[USER]

Topic: Kids & Money
Thinking about UTMAs. Do you tell your kids just how much money they have coming their way?

“You’ll receive 500k on your 21st birthday!”
OR
“Your tuition is prepaid and your college fund has 250k!”

Of course, I’m going to teach her financial literacy, saving, and investing, but I’m wondering how wise it is to get specific.

The only reason I killed myself to get college scholarships is because I refused to take out loans, and no other money was incoming.

I’d still have worked hard to get good grades, but if I had a flush college fund, I wouldn’t have stressed about the money aspect because why should I?

Same for if I had a pile of money waiting for me on my 21st birthday.

I’d have done many things differently knowing that I was leaving college with money.

I don’t want to be weird or deceptive, and I don’t want to lie her. I also DON’T want her to kill herself like I did, or stress about money everyday all the time, but neither do I want her to not care or try because “meh, Mom will pay for it.”

So what’s the right balance between talking to kids about their future finances without influencing them to lose their drive?

[Susan]

Sounds like book on How to create an Entitled child 101. No. Do not tell them. Because they should not expect that they are getting that automatically.

If they get to the point of taking out massive loans.. of course you can step in and stop them. But there is a balance you can strike to make them value money without struggling to eat.

You can provide the absolute minimum for them to be comfortable… but any extras they have to earn themselves.

My parents paid my undergraduate tuition and rent but didn’t give me a dime of other living expenses.

That was on me. And grad school was definitely a me problem if I chose to go that route, which I didn’t because it didn’t represent a couple of more years on Mom and Dad’s payroll.

It represented loans I would have to pay back myself.

And getting any money before you’re gone should be about encouraging their good choices so that you’re teaching them to be responsible adults… not enabling them to be able to stay a child because you’ve done all the adulting for them.

[Yeo]

They need to be hungry and have something to work for. Unless they have inner drive already.

I would determine how much I provide for them in early stages by how hard they work for themselves and their own future and let them know that

[Lacy]

Downplay what she will end up getting. Enough that she won’t have to stress like crazy, but not enough to blow it all or take everything for granted.

[Jill]

My parents paid for my undergrad. But they never explained to me how much it cost or what they had to sacrifice to do so.

They also didn’t teach me the value of high dollar expenses or how to continually search for scholarships.

I took out massive loans for my graduate degree that I am still paying back.

No regrets, I just wish I had a better understanding in my 20’s.

[Anna]

I would let them know I can help them with some of their college fees. I am not going to tell them how much. Just pull from that find when they need help.

I’ll also make sure they are applying for scholarships and grants they are eligible for and show them how to reduce their out of pocket expenses.

I’ll let them know that I can help them with a down payment of a house they can afford with their current salary.

But I don’t think I’ll be telling them the total amount.

Just help by pulling funds I have put aside for them if they teach out and need help. And when I die, they will get the remainder as an inheritance.

[Jane]

Our kids know they have $100k coming their way when they finish their undergrads as long as they are debt free at that time.

We also mandated financial reading at age 14 and have helped them manage finances and taught them all we know.

Time will tell whether ours is a good approach.

Haha.

[Farre]

My parents said if I took the scholarship to college, I could use the money to pay for medical school.

Having enough money to eat without needing to work on top of research, clinic volunteering, and needing top grades in my courses at a demanding university helped me focus on the goal of what came after college.

If you’re applying to medical or law school, 20-hour-a-week cafeteria duty puts you at a disadvantage.

[Megan]

I was not told how much was in mine (it ended up being less than $25,000) and I wish I had.

Had I know how little was in there, I would have made different choices but I was always told I had a “lot” of money coming to me at 21 so I made bad choices thinking there would be money to pay it off.

I’m not saying telling your kids the actual amount, especially if it’s significant, but maybe give them a hint so they can make accurate financial decisions.

[Patty]

How old is kid now? Some people are savers vs spenders no matter nurture or nature. Some have drive and ambition while others don’t have as much.

I still what lessons you can but also let them play their own cards.

I’d say vague references vs specifics. Ya’ll will have a lot to go through when it comes to filing applications and FAFSA forms. ‘Try for scholarships but if they don’t work out we’ll find a way’. ‘Get a job near campus but if some specific expenses come up let us know because there is finding available.’ Also make sure you are planning for increased costs of rent or insurance.

I’m hearing some scary high figures for teen drivers.

Also evaluate if it makes sense to buy property near campus, some find that to be a valuable house hack opportunity.

[Burgess]

Ours do not know and they will not know till the end.

We decided when they hand us their diploma we’ll hand them a check to pay off for their student loans.

[Andrew]

My kids know they have an account that all their monies (bday, xmas etc.) go into and I contribute monthly.

I teach them about the market and make them work for money (mow the lawn, clean the house etc.) and pay them $5 so they know money is not free.

I then take 50% of anything I pay them to teach them about savings.

If they blow through the UGMA monies later then I have failed.

[Chang]

Why at 21? Seems young for that much money. You could base funds on milestones like I’ll pay for your college if you keep got GPA above at 3.0 and you’ll get a sum of money after graduation, etc.

[Alicia]

Our kids are young (7 and younger) and we do weekly money talks / lessons. I show them often what’s in their accounts.

I trust that through our talks, they’ll learn about the value of money and the reasons we made the choices to save for them and hopefully I’m raising them to appreciate what will come their way rather than feel like they should just blow it because.

[Alicia]

My kids know nothing they think I’m broke. I’m not they are!!! We shop sales and use coupons. They know I pay for grades and that’s their job.

That said I have a 529 and dad has military benefits they can use for college.

Whatever is left they will know and receive after graduation.

[Andrew]

My parents paid for my education and I still worked my ass off.

If anything, because I knew it was their money, I could not afford to screw it up.

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