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Financial Planning for Kids

GC and Rosie and I were out walking on Saturday afternoon, when we encountered the following scene.

Two boys, perhaps eleven or twelve years old, had climbed up on top of a structure by the fountain in Centrepoint Park. They were perched up there dispensing financial advice to  a somber-looking  boy of about eight, who was sitting on the ground, listening attentively.

We missed the first part, and the last part, but we caught the middle. Here’s what we heard:

“…then go to university but keep living with your mom and then get a good job but don’t move out, keep living with your mom until you’ve saved enough money to buy a house. Whatever you do, don’t borrow any money, don’t use credit for anything, don’t have any credit cards, you don’t want any debt at all, this is very important. Then after you buy your house, you can move out of your mom’s house and get married and…”

I don’t remember thinking about stuff like this when I was a little kid. Did you? Are these kids unusual, or do kids think about these things now?

I wish I’d stopped and asked some of the many questions that have since occurred to me.  I’d also love to  follow up in 20 years and see how things have shaken out for these three boys.

I have questions for their moms too. For all you parents out there: Would you agree to the part laid out for you in a plan like this?



29 comments to Financial Planning for Kids

  • Cute kids! I, too, don’t remember thinking about this kind of stuff at that age. But I think times have changed Zoom. My 16-year-old son has an investment portfolio that he asked for as a birthday gift. We combined several family gifts to get him started. My 13-year old has a substantive bank account (babysitters get minimum wage these days!)and they both have debit cards they use wisely. There’s a lot more info out there nowadays that kids can access, I think.

    • Wow. That’s pretty impressive. Are their friends also financially savvy, or do you think this is something that you, as parents, have instilled in your kids?

      • Some of their friends are equally savvy…although it’s mostly the boys, I’ve noticed. And yes, I think it’s because we’ve discussed these things a lot with them (among other things ;). Re: living at home after graduation, I’d say a resounding “no,” unless of course they really need help, as in, serious health issues, sudden job loss, etc. And rent will be charged! How else does one learn?

        • Yup. My door will always be open to my son if he needs me. But not if he just wants someone to support him while he uses his money for other pursuits!

  • My answer to your question to moms: “No!” :-)

    • Ha ha! That was my instinctive reaction too. Because that’s not how the world works, and I don’t think I’d be doing my kid any favours by leading him to believe sponging off others (even me) is an acceptable financial plan.

  • Sid

    I think it’s awesome to hear about young kids talking about this stuff. Having financial knowledge is so essential.

    I have a friend who did exactly what they described and is now debt/mortgage free with a new BWM and nice 4 bedroom home at age 32. I kinda hate him.

    As a mom it’s a tough call. I don’t want my kids saddled with the debt I am from university/mortgage/credit cards but I also don’t want them to put off independence because of a fear of getting into some debt (nor to treat me/my home as freeloading opportunity).

    • I think it’s okay to help kids out as they’re getting launched, and there are so many ways you can do that. I agree with you about the freeloading. Personally, I’d feel a lot more comfortable helping with tuition than supporting him while he works and saves up for a house. But that’s just me. I also think it’s important to help them differentiate between useful debt and harmful debt.

  • Um, this mom says “so very much NO.” I might even raise that to “Hell, NO!”

  • Sid

    Err, BMW (as in the car) not BWM. Clearly I can’t even afford to spell it right.

  • Kathy

    I think it is solid advice, though i would/ will charge rent when the kids get jobs – percentage of wages if they are not in school I think. And you know, my house, my rules ( which are not stringent) If they are like me. they’ll want out anyway 😀

    • See, now that’s an interesting thing. I think when I was a kid, kids wanted to move out asap because living at home wasn’t much fun. There were rules and chores and bossy parents, and that’s not even counting the icky stuff. But these days, it seems many kids don’t have any reason to leave home. No rules, lots of amenities, everything’s free, they’re allowed to have their girlfriends or boyfriends sleep over, they’re allowed to drink at home, and their mother cooks and cleans for them. Why would they (ever) leave?

      I don’t think kicking them out is right (under typical circumstances) but I don’t think there’s anything wrong with charging them rent or making sure things aren’t so perfect for them that they’ll never choose to leave the nest.

