How have other families structured financial arrangement w/ kids?

Parents Forum
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I paid for all expenses for my kids while they were in college. It included books, computer, travel home, tuition, etc. I also gave them monthly allowance, but in order to get the allowance they had to work 10 hrs a week. They had to maintain minimum 3.0 GPA. To stay in their sorority they had to have 3.5 GPA. The reason I wanted them to have a job while in school was to have work experience on their resume. They were also required to work every summer and it had to be paid work.

Some people may think my kids had it easier than others because they had everything paid for and plus some, therefore they may feel entitled and would expect to be supported by me after graduation. They are both out of college ad are working at 80+ hrs a week jobs, except the older one makes an IB salary and the younger one works for less than 60K a year in NYC. Both of my kids live within their means. D2 goes to a lot of free events, and D1 splurges a lot on her younger sister (paying for meals, and nice handbags). :slight_smile:

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My son works on his campus, by choice, at a job related to his career. But because we didn’t set a limit on how much we would contribute or pick a random number of dollars he needed to contribute, he was able to search out a job that would help him. He didn’t have to take pay or hours into account like he would if he had artificial bills to pay.

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I am surprised that many parents set 3.0 GPA as a “skin in the game”. I understand that this may be merit scholarships requirements but many jobs will be closed for graduates with such a low GPA.

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We set 3.0 as a criteria for our kids to continue at their schools…because they would have lost scholarships with less than a 3.0 GPA.

That’s a B average.

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@austinmshauri – what do you mean by “artificial bills to pay”? I can assure you that my kids’ bills is and always have been very real. As was the very large amount that I needed to pay each year for the bigger-ticket items of tuition & housing (which I could only afford through borrowing on my own) — and I can assure you that the bills from Sallie Mae or Nelnet or Mohela for those loan payments are also very real.

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@calmom, I’m referring to the parents who can afford to be full pay but want to create a set amount their kid has to pay just to make sure they’re paying something. There are opportunity costs that should be considered, and they may not even know their kid is missing out. That’s why I suggest letting them cover incodentals. If they work a few hours during the semester, they’ll have time to explore the opportunities that are available in the summer. But a kid who has to work full-time all summer to raise $5k for the fall isn’t likely going to take the time to investigate things he’ll have neither the time nor the money to do.

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DS chose to attend the OOS private where he earned enough merit aid to bring the COA comparable to our IS flagship. Keeping that scholarship is his #1 job. We pay for room, board, books, dorm furnishings, cell phone (Christmas gift), basic clothes and give him $50/month to cover toiletries, a haircut, and whatever else he can squeeze out of it. He is responsible for anything else (club fees, eating off campus, etc). He knows his full 4 year budget and will only need a loan senior year if he spends his budget before then. For example, his room choices next year vary in cost by as much as $2000. He can live in the fanciest dorm next year or he can choose to spend less and save that for later. He has already figured out how to buy books from classmates that took the class the previous semester and saved himself $350 this semester by doing so. Those engineering major type books are pricey! For freshman year we set a budget for him to travel back and forth to school. It may not be spent to go elsewhere. For later years he might have the use of an older family car that is in great shape and up to the drive but it is not what any college student really wants to drive. He will need to cover gas and insurance to earn that privilege. We will cover routine maintenance, tags, etc in lieu of the travel budget. He is working on campus 5-10 hours a week at a very flexible job that gives him great experience that is not typical for those in his major. He also has a FT summer job lined up that pays a bit more than minimum wage and is related to his chosen field. Life is good!

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@ OP,

As far as how we structured the arrangement it works like this for us. Both of my sons set up checking accounts at the same bank I bank at which allows me to transfer funds without a transaction cost at any time. No checks. No mailing things. I also obtained delegated access to his university so that I can view and pay his account balance at the beggining of each term. They charge a fee for using a CC so I learned how to write an e-check to avoid the fee.

I pay the tuition up front and then he tells me when he needs funds every now and then for operating costs such as apartment rent, food, etc. I have a rough idea how much he needs but I haven’t set a detail budget and I don’t worry about it. He says he needs funds, I make the TF within 24-hours. Simple as that.

