We use Turbotax for the whole family. DD is a college grad. Last year she came home to use our Turbotax. This year she used the free online version but used the family PIN to import her data from last year. We’ve done DS’s most years, but he will be on his own after college.
Alexander: I’m not just talking about kids. And unless you’re trying to put me out of a job, I will continue to prepare taxes for those who don’t feel qualified to do their own. And many, many of those have very poor financial knowledge.
It has been trial and error for my boys. The older one blew through a lot of money as an undergrad, but now in law school, he has to be more conservative. The money just is not there. We tried to encourage him to save when he was younger, but he did not. So there are weeks when it’s Ramen noodles. He learned the hard way.
The younger son is better with money. He traditionally eats his meals on campus (the older one did not like the food). Next year, he will be living in his fraternity’s house. No meals are provided, but that is all right with him. He wants to cook certain things that he enjoys. His biggest love is clothing (same problem the older son had). So we keep him on a leash when it comes to purchases.
I am an accountant but I have to give my H credit for teaching our kids about money management!
S texted a few weeks ago. He was concerned that the pay from his on campus job would not be in his account and he needed to pay his credit card bill. (it was all OK). I thought it was a good sign that he was aware of not wanting to pay late and hurt his credit score.
When D graduated and got her full time job, we agreed to keep her on our cell phone plan and my health insurance (till age 26). The deal was that she had to put the money she saved into her company’s 401K. She resisted at first, but now she is very pleased as she sees her 401K growing with her contributions and company match.
No need to get defensive. I agree that many people have little or no financial education, and I’m sure you do a great job for your clients. I simply suggested that one way to improve financial education, especially among young adults who are just leaving the nest, is to have them try to do their own taxes.
@Fallgirl, some credit card companies let you choose your due date, might be helpful for him in the future if he can plan it for a better “financial” time of the month.
The most effective “teaching” we did about financial education was always giving the kids some money for every vacation (averaged about $5/day). We gave it to them as a lump sum at the beginning of the trip and it was theirs to spend or save. D inevitably bought a memento of the trip and S tended to save his. She loved having reminders of our travels and S loved having the cash.
In grade school, they had “mini society” where they we able to set up a store and “sell” things to the other kids. Both kids did great–S would mark his merchandise up and have a “sale” with 50% off and got a lot of traffic. I also allowed him and D to buy and sell their textbooks. S was more aggressive about it and generally made money each school year by selling his books as soon as the year ended and buying the ones he would need for the next year. D was a lot slower to ask around and generally had to buy for higher prices at the bookstore.
When the kds were in college, they were able to manage their funds. We would give them a lump sum at the beginning of each term that was equal to the amount for a meal plan at the U and have them make sure it lasted the term, for food and whatever else they wanted or needed. It worked out fine.
Both are very financially responsible and have gotten whatever credit cards they have applied for. Both pay their credit cards off in full every month. S decided he wants to live a better life than his full-time salary will allow, so he started a part-time job that pays more than his full time job. He fully funds his 401K and saves a lot of money as well. He has a Roth IRA and we are encouraging him to fund a backdoor Roth, since he makes too much to fund a traditional Roth.
What exactly are you referring to when you say “money management skills?” Just day to day keeping up with how much money you have, budgeting and living within one’s means, etc.? Or learning how to best invest money for future benefit?
D1 is a PROLIFIC saver and manages her money very well in terms of living below her means so she can save, keeping track of her ATM deposits/withdrawals, paying bills, etc. We call her the little miser. But DH, who got his degree in finance, was on her butt constantly about taking a personal finance or business 101 for non majors class, and she just seemed to weasel her way out of it every semester. It drove him nuts. I don’t think she ever did take it, and now, as a grad student, she is soliciting his advice about how to get more from her money. She squirreled away 25K over the years (probably has more than that now), but had it sitting still in not very profitable vehicles. DH is advising her, but he still complains that she never took that class.
Just learning that money only goes so far and what the parents all pay for is a valuable lesson.
We really never had much money to save and just recently H got a job where ge can contribute to a 401k so that is great. The money comes out pretax and we never see it. The employer match is a great bonus.
Lots of kids think that college loans are not a big deal, but paying them back can be alot harder than imagined, depending on where you live after college. If you pay back loans you might not have money for a car, wedding or many other things young adults may want or need. And most of them probably don’t want to move back in with parents at that age.
Having both a daughter in college and another in medical school, and hiring about 5-6 interns every year, my personal assessment is that they have very poor money management skills. Much of this I attribute to over-indulgent parents. While these are anecdotal examples, I have seen where kids graduating from top Ivy law schools are still having their parent pay their rent on city apartments. Large allowances (2K+ a month) for kids doing summer internships, or going clothes shopping for a 26 year old person. I find it ridiculous that some of these kids have not been early weaned-off their parents pocketbookʻs earlier.
Debt and how to practically utilize it, is like any other like life skill–it needs to be taught at an early age and reinforced. So, while it is certainly the prerogative of any parent on how to spend their money, in many instances, you only defer and stunt the maturation process of any young person to totally take responsibility of their own lives.
We’ve always told our daughter that school was her job and as long as she did good in school, she didn’t need to work. Only child; got her wants and needs taken cared of. Taught that any money she got (birthdays, christmas, etc) that half goes to savings. Now HS is coming to and end, she did EXCELLENT in school, and now I’m afraid she does not know how to manage money. The only thing she knows is half of her money goes to savings and dad & mom buys you whatever you want. Yes, bad mama here.
My advice…teach your kids the value of money at an early age. Now i have to teach her money management in 2 months.
@boolaHI That’s me. Another example that life is a never-ending lesson 
Think what we’re doing is right, only to have it bite you in the end. Oh well…
@onlyrodeo, having a job in high school isn’t necessarily going to teach them anything about money management skills. You are not a “bad mama” for not making your HS kid work.
Were you actually “buying her anything she wants,” or were you simply taking care of all her needs? Did she ever have to buy something she wanted with her own money (which most kids have been given as gifts at some point)?
There are adults who have been working since their early teens who still can’t manage their money.
I agree–donʻt be too critical with yourself!
My point is two-fold: One, that while we all want to extend a safety net to our children, extending ourselves when they are well into early adulthood benefits no one, and in fact, contributes to an unhealthy financial co-dependence and lends to sloth-like entitlement. Second, some manageable debt is actually healthy–as it creates both vestment towards education and their future goals, while placing them in a situation when then can start exercising prudent fiscal controls and management.
IMNSHO, money management is not the sort of thing that should be required in HS or college. There isn’t enough time for the academic learning they need, much less adding yet more “life skills” requirements.
My D’s high school has a mandatory Financial Literacy class that they must take to graduate in their senior year. It not only teaches them money management, credit and the like, but also teaches them the little things, like how to write a check.
I think all these type of programs are helpful, however like most anything, it comes down to practice and how it is both reinforced and actually utilized in the respective household.