  • Sheila

    I guess I was a meanie because when my kids were finished with school and working I expected some room and board money and I would take no crap about it or they’d hear about how difficult it was for me since their father left me. My daughter moved away to live with her fiancee at the age of 20 and my son was about 19 when he moved out. I miss my kids but I don’t miss being a taxi service. Both my kids learned a lot about fiscal responsibility by living on their own.

    • I would think that 19 or 20 would be the normal age for kids to move out. Or maybe a little older if they’re doing post-secondary education in the same city. However, I remember reading a few years ago that 30% of single males between the ages of 20 and 33 were still living with their parents. (The percentage for single females, interestingly enough, was substantially lower.)

    • Wow. 60% of Italian 18-34 year olds live at home, and more than half of them don’t hope to move out in the next 3 years! That’s shocking.

  • Carmen

    DW, I was thinking the same thing….😄 Actually, I have two friends who are still supporting adult children. It baffles me…. One friend thinks that if she’s not there for her son, he will end up making horrible decisions (she’s right but hell…..) while the other friend thinks that her children are late bloomers and will eventually decide to fly on their own. I can’t even sit and listen to their stories…when they start, I ask that they talk about something else.

    • Carmen, I have an 86 year old friend who is still looking after her 57-year-old son. He tells everybody that he lives in his mother’s basement because she’s old and needs his help, but everybody who knows them knows it’s the other way round. He’s a pathological liar and a user and he has no conscience. Even though she’s pretty shrewd about everything else, she can’t give up on him. She worries constantly about him and can’t relax unless he’s in her sight, because then she at least can see what he’s up to. It’s very sad.

  • DW

    There is certainly a cultural divide between NA family values and other cultures regarding children living at home until married, etc.

    If the shoe was on the other foot, how many 30-40 something’s would allow their aging parents to move in with them? Off to the retirement home is the first thing my wife said (and she was talking about her own parents, not her inlaws!) Yet for many cultures it is expected that the younger generation will look after the older generation and multigenerational households are common.

  • Carmen

    Indeed. So….if children live at home forever, it would only be fair that the elderly parents move in when living independently becomes too hard.
    In my neighborhood, a young man, his wife and little child have moved in with his parents. It is not a temporary arrangement. The grandparents get to help raise the child while the young mother is at work. And you are right about NA family values. The elderly parents of this family are new Canadians and their son is first generation. But this is not a case of young ones mooching on their parents….that’s another story…..

  • Joanna

    Three generations are living under my roof – my almost 90 years old mother and my young adult son. Sometimes I grumble about being perfectly sandwiched between the two of them, but I like our family dynamics. The house would feel empty without either of them.
    And, yes, I am a new Canadian.

    • Joanna, I’m curious – have the three of you always lived together? Or is this a relatively new arrangement?

      • Joanna

        My mom lives with me for the last 18 years or so. My son came back to live with us after graduating from Queens. He is pursuing a dream of academic career (nowhere near yet) and I support his dream. We are certainly not an American mainstream, but that does not bother me a bit.

  • well we live on a farm (and now that we have our feet wet we are looking to expand in a few years) so if they’re providing labour they can stay as long as they want (when they leave we’ll be looking at filling those spaces with woofers! room and board and an apprenticeship) I don’t think the nuclear family ideal of moving out and being independant is a very sustainable way of life actually. My kids are not nearly as savvy, we’re a store your money in a mason jar kinda family all around though.

  • Why do you think it’s not a sustainable way of life?

  • Because of the actual resources involved – heating multiple houses needing multiple modes of transportation. Geez, everything that means we are all expending resources to “do it by ourselves” instead of cooperatively. And really this isn’t an urban/rural divide. Urbanites lived in multigenerational housing situations and shared resources until after WWII and the capitalist machine would grind to a post war halt unless they did something pretty drastic – so they created the suburbs. It isn’t about what we can individually afford either, it’s about what the planet can sustain and in a post peak oil world the transition is going to require that we return to a more cooperative way of life…and that is conveniently built into family life.