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Children’s Financial Independence – My Thoughts

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Three of my five children, my three sons are now wholly independent of me financially. And the remaining two should be standing on their own two feet within the next 12 months or sooner.

They Grew Up Different

Now let me caveat this post with this background, we are not the “normal” family.

The Twins

My two oldest children were raised in adject poverty until they were placed with me by the foster care system a few weeks before their 13th birthdays. They are in their mid-20s now.

My Eldest Daughter

My oldest daughter was raised in a government funded, single parent home where resources were limited at best; however, she always had a roof over her head and regular food. She moved in with us full time when she was 16.

My eldest daughter and I have a very different relationship then the others because of how she came to the family, her age at that transition, and her ties to her biologic family. I’ve been more of a mentor versus mom. This isn’t a judgement statement, just a perspective to be understood.

The Youngest Two

Finally, my youngest two children are my biological children and have lived through all the ups and downs of this crazy life with me.

All this to say, that there are three very distinctly different money journeys, relationships and expectations of money within my children… (not sure I said that correctly, but hopefully you understand my point.)

silhouette of mom and child

The Path to Financial Independence

From the birth of my first daughter, my first child, I had already decided upon or at least had loosely decided on the financial support I planned/hoped to offer my children through their life.

The Formative Years – Allowance

As soon as my kids were old enough to start asking for things, they started receiving an allowance. And that continued until they got their first jobs…all around the age of 15.

There were times when I tried to mandate how this money was used. Typically 10% to savings, 10% to giving, and the rest at their discretion. But I was not consistent with this. And frankly, it was a result of my upbringing rather than something I firmly believed in. Being inconsistent at during this phase is one of my regrets as far as money and my kids. (More on those regrets to come.)

The Teen Years – Partial Independence

Once they were old enough and had the time, they were all required to get part time jobs. And they were all required to save 10% of their income.

I provided each of them with access to a car, often shared access, paid for their phones, auto insurance, and paid for gas for the cars. I ended up limiting my spend on gas to one tank a week. All that to say, that for the first years of their income earning years, other than saving, they controlled their money and spending.

Setting Post-High School Expectations

From the time they were little, or joined the family, we spoke about the expectation of post-high school education or job training. We talked about the importance of having some sort of job obtaining skills or plan for college as they stepped into adulthood.

I encouraged each of them to evaluate what was important to them. And to makes plans to chase those dreams before taking on responsibilities such as families, debt, and so on. Things such as travelling the world, buy the name brands, buy the car, etc. Whatever it was that they found important or loved.

(I’ve written before that prior to the twins, I only touted the college route. My experience with the twins expanded that discourse to trade schools, medical training, military and more.)

In these conversations, I always promised financial support while they pursued high learning, trade school, or really any kind of training. And we also focused on how could each of them pursue these educational/job training opportunities and come out on the other side debt free. That was the goal for each of them. And the route to achieve that was different based on their path.

Adulthood – The Launch Plan

As the kids entered adulthood, I continued to support them while they were pursuing additional education opportunities, whatever that looked like. Some went straight through a program. Some were in and out and in and out. And one completely opted out of any post high school program, at least for the time being.

In all cases, I offered limited support for 6 months after they finished their program of study or after the 3 start/stop. At that point, if they were still living at home, I required a nominal rent be paid ($250 per month) and they took over paying their own bills that I had covered up until that point…auto insurance and phones primarily.

And Now They are Launched

All three of the boys are out of the house, out of the state, and full functioning adults. Fully independent of mom’s money. There have definitely been some bumps along the road. And some one off support offered by mom. But they are doing it. And doing well! I could not be more proud or more impressed with how they have learned, sometimes from my failures and sometimes from their own, and pivoted to better decisions.

Is every choice they make a solid financial one? Of course not. But in every case, they are WAY more knowledgeable about money, debt, credit, credit scores, and investing than I was at their age. And they are killing it! I am so proud of the people they are. And ultimately, the paths they have chosen and the dreams they are chasing. Each their own. I will always be their biggest cheerleader.

 

Hope’s Debt Update – September, 2024

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Another step closer. And you will see new dates on the table for the remaining debt. They are still kind of soft dates, but totally achievable based on my forecasting. But will certainly firm up by the end of the year.

Debt DescriptionOctober, 2023 TotalInterest RateMinimum PaymentCurrent TotalPayoff Date (Est)
CC - Frontier$3,85729.99%$130$3,575October, 2024
Dad - New Furnace$2,6000%$0$2,600
January, 2025
CC - USAA$5,00019.15%$135$2,599November, 2024
Student Loans$22,1212.875%$22,749September, 2025?
CC - Apple**$500Paid off every month$0
CC - AMEX$89429.24%$0$0Mar, 2024 - Closed
CC - Sams$1,10629.99%$0$0April, 2024
Personal Loan #1$2,5000%$0$0July, 2024
Personal Loan #2$2,5000%$0$0August, 2024
CC - Wander$1,63029.24%$0$0August, 2024 - Closed
CC - Amazon$1,49729.99%$0$0September, 2024
Total$44,206$265$31,523

Next Target – Frontier Card

Did you see my plan for the Frontier card? It was presented somewhere previously. Thoughts? Smart or dumb move?

To summarize, I had planned to pay off the Frontier card in October and then use it for Princess’ wisdom teeth extraction. Then pay it off in November and close it then. This will essentially save me approximately 1/2 month in interest charges.

However, I thought through it some more. And have decided instead, to just pay off the Frontier card this next month (October) then instead, use my remaining card USAA instead for the surgery, then pay it off in it’s entirety.

Followed by Final Personal Loan

This month’s update delays my payment plan on the final personal loan, the one from my dad. He loaned me the money to replace my furnace back in February. I plan to make my first payment in November and pay in full at the beginning of February right now. My plan continues to evolve as I make more money. So none of this is in stone…but know that my goal is to get all debt paid in full ASAP with a current focus on my consumer debt.

The Final Credit Card

According to my forecast, the first month I have $5,000 outside my regularly budgeted items is March, 2025. That is why I have set the date for the USAA CC to be paid off in full for that date. I currently pay the USAA CC about 1/2 way almost every month to cover bills – phone and car insurance. That takes care of the minimum payment and saves me some interest every month.

I do plan to keep this card open. It’s my oldest account. But come March, I should be able to stop carrying any balance at all. Maybe earlier, but that’s why I’m seeing right now.

This was my plan when I first drafted this post. But have shifted my idea based on the update under Frontier.

School Loans

Come the new year…the focus will turn to my student loans. 21 years after completing my masters program, I will finally get it paid off. I’ve added a tentative date to that debt payoff too. But it is soft for now. I needed a target on it!

Have I missed anything?