He did work some during the year as a learning leader or something that will go on his resume. I just got his W2. For you parents, when you pay your taxes, to get the maximum on the education credits, one trick is to include the student’s scholarships in his or her income instead of deducting them from QEE’s. That means you paid the QEE not the scholarship and that means you can get the full education credits. Now, of course, if you deduct the scholarship from the QEE and still paid enough QEE to get the full credit then go for it.

Adding the sch to the student’s income is no big deal (very low rates) if it means you get a credit which reduces tax liability dollar for dollar in your higher tax bracket. My youngest son lives at home still, he a freshman, so there is the normal financial arrangement. I think different families have different ways to get their kids to be independent and responsible and dependable and so forth. There is nothing wrong with asking the students/kids to have skin in the game. I pay for all the education but I might ask them to cover other costs or dedicate resources to savings for later which is basically skin in the game. We are setting up Roth IRA’s for both of them real soon and that is an example.

One hand washes the other.

If I cover all the education, you put $$$$ into a Roth or save for a car or a house or whatever. My oldest son did a bunch of EC’s in college and had an internship in the governor’s office and shadowed a professional in his intended field and tutored for $$$$ all on his own because he didn’t have to work while he was in school. Thus, from my standpoint my investment into his education didn’t spoil him it was money well spent. Other parents said the sae thing. Don’t be penny smart and dollar foolish. If you have the resources but make them work to have skin in the game and that prevents them from getting good opportunities, unintended consequences as someone called it, you are making a foolish mistake.

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Calmom, internships that are not paid can lead to paid work fairly quickly, as can volunteering. If the internship is not exploitative, it can teach skills that improve employability long term, and improve a resume.

Young people can rarely choose their paid work, but can choose internships: in other words, the internships can be more easily targeted to area of study or interest. And are therefore a great way to explore career options while being of use.

If paid work were available to my kids in their fields, they would jump at it of course. My kid in CS had no problem finding paid work, not so much his artsy sisters. For kids in the arts, paid work is often either not available or not helpful to what they are trying to do. Our culture does not fund the arts very well.

Also, in order to get into grad school for certain performing arts, participation in summer programs is pretty much required. Again, the grad school funding and scholarships that result exceed what they would have made at any job.

I would add that for those with health challenges, internships and volunteering can be just a few hours a week and during a flare, an absence has less impact on the “employer” than with paid work.

I have never felt that my kids needed to be taught or incentivized and always trusted the natural drive to support themselves. This seems to be working well, but I understand many other ways to handle this can work as well.

My kids are all working now, but two still need help with medical and educational expenses (early 20’s). When they can pay those, they will.

Whatever works! I just don’t want others reading this thread to discount the internship/volunteering route. Paid work is great too if you can get it and it serves long term goals as well as the short term one of having some cash on hand : )

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Yes, don’t underestimate the valuable experience that can be gained from volunteering/unpaid internships. One of my kids did an unpaid summer internship with a nonprofit. Zero regrets. The work was rewarding, and she gained very real experience in leadership, office work, teamwork, construction, problem-solving, communication. She had a ton of responsibility, an unusual amount for a nineteen year old. She gained a huge amount of confidence in her own abilities. She’s had two paid internships since. Employers do ask about that experience. It gave her great examples to use for future interviews.
She couldn’t have done this if we had insisted she work.
DH and I both lived at home for college, and worked summers near home. I attended on pell and cal grants. I’ve experienced the necessity side of things. It did make it harder to try things like study abroad, internships, etc. We made the most of the college opportunity anyway. We are very blessed to be able to give our kids opportunities we didn’t have for ourselves.
There really are many ways to get kids to adulthood, as many ways as there are kids, I expect.

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I didn’t say that unpaid internships were bad or worthless - as i noted before, my daughter did two unpaid summer internships during college, over the summers. But she had to figure out on her own how to fund them. She applied for grant funding for her college for the first, and for both she took on extra paid work during the school year. She actually never took paid employment during the summers after her first three years of college – although she worked at a retail job the summer after high school, all of her college employment was during the school year.

