22 Replies Latest reply on Feb 3, 2011 1:27 PM by JerryD

    Financial Education

      Our son is 35 years old and lost his job about 1 year ago due to his own fault. He has three chlidren 13, 10, 8 and we agreed to finance his continued education (college) plus child support. in form of a two year loan.

      His financial savyness is questionable and we are afraid that we have excessively enabled him.

      We appreciate any open and frank thought and any recommendation, how to improve his "financial skills"

       

        • Re: Financial Education
          D1953
          I'm a retired financial planner, and reading between the lines of your post, I think you've answered your own questions.
          I hate to be harsh, but you need to be the ones to cut the apron strings here, as you're not doing him or yourselves any favors.  You indicate he lost his job through his own fault, so I am assuming there are no unemployment benefits being paid. 
          He needs to get a job - any job.  His first obligation is to his children who need not only his financial support but a good example of how to live as a responsible adult.  Plus, he can take courses online through any number of distance learning colleges at times that don't interfere with a work schedule.
          As far as learning financial skills, there are countless websites he can access if he's serious about getting his act together.
          Check out this link for information on free upcoming financial clinics for those in need:
          http://www.cfp.net/media/release.asp?id=245  (you may need to copy and paste this)
          Also, if anyone else  is thinking of making a loan to someone, particularly family - it should be in writing, with a stated interest rate and terms of repayment.  If you've already made the loan, or if you've cosigned a loan (even a student loan) be sure to have a term insurance policy on the borrower's life in the event something happens to them. 

            • Re: Financial Education
              cafenoir

              1953, you used the key word: ANY JOB !  Today people generally go unemployed bec. they cannot find a job in specific specialty, unwilling to do ANY JOB until the "good" job with the "right salary" is found... very spoiled.  Ever clean toilet until...?  Then we scuff at the illegal aliens who have to do that work.  Imagine the unemployed going out to do ANY JOB out there until the mess the government/big banks created improves !  The problem of unemployment would be resolved almost instantly, and illegal aliens  would not find those jobs ! 

              Yes, I know, Americans don't live like that, right?  Good luck; we'd better wake up to new realities.

                • Re: Financial Education
                  cyclotour
                  This reply presents the crux of the American high school or college educated graduate's dilemma, should I work at a job below what I feel I am worth or what my implies what I am worth or should I wait for the ideal job.

                  Cafenoir is correct in my opinion. I took many "low status" jobs during my working career. I worked as a dishwasher, cook (not a chef), personal servant, beekeeper (agricultural migrant labor), etc. It was not pleasant work all the time. I began and accomplished an Optician apprenticeship in my late thirties & early forties with the object of opening my own shop. It was a time when the chain optical stores swooped in and grabbed all the bread & butter customers. The Optician pay was low.  By working less than 180 days a year as a public school per diem substitute teacher I earned a higher income than working 260 days a year as an Optician!

                  It is possible for 1953's son to apply for financial grants to retrain for another career even if he is not collecting unemployment insurance (UI). By the way, unemployment insurance is one of the finest benefits provided to qualifying workers, and only those who actually worked for a given (it varies by state) period of time can collect unemployment insurance. Conservatives and business people are nuts to even suggesting doing away with this benefit or reducing the payments. No one is getting rich on unemployment benefits.

                  It is also possible for 1953's son to apply for unemployment benefits after obtaining an other job and working at it for x or y number of weeks. Each state has its own UI laws. 
                    • Re: Financial Education
                      JerryD
                      cyclotour said...

                           
                                This reply presents the crux of the American high school or college educated graduate's dilemma, should I work at a job below what I feel I am worth or what my implies what I am worth or should I wait for the ideal job.

                      ...
                           
                                      
                      Unfortunately, many as they advance in age, even their 40's, will get to test this at a very personal level. I know from personal experience in the last 10 years of my career. I also saw many others in the same revolving door of employment and unemployment in that age range. I went through some pretty long periods without any pay or doing things at a fraction of previous pay. I use to marvel at the qualifications of many people doing things like census work, national school testing, substitute teaching, etc. at levels way below their training, experience and of course pay level and in some cases along side a few that we found couldn't even pass the FBI security check.

                      I told all of the kids that they need to show continued progress in their career and be at the next level by the time they are 40 or the working world will discount and disregard them. I'm thinking that I'll have to add to the speech for the grandkids. I'll have to add something like always have at least a year's worth of income on hand and increase that as you get older with house, kids in college, etc. And, oh yeah, constantly keep your eyes open for low paying but income producing temp jobs that will fill in when the unemployment goes away and still no job. Also, never think that you can keep working forever unless you are willing to work in a totally different area than your expertise and then at much, much lower pay and probably a part time basis.

                      The US work world has become very unkind for that 1953 or even 1960's person.


