It may seem to soon to think about this kind of thing but I like to be prepared and I like to think about saving money so Jason and I have already started discussing our plan for teaching our child about money. My parents were always very careful with money and I think they brought up myself and my sister and brother to be pretty good with money. My sister is an amazing bargain hunter and my brother can squeeze a nickel til it cries. Although it is possible that I could be perceived as looser with my money I think I’ve spent it on experiences that are meaningful to me, such as travel.
My parents were always very prepared for any financial situation that arose because of their savings and that passed along to us kids. I remember when I was about to go off to college my mother was discussing finances with me and she said since I was the oldest they had started saving for my college later than my brother and sister so they didn’t have all the money set aside. I always remembered that and it was always my intention to start college savings for any child of mine as soon as they were born (or perhaps before). I have read a number of books about family financial planning and have discussed potential plans with Jason and we have agreed on a plan.
To begin we will open a college savings account and deposit into it every month. Any money our child receives as gifts for birthdays, holidays, etc for the first couple of years will go into that savings account. As our child grows older and starts to want money for things there will be an allowance given but divided into three parts, long term savings (which will go into the college account) short term savings (for bigger ticket items they want) and pocket money (popcorn and candy money instant gratification). Periodically, perhaps once a quarter, we will sit down with our child and show them how much money they have in savings for college. We want to help our child understand that the savings money is his and will be his responsibility when he reaches adulthood. As to what they will do with that money, we are not rigid about college. The child might decide to go to trade school (like my husband) or get an associates degree or they could use it for starting a business. We have decided to be open to suggestions. We will help them formulate a plan to take charge of the money and spend it wisely but we plan on this being the only money we give them for college. We want them to learn to budget and prioritize and to work during college (if that is what they choose).
I think that “great recession mentality” has set in with me already. On a day to day basis in my current job I am not really using my college degree and I have a lot of friends who are paying off student loan debts and questioning what they got out of the experience. I was fortunate that my parents paid for me to go to college and I think it has been useful to me in the past and will be useful in the future but I can’t imagine what it must feel like to be a recent college graduate right now looking for a job and trying not to think about the student loan payments that are going to start happening in 6 months.