So here we are just a couple of months after DS2 graduated and flew the coop. Now DS3 starts college this month. A fresh new round of cobbling together funds to pay the semester’s expenses. This is what Fall 2020 looks like financially:
Total bill from the university for housing, food, tuition, & fees - $10,637. It’s slightly less than I expected, maybe because now the semester ends just before Thanksgiving.
This is how it’ll be funded:
$2,597 balance of 529 account from old state
$4,000 cash set aside
$ 25 scholarship
$3,015 withdrawal from current 529
I wanted to transfer the funds from our old state’s 529 plan to the current plan after we moved just for simplicity’s sake but the old state informed me that I’d lose the ‘earning enhancements’ that had been paid into my account by the state if I transferred it. It’s just 2%, but still, it’s free money. I didn’t want to leave money on the table so I kept the accounts open. We had accounts there for DS1, DS2, and DS3. I’ve always pulled that money out first so I could close the account. This is the last kid with an account there so finally I’ll be able to close it completely.
Our current state doesn’t provide any contributions but it does provide a state tax exemption for money contributed to a 529 account – ANY 529 account – up to the gift tax exclusion which is around $15k per kid. Since I could choose any 529, I did research back then to find a good one. I selected the Utah plan and I’ve not been disappointed. The fund choices are good (Vanguard), the website is easy to use, and it’s easy to make withdrawals. For that withdrawal, I completed the request online on their website and the money was in my account in two days. In contrast, the old state’s plan doesn’t offer online withdrawals. I had to print out forms, including a tax form, then scan and e-mail them in. Now I’m still waiting for a paper check to arrive. I hope it gets here before the tuition is due. Otherwise I’ll have to temporarily transfer money from a savings account. Grrr.
I set aside $4000 cash per year (at least) from my income so that I’ll qualify for the American Opportunity Credit deduction on our taxes. It provides a refund/credit of $2500 if $4000 was spent on college tuition. It doesn’t provide the credit for money spent on college-related things like housing & food but I’m using 529 funds for that. You also can’t get the credit if you used all 529 funds because that would be double-dipping. You also have to have an AGI of $160k or less. As I type this, it sounds complicated but it really isn’t. Like most things financial, you just have to know the rules.
That $25 scholarship? I’ve waited 10 years to use that! DS3 participated in an after-school bowling camp during the winter of third grade. He’s high energy so I just wanted something active for him to do indoors while I worked in the afternoons. It was a neat setup: the bowling alley sent a bus to school to pick up the kids. They gave them homework time, pizza for snack, and then taught them to bowl. At the end of the week (or two? I can’t remember.), there was a bowling tournament for the kids and DS3 won the $25 scholarship as a prize. We laughed about it and told the grandparents that he already had an athletic scholarship for college at age 8. A couple of times over the years I got paperwork about the scholarship and had to create an account online, updating passwords sometimes. The online request to get the money was straight-forward but they won’t send it to me – it must go straight to the school. It makes me chuckle to think of the