                  • Re: Financial Education
                    steve544

                    You are right on D1953. Like with any other profession, you have to educate yourself in order to seek and obtain good advice from "professionals".

                    Unfortunately we have a culture now in which a prolonged adolescence lasts into the 30s! It took me a long time to convince my wife that supporting her son in his 30s, unemployed college drop out, was actually ruining his life by removing any incentive to take responsibility for his actions (or lack thereof). I had to be the "bad cop". But when I refused to let him move back in with us, he figured he better get a job, since mommy was no longer paying for his apartment and living expenses. Now, 9 years later, he has grown up into a real man, has a good job, a wonderful wife and a son about eight months old.

                    I see this epidemic of adult children loafing in the homes of their well to do parents. Not good for them, their parents and ultimately our country.

                  • Re: Financial Education
                    That sounds like a reasonable help.  I will make sure that he is seriously taking his classes seriously--acceptable grades, attending classes, at least.  Also, that they get rid of extras-extra car, club memberships (let him take a hike instead of a gym), shopping for clothes when he has enough, paid recreation and amusements (let them visit the parks), more toys (I am sure they have a roomful of toys already) and eating out.  Cooking at home is much cheaper than any fast-food place.

                    A grandma
                    • Re: Financial Education
                      JRR

                      My sympathies; but - that's the way it is with Generation X-ers (and Generation Y-ers and New Mellinnials)

                      If you can afford, offer to help your son acquire the kills he needs to support himself in the lifestyle he prefers - but set firm boundaries.  Like "I can subsidize your education up to $___, provided you are commit to ABC" - if your son is one of those who expects unlimited support with no strings, you have to be totally open and candid on how you feel and what your finances permit.

                      • Re: Financial Education
                        Chrysalis

                        I understand your dilemma-- you don't want to "enable" (i.e., enfeeble) your son, but you don't want him and his wife and kids to starve, either. I suggest you do 3 things: 1) stop paying for his education-- he doesn't have the luxury for that right now. He needs to get a JOB; 2) limit your support to "matching funds"-- he shows you a paystub and you will match it with an equal amount of money; and 3) your financial support is never in the form of cash, only gift cards or direct payments. A gift card at the local supermarket, for example, or you reimburse him when he presents you with a prescription receipt. That way you will be helping to make sure he and his family eat, but you won't be subsidizing unnecessary expenditures.

                        Tell him to man up. Tell him you have confidence that he can pull out of this. Offer to help him and his wife review their budget and find places to economize. If they won't do that,  refer them to a free credit counselling service. He may well get very angry with you, and you need to be prepared for that. But, in the long run,  he will feel proud of himself that he found a way to solve his own problems with only a little help from you.

                        • Re: Financial Education
                          JerryD
                          You don't mention other kids. If you have any others, I am sure you have seen a range of maturities and money/life skills. It is a challenge for a parent to see one handling certain situations with ease while another just doesn't seem to get it.

                          Maybe my sample is small, but some boys (men) don't seem to have things under control as well as the girls (women), sometimes for a LONG time. Usually a bit of real life where they have to handle it wakes them up and gets them going. Not always.

                          When it comes to money (and some other necessary skills), I have an attitude that says "you makes your choices and you pays the price". I have bailed out most of the kids and unfortunately continue to do so. I will never let them go under. However, I have one very firm rule that I enforce whether I need it or not - you borrow from me then you pay me back, no exceptions! I have never charged any interest and have never written an agreement down. I do, however, give them a spreadsheet that identifies each sum they were given and when and suggest that they pay it back over some reasonable time frame like a year or two, depending on the amount .

                          Even though it broke our hearts, we even told one very natively smart kid that it seemed like the same college courses were re-appearing. Told him he was on his own and he still hasn't finished the last 12-15 credits for that (mandatory) degree. At a certain age, they will create so many demands on their earning power that a parent cannot just keep throwing money at it. It's now their choice. We will pay for the costs up until the "you're on your own" speech.

                          One of the worst things IMO that you can teach your kids is to take other people's money for granted. The world does NOT work that way. They need to learn that or they are destined for some very painful personal situations. It seems that even the hard cases will learn with repeated strict rules and responsibilities, sometimes very slowly.


                            • Re: Financial Education
                              paulo985

                              I relate to all of the above in a very personal way. I have 28 year old son who is backliving at home in my studio apartment . He is 20-25 hours shy of his Biology degree and works part time in a fine retaurant as a wine and bar manager.  He is financially a disaster owing the feds 40,000 in student loans , a car note, a health care bill, and a seperate note for his after the fed student loan.

                              My wife and I are trying to get our last 17 year old daughter through high school andoff to college. We both  want to retire from 30 years of teaching  in 6-7 years, but I am so afraid of what will happen with my hanging on son.

