3 Important Adulting Lessons I Taught My Daughters This Summer

September 22, 2017

A few years back I wrote about my daughters’ experience with having college roommates and the perils that can come along with that. Well, they did learn some valuable lessons about reading a contract before signing it and that it’s not always good to live with friends!

I’m super proud to say that one daughter graduated from The Ohio State University in May and accepted a nursing position at a local hospital. Her twin sister is in the home stretch and will finish in December so they decided to move to a smaller place and eliminate the roommate drama.

Letting them figure it out

I purposely took a step back during all this transition because it was time for them to handle the tasks I normally would do such as arrange the movers, help pack, and review the new lease – what my daughters call “adulting.” Their move was stressful – what move isn’t? – but fairly uneventful. And they learned a lot.

Teaching them to adult

But there are still some areas of adulting where they need my guidance before I’ll feel comfortable just letting them figure it out. Here are three that I focused on this summer:

1. Read and understand ALL your employee benefits. My daughter accepted her full time position in June and had thirty days to review and enroll in her benefits. Luckily she has a mom who works in financial wellness and can help her decide what makes sense for her.

For instance, she declined her medical insurance because I will continue to carry her on my company’s insurance (thank you Financial Finesse and the Affordable Care Act), and she would have stopped there if I hadn’t spoke up.

I suggested she read all the benefits and think about what else is important for her. She eventually enrolled in her 401(k) (10% at my insistence) and pet insurance for their 14 year old dog Cosby. Smart.

2. Think about the longer term. I really don’t like nagging, however it’s necessary sometimes when the outcome is important. My newly hired child learned that the hard way when she received her 1^st paycheck and realized that her 401(k) election hadn’t been processed. She emailed HR about the mix-up, got no response and gave up. That wasn’t going to work for me. I nagged her until she went to her HR department and had a representative correct the issue.

Why did I stay on her about this? Most new hires have 30 days to make benefit elections then must wait until open enrollment later in the year if they want to make changes. My daughter could have missed out on six months of 401k contributions plus the employer match – that’s $3,250. But over 40 years at a 7% return, that could grow to over $48,000! Now she understands why I pushed so hard for her to follow up.

3. Use your phone for more than texting and social media. Mind you, I appreciate the convenience of texting and using apps to stay connected, but when did talking on a cell phone become taboo? Maybe in 15 years when the Millenials and Gen Z’s are running the world this won’t be quite as important but for now, it’s sometimes necessary to call a person.

After their move, my daughters needed to update and pay their home and auto insurance. Somehow wires got crossed and the insurance was cancelled. My daughter emailed their insurance agent once she realized they had no auto insurance but didn’t get a reply.

She happened to mention this to me and I asked, “Did you call them?’ Her reply, “No.” My not-so-calm response was, “What?? This is urgent for you, so call the agent, leave a message if they don’t answer and get some insurance!” That did the trick.

What it means to adult

Adulting means taking responsibility for your actions and more importantly, the outcome of your decisions. Experience is teaching my daughters the importance of these lessons and thankfully they didn’t suffer any negative consequences.

Now if only my daughter would realize how much she spends on lattes, but that’s a lesson for another day. Perhaps Doug can help me when I’m ready to tackle that one…

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How I’m Teaching My Polar Opposite Daughters About Money

August 25, 2017

If you’re a parent, you probably know that sometimes you can be around your kids and wonder just how in the world they are actually related because they are so different. As a father and financial planner, I have really seen that difference in my two daughters this past year. My girls are teenagers and both are now working part-time and taking on more financial responsibility. That is where the similarities end.

Polar opposite financial personalities

My oldest daughter has a great work ethic and is a practical shopper when it comes to big ticket items, but she struggles to really plan or track her daily spending at all. My youngest daughter, on the other hand, will work only as hard as she needs to in order to make money and that’s it. When it comes to spending money, she values fashion over function and plans her expenditures down to the penny. Total opposites.

So how does a dad help these two very different daughters reach the same goal of financial well-being? Here’s how I am approaching it with each of them.

Work smarter, not harder

I don’t worry about my oldest daughter working hard enough. If things get tough, I know that she will do whatever it takes to make ends meet. As a result, my advice to her is not to work harder but to work smarter. She needs to take a look at the big picture before diving in to a project or a job to see if there are ways to be more efficient or even farm out the easier, less costly parts of a job.

Letting perfect get in the way of good enough

For my younger daughter, I know that she will have analyzed things from every angle to make things easy and efficient for her. Her challenge is that sometimes she lets the perfect get in the way of the good.

For example, she had a host of reasons for not wanting to work at the pool this summer – one of the few jobs that would take her before turning 16 this fall. She eventually found a job that was more to her liking, but she ended up only able to get 20 hours a week instead of the 32 per week she probably would have been able to get at the pool, which limited her earning potential. So for her and analyzers like her, sometimes it is better to take the good opportunity instead of waiting for the perfect one.

Finding a way to keep the little things in check

My oldest daughter is pretty good about finding a good deal when it is a big ticket item, but the little things kill her. When it was time to find a car – which she had to pay half of – she did extensive research and even though her dream car is an SUV, she realized that a compact car made more sense and found a great deal on a Ford Focus that should last her well into her young adulthood.

Day to day purchases are just the opposite – the debit card and apps like Starbucks make it very easy for her to fritter away her hard-earned money on convenience and impulse buys. She needs a better way to track her money.

She doesn’t need to spend hours each week planning out her spending, but I’ve suggested that she find a “hack” to make things easier like an app on her phone or using envelopes to limit impulse spending. Perhaps one of these six ideas from my colleague Kelley might help.

When fashion gets in the way of function

My younger daughter is constantly looking for car options… and she keeps looking for champagne cars on her beer budget. She likes crossovers but the challenge here is getting her to realize that they are more expensive so she would have to buy an older, higher mileage car that likely won’t last as long. Plus they would cost more to insure and burn more gas. She may feel cooler now, but will she still feel that way having to buy a new car all on her own in her very early 20’s? The jury is still out on whether she’ll listen to me or go with her penchant for fashion over value.

On the plus side, she has planned her day-to-day spending like a pro. She has literally budgeted every paycheck she is expecting between now and March to parcel out how much will go for the car, gas and her drama department trip to New York, while she plans to use her tips for fun money.

She puts her debit card away to prevent her from using it for impulse buys and only uses the cash tips for her spending money. I have given her a lot of praise for her planning and how she is managing her daily expenses.

The challenge that I talked to her about is over-planning – an issue that I have dealt with. She doesn’t really have an emergency fund or any wiggle room, so when she doesn’t get enough hours or things happen, it puts her into a tizzy. Planners like her and I will always struggle with over planning but having an emergency fund or a “life happens” line item in the budget can help ease the stress of things not going according to plan.

Different girls, same end goal

Despite their differences, my girls are great kids and both have a lot of money skills. The different personality traits mean that they may need different approaches to get to the same goal but I expect them both to do well in life.