A spreadsheet, shared with my kids, works really well for this. We can both see it, we can comment, edit, talk it through, etc. I know exactly how much of my savings will evaporate into the pocket of a scholarship-heavy kid, and I know how much to encourage more work or scholarship applications for the potentially debt-heavy kid. The keystone to all of this functioning, however, is DISCUSSING it. I have never wanted any of my kids to walk into a financial situation that can ruin them for the next 30 years without having talked about it first.
I can't stress this enough. Talk to them. About everything. About your expectations, your willingness to contribute to their education, their daily expenses, their transportation, etc. They may not want to hear it. They may yell at you, or sulk (like when one of my kids heard the 529 Plan wasn't "hers", it was mine and there if she NEEDED it, but would be passed down to her siblings if she didn't), or tell you it's unfair. But it doesn't matter. It is YOUR money, not theirs, to decide how to spend. And a document with which to discuss this is a tool worth having so everyone knows where they stand. Check it out today!