I Don't Like The Way My 18-Year-Old Spends Money

Brought to you by the EveryDollar app. Start budgeting for free today. This is my 18-year-old son, Luke. He'll be graduating high school in just about six weeks. All right, Luke. And my question is, as a parent, how do you steward your growing children well without micromanaging their disposable income? In just a tiny bit of context, we are huge Ramsey fans. Luke has been working since he was 14, and our rule from paycheck one was you save 50%, you can spend 40%, and you give 10%. So he has a lot of disposable income, and I feel like he makes purchases that, from my perspective, are excessive. And yet, I don't want to micromanage him as his mom. Yeah. Well, you kind of, sort of, answered your question in that last statement. You are a mature, successful adult who happens to be his mom. He is an 18-year-old boy with, God bless you, your frontal lobe is still developing. Yeah. And he appreciates that. So I think that, from my perspective, is the part where you're going to have to release a little bit. Now, I'm going to tell you how I've got three. I've got a 20-year-old in college in Chicago who literally can't keep money in his account longer than 17 seconds. Yikes. And then I've got a middle son who has three grand in his account and won't spend it on anything. And then I have a daughter who's 17 who's just like the 20-year-old. So one of the things that I've had to, just as a dad, to learn is I can teach, I can show and model, and then I can console when they're broke. And so my oldest and my youngest, and this is not my wife's natural path. She wants to do what you're doing. How can I help control and do all this kind of stuff? And it's really wonderful. But I have found that my 20-year-old is beginning to learn the value of money because of the allocated money he gets versus his job, his part-time job. And when he's broke and he calls me, I just go, man, that stinks, buddy. And now it's kind of a joke. And at first, it made him mad. Now he kind of gets it. And now the calls aren't even coming in. And he is finding a way. And so I think in some ways, you've done a wonderful job and you got to let that young man figure it out. And I think the best teacher in life is failure. Luke, I'm curious, what set expenses, purchases are you buying that your mom would say is excessive? Like an iPad or a Cologne? Headphones? Anything. Is that within the 40% that's kind of allocated here? Can you get closer to the mic, Luke? Yeah, that's in the 40%, yes. Mom, what do you want him to do with instead of the iPad and the Cologne? Those don't seem outrageous to me. No, the iPad... He gets it. Ken loves a Cologne. I like to smell good. I'm not going to lie to you. Yeah. Well, it's like I would not spend as much on perfume or Cologne as he did. And it brought him great joy, but I was thinking, oh, that's a lot of money. And we had different upbringings. I grew up with very, very little and I've done pretty well for him. I think the deeper concern I have is I don't want him to be purchasing those items to impress others. And what I sometimes hear, and he's such a great kid, is, hey, I just got this Cologne and here's how much it costs, as he's talking to his friends. And I'm like, if you love it and you want it, then purchase it, but not for the praise or the affirmation from others. And I think that's very fair because that is a contentment loop that only though can be broken by you, Luke. I mean, honestly, that's something that can't be learned up here. That's something that's going to have to happen. So I'm a spender like you, so I feel you. So a question I ask myself a lot is before I make this purchase, I think, if nobody sees this purchase, do I still want it? So the idea of how much of my motivation is for others or for affirmation, whatever the thing is, but if nobody was to see it, how much of this is just for me? Because back to our point of rolling the eyes of the kid's birthday party or whatever it may be, people are going to value different things. And people are going to say, oh my gosh, I would never spend X on a car. I would never spend X on, like, and that's, it's not immoral, but that's people what they value. And that's not necessarily wrong, but if there is a belief that this thing is going to make me happy or what I get from it, if I impress someone with the price tag, right, with that example she just used, yeah, you'll be a rat in a wheel for the rest of your life running and getting nowhere. And if the newness of stuff is what funds your happiness, again, there will be deep discontentment for the rest of your life and you'll be chasing the wrong thing and the finish line keeps moving. You think if I just could have this, I can get that. Or if it moves this way, you know, I got to, I got to catch up to this. So that's something though that I think is learned through life experience. I hate to say it, but I think that's a spiritual exercise more than anything. But the math side, George, of the investment side, right, if you actually invested some of this money, what that turns into is, is pretty astronomical. And I know you're already saving a lot, Luke, which is great. Yeah, where are you saving exactly? All right. Is it in a savings account? Savings account. Okay. What is your, what's your, uh, your end game here? Are you wanting to build wealth and have some autonomy and freedom as a young man? Yes, absolutely. And do you see investing as a path to get there? Yes, absolutely. Well, let's crunch the numbers for you here. You're a young man, 18. You got all the time in the world on your side and you have time to fail. You got time to make the mistakes, but if you just went, Hey, you know what? What if I, instead of buying that next doodad, I instead put that in a Roth IRA cause you're earning income. Have you done that before? I have not. No. All right. I'm going to show you using our investment calculator. Can we do his real numbers? I'm going to use your real number if you're willing to give it to me. Like savings or what? Yeah. So you have nothing in retirement now and no investment accounts. How much can you put away a month into investing? I don't know the exact number on that. Can you put 500 bucks away? Yeah, absolutely. That seemed like a low number to you. You were like, absolutely. That's nothing. Hold on a second. Hold up. Mom is kind of going. Well, what I would say is the big purchase that will be coming soon is a car and we're going to do 50 50 and we've talked about it. Won't be a brand new car and there's, you know, there's reason because he, he has $15,000 saved. Wow. He's not. Yes. Yeah. But he's not getting, he's not getting a $30,000 car to start. So I think he would need to, I think probably about 200 to $300 a month would be good because it would be coming from his disposable income because he's also going to be going to college. He's got short term goals too. So George split the difference to 50. We're going to go to 50 from age 18 to age, let's say 60. All right. That's like an early retirement for most of America. 18 to 60, you put 250 bucks away into a Roth IRA and make that an on auto door. You never saw the money. It left your account when that paycheck hit. You don't have time to spend it. Here's what you'd have almost $2 million in that one account at 60. If you just did that, that's if you never got a raise, never put in more than that. And that's tax free withdrawals if it's in a Roth side, cause you used after tax income to invest it. So that's like take home pay. Think about it that way. Yeah. That's a pretty good life at 60 without really doing much. You sort of had it on auto and 250 bucks for you is a drop in the bucket with your, with the money you're already making at 18. Think about how good you're going to smell then. You can have your own cologne company by then. Yeah. So I just rub money all over your face. I think you gotta, you gotta think about the opportunity cost a little bit. And again, you're 18. I spent every one of my paychecks at 18. So he's doing astronomically well. So I think it's less about his spending issues. Yes. We need to dig into the motive and contentment, but I think mom, there's some control issues. There's some scarcity stuff that you might need to unpack too. So I think there's work on both of your parts to sort of get to the consensus that he's fine. He's doing better than most adults in America. I'm much less worried about him. And mom, you have done a great job with this young man. Create your free every dollar budget today. The simplest way to budget for your life.