While most parents of teens feel the need to teach their teens money management skills to prepare them for leaving the nest when they head off to college, Chris and I have a bit of a different dilemma.
When Angeline was ten, her biological father passed away. We receive a survivorship payment from the social security administration each month, which we are to use to cover her expenses. We have been blessed in that Chris earns a nice salary and we do not always need to use all of those funds. At the end of each year, we transfer over whatever we haven’t used to a savings account for Angeline to help her pay for her college education – and whatever other expenses she will have once she turns out and starts out on her own.
In addition to that savings, Angeline’s father had a life insurance policy, which the company rolled into an annuity because she was under the age of 18 at the time of his death. While it isn’t making much money, the annuity itself was for $25,000, which she will have complete control over when she turns 18.
Angeline is 15 now…that gives us 3 years to teach her how to manage money before she gets her hands on that annuity! I was just showing her this Planning for Living Workbook from Genworth Financial, which I think will really help her figure out how much she needs to get through her college years.
Chris and I were thinking about contacting a financial advisor to help Angeline get ready for college, but after reading this article about how women tend to handle their money better as they get older I got to thinking…I can help her plan out her budget, investment and savings when she turns 18. I am much better equipped at handling our budget, investing and retirement planning than I was ten years ago, and I have already learned about all of the mistakes she would likely make on her own!
So why not use all of my knowledge and new financial savvy to help teach Angeline about money before she finds herself with a heavily-funded bank account?
Angeline is going to college, mostly likely out of state, and while I am sure we will still have an influence over her, now is the time to teach her the importance of budgeting, saving and thinking about the future. She already knows the value of a hard-earned dollar, and likes to save some of the birthday and Christmas money she receives each year. It wouldn’t be too far of a stretch to help her understand how important it is to manage her inheritance wisely!
Do you have teenagers who might be expecting a windfall when they become adults? I would love to hear any advice you can give me!
Information for this post is sourced from Genworth Financial in partnership with the SheHeard Influencer Network. All opinions are my own.
So sad for Angeline. At least she has you and Chris to take care of her. Good guidance is priceless.
It is so important for her to be prepared. Money in young hands can be a blessing or a curse.
You’re such a good mom Jenn.
No windfall here, but we’re still trying to think how to save for three. Regardless of circumstances, it’s daunting.
I think it’s so important to teach kids the importance of money. Having that much money all at once can be overwhelming.
It’s so hard to imagine you having a 15 year old, you look so young! We have custodian accounts for our son, which means at 18 they get whatever is there too, so we need to teach them money smarts also.
All I know is, I wish I had listened to my parents when they told me to save 10% of every paycheck. Even when I was a teen and worked fast food jobs, I could have saved $25 from each of those $250 paychecks lol
It’s always good to be prepared. I think it’s so important for kids to learn.
That is an interesting dilemma. Our daughter isn’t expecting a windfall, so no advice here on that front. But when we had our wills made, our lawyer suggested (and we had the will written that way), that if we both die, she inherits the estate (she’s an only child too) in two parts. Half when she’s 25 and the other half when she’s 35. That way if she ends up blowing through part of it when she’s young and a convertible looks like a better purchase than a mortgage, she still has some coming to her when she’s hopefully wiser and would use it better. She’ll be 17 this year, and she’s proven to have quite a head on her shoulders and am not very worried about it, but you’re right having so much money all at once at your disposal is certainly tempting!
I hope to teach my girls about being wise with their money as well!
You’re very wise to start preparing her now! I didn’t come into any money when I turned 18- in fact it was the opposite as I struggled with working full time & college full time, and add in that no one taught me anything about money & it didn’t end well. So Angeline is lucky to have such a caring family that wants her to start out knowing how to handle herself!