So she had the full range of experience – she just also picked up workplace skills so that she didn’t face the prospect of an unpaid internship post graduate – which was something that some of her classmates did end up doing, and there was some pressure on her to do the same. (She certainly was offered a very attractive internship when she was graduating, but she turned it down because she knew she needed a paying job a that point).

Also, again, I think parents who believe that the options for paid employment for colleges students are constrained are selling their kids short— there are a very wide range of types of employment available, and part of the experience gained through paid employment is the process of exploring and finding different types of jobs. I do understand that those who don’t qualify for financial aid in the form of work study might be more limited in terms of work opportunities, as most colleges prioritize work-study students for campus jobs. But my daughter did not receive work-study her senior year, and still ended up holding a campus job working as a research assistant for one of her professors.

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However, if the entry level job in a particular area is typically an unpaid internship, it can be a de facto screening process that screens out people from non-wealthy families or families who are otherwise unwilling to subsidize the person while s/he is doing the unpaid internship.

It is also a message to college students that, since the market level pay for entry level jobs in that kind of work is zero, it is best to look into alternatives, since there is likely heavy competition to get into a viable career track in that kind of work.

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@compmom wrote:

That is just one additional reason why a student with a liberal arts major benefits from having paid employment during college years – so that there is an on-the-job opportunity to learn marketable workplace skills. Because whatever their ultimate career dream or goal… they probably are going to need a day job.

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Apologies for the tangent, but in our experience, it is unpaid internships and volunteering that have provided marketable workplace skills that were not available in their education, which was focused on practicing art of various kinds. Without their unpaid experiences, I am not sure they would be working now, let alone as happily, and I willingly supported the unpaid opportunities they found. Also, as I wrote before, both at the high school and college level, their varied and deep unpaid experiences resulted in funding that far exceeded what they could have earned in the same time period. A very few don’t need day jobs, but we certainly went on the assumption they would be needed, yes.

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My child pays for food and all incidentals. This has taught her to budget and prioritize. And she is building a nice credit score in the process.

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These threads are about as productive as the “do you give your kids an allowance” threads. Everyone has vastly different opinions when it comes to money and children and it starts pretty much at birth.

I want to continue to fully support my kids until they graduate from college, with the exception of discretionary spending, but that’s just what I choose to do. I have two in college right now and they have a lot of aid and won a lot of outside scholarships and what ever is left over I pay because I want to. I don’t want them to take loans or contribute their own money and they are not obligated to do work study unless they want extra money.

I pay whatever the college bill may be, dorm and school supplies, toiletries, books, transportation, cell phone, and laundry.

S16 had a good job last summer and even though I told him repeatedly he would need to save for spending money for the college year, he spent most of his money and apparently went through the rest 1st semester. He has a small income tax refund on the way, and I told him he had better go get a job immediately. As difficult as it is going for me to not help him, I told him over and over last summer to not blow his money and he didn’t listen, so tough love it has to be. Hopefully he will learn and manage his money differently this summer.

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Our expectation of the kids:

  1. do your best
  2. appreciate what you’re given and don’t take it for granted

As long as these conditions are met to our satisfaction, we provide all expenses including enough spending money for modest entertainment. Summers are to be spent productively independent of financial productivity. DD just picked up a small tutoring job but that is her choice. Yes we know we are fortunate.

We knew the kids had mental ‘skins in the game’ and for us/them, having them contribute financially would not make any difference in terms of how they approached their educational opportunity.

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Boy this thread is very helpful!

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My parents expected me to pay for my books and my extra expenses during the year. I didn’t put anything toward tuition, other than what I took out in loans. If you expect your daughter to pay $5K (to you? to the school?) is this something she will need to come up with every year? (seems like a lot) And whatever she is expected to contribute, will you be expecting the same from your other kids?

I’d just hate to see her “penalized” for being a good saver. She’ll eventually need money for a car and/or graduate school.