                               I feel your pain.

                                • Re: Financial Education
                                  Operafan
                                  I too have a son, also twenty eight, just returned home after two years seeking work in another state.  He thinks that perhaps he will study for a master's degree starting next year or the year after, assuming that he can find full time work in the meanwhile.  He does not have good health insurance, nor do my daughter and son-in-law, both of whom work full time.  The economy is improving so slowly and unevenly that good jobs are hard to find and health insurance is still more of a difficulty.  My own resources, in retirement and with health problems to confront, are not much help to them.  The story must resemble those of many thosands.
                                    • Re: Financial Education
                                      kdfm31
                                      On the other hand, I have two barely over 30yr old sons, both with college degress and both now unemployed except for very sporadic PT work and searchine for work which is virtually nonexistent in central FL.  One was a teacher for 3 yr without a teaching certificate and had to leave due to state requirements.  The cost of university to do the courses required combined with the demands of his teaching job for very low pay made it impossible to obtain the degree he needed to stay.  He's a stay at home Dad this year while his teach wife continues in her field hoping she won't be cut with the measures coming to reduce education cost in this state.  She's in the Arts which is a vulnerable position.  The other son worked in food service throughout school and was forced to continue as he upgraded his skills with computer networking certificates.  Now, of course, there are no jobs in that field so he works part time at whatever can be found.  Not much.  I feel for these kids and can only hope they will find something eventually.  They are both frugal and manage money carefully and well but who knows how long they can continue in this economy.
                                        • Re: Financial Education
                                          JerryD
                                          I graduated from college in the 60's with a BS degree in STEM. Even then I couldn't believe how employers beat on my door to come work for them. Sorry, It isn't that way any more even in the technical fields. Since the early 90's the big employers have been moving off shore and finding highly educated workers in places like China and India. I also observe that employers no longer seem to be investing in educational upgrades for their employees to keep them current and productive.

                                          I read extensively and I keep seeing that women are educating themselves and hanging on to get their degrees. Men are not! And with the loss of manufacturing jobs, the next generation is slowly turning into female run families. I applaud the advancement of young ladies and never had a problem working with them. But IMO we as a nation need to start finding successful strategies to keep our young men engaged until their maturity and interests kick in and they follow through on educational tasks that lead to better lives for them and their families. 
                                            • Re: Financial Education
                                              jkom51

                                              A friend sent this to me last year:

                                              Bill Gates offers these tips to the nearly 4 million high school and college graduates heading to their first jobs this summer:

                                              • Life is not fair. Get used to it.
                                              • The world won't care about your self esteem. The world will expect you to accomplish something before you feel good about yourself.
                                              • You won't make $40,000 a year right out of high school. And you won't be a Vice president with a car phone until you earn both.
                                              • If you think your teacher is tough, wait till you get a boss. He doesn't have tenure.
                                              • Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flipping. They called it opportunity.
                                              • If you mess up, it's not your parents' fault. So don't whine about your mistakes. Learn from them.
                                              • Life is not divided into semesters; you don't get summers off. Few employers are interested in helping you find yourself.
                                                • Re: Financial Education
                                                  JerryD
                                                  jkom51 said...

                                                       
                                                            

                                                  A friend sent this to me last year:

                                                   

                                                   

                                                  Bill Gates offers these tips to the nearly 4 million high school and college graduates heading to their first jobs this summer:


                                                  ...
                                                  Good advice, and I think that I understood it. But Bill didn't speak or better yet teach at the high schools and colleges of the lads I hope that we can help. Did he package his advice so that teachers can use it to encourage and inspire them? We need to make some real serious modifications to the way we teach guys.
                                                  • Re: Financial Education
                                                    ldgpangeo
                                                    FYI.   Gates did NOT write this:

                                                    "The text is actually a pared-down version of an op-ed piece that appeared in the San Diego Union-Tribune on September 19, 1996. It was written by Charles J. Sykes, best known as the author of "Dumbing Down Our Kids: Why American Children Feel Good about Themselves, but Can't Read, Write, or Add."  Drastically edited by person(s) unknown, it began making the email rounds under Bill Gates' name in February 2000 and is still, as of this writing in 2005, far more often attributed to Gates than to Sykes — which is unfortunate, but, like the man said: Life isn't fair; get used to it." 

                                                    From  http://urbanlegends.about.com/library/bl_bill_gates_speech.htm
                                                      • Re: Financial Education
                                                        JerryD
                                                        LD, good catch. The title of the author's book sounds like it might support my statement. And then somebody goes and misquotes him on the media that is so dear to the males I hope that we can rescue.
                                                          • Re: Financial Education
                                                            ldgpangeo
                                                            I don't know Bill Gates personally, but when he has spoken publicly he presents himself as a much more careful and less blunt than this excerpt.

                                                            It was easy to find the true source by Googling the words "Bill Gates graduation speech".  These hoax or urban myth postings are very common place now days.  In fact, so common that you should assume it's not true until proven otherwise.


                                                • Re: Financial Education
                                                  JerryD
                                                  paulo985 said...

                                                       
                                                            

                                                  I relate to all of the above in a very personal way. I have 28 year old son who is backliving at home in my studio apartment . He is 20-25 hours shy of his Biology degree and works part time in a fine retaurant as a wine and bar manager.  He is financially a disaster ...

                                                   I feel your pain.

                                                       
                                                                  

                                                  Our oldest made a default choice of getting an associates degree in culinary arts after having too much fun in the 1st semester pursuing a 4 year degree that would have completed his associates in history. I was floored by his choice - he would have made a good teacher for the lower grades. This industry has proven to be a people-eating machine. The employers do not value the staff even though they interview beyond any reasonable level and the employees return the attitude by moving from job to job.

                                                  I don't want to start a discussion over the value of the military and I myself never served beyond a couple of years of ROTC, but kids these days don't seem to have any forcing function that makes them get serious to finish their studies with the resulting better employment opportunities. For years, I have been preaching to the kids that you need to advance regularly and be in a higher position by the time you hit 40. My experience dictates that employers and co-workers will just discount you and shelve you if you have failed this test. So being 28 or 30-something without having made this progression can and probably will have very negative effects on one's job prospects and financial status.

                                                  My point (which I have failed to make with some kids and successfully made with others) is to get going!

                                                    • Re: Financial Education
                                                      taconner
                                                      I've got a 25 year old daughter who has been going to college for 7+ years and is officially a junior. She carries a 1.8 average & while she has an excellent brain, fails to use it often. She works part-time as a waitress, but 5 - 8 hours a week doesn't pay many of the bills. She has always been a great underachiever unlike her older brother who is doing great financially & socially. She moved back home which greatly surprised us as she wanted out of here so badly; unfortunately she ran up tremendous bills off of about 6 or 7 credit cards. Since my wife & I both work & are financially secure we have helped her with her debts. Unfortunately, she wants to continue with college & I've about had it with paying tuition. She is now in love with a guy who is also 25 & about as drifty and has no clue when it comes to money. We've decided to help her with one more year of college & then cut the proverbial umbilical cord. I've tried to discuss finances with her as I work in the business field, but she has been bailed out too many times to care - I suppose. I think she &/or her boyfriend will likely have to learn the hard way, though I know both think their parents will assist them. I've already informed her that we will not pay for her & the boyfriend to live together which I think actually surprised them. When I then requested she make a list of her expenses & what was coming in, she quietly remarked they had changed their minds about moving in together. At 25 I was married & a military officer, it's hard to see her not achieving & carving out a career for herself.
                                                        • Re: Financial Education
                                                          JerryD
                                                          TA, kids have really a different mentality now. Like you I was out of the house at 22 never to return no matter what took place in my life (I cheated for a few months living with an aunt while going to school). Whereas I never served in the military which I attribute to 2 years of ROTC in high school that convinced me I would spend the time in the brig I observed several who did serve. I am now thinking that most kids need to put in some time in national service. It focuses them and gives them the discipline to run their lives in a more productive manner.

                                                          I told the last kid that the money train ran out when I noticed the same classes being repeated. It's a couple years later now and his personal situation is more stable so I have offered to consider resuming funding of the few credits that he needs to graduate. I am thinking that I will require that he maintain at least a C in a course before I put any more money in since I am still paying off the previous loans and will be for a few more years. The first good sign is that he visited the university to get a written graduation plan that is still in progress and he discovered that a catalog change may eliminate one of his stumbling blocks, a language requirement. Not to pat myself on the back but I carefully followed the news that the university was considering and actually did drop many mandatory courses in favor of letting each department determine those requirements. It was sure distressing to hear all of those "liberal education" types sound off about how a foreign language and other courses are essential - I had many of those and NEVER used them in my career.

                                                          Keeping my fingers crossed and suggest that you apply some tough love to precipitate a maturity upgrade in the young lady. Her attitude and age are very close to our situation. In my opinion you can't just let them go on and on. It's very expensive and I have convinced myself at least that it is not actually in their best interests.Then again, we as parents will worry extensively until they accomplish what we know from hard experience is needed to succeed before they are permanently lost in every day concerns and expenses and can't dig out.
                                                  • Re: Financial Education
                                                    ChrisR
                                                    Your son needs to go to classes in budgeting and financial planning -  I agree with "grandma" the all extras need to be cut out - and a strict budget needs to be set up.  There are a number of good financial programs - Dave Ramsey for one - equip your son, don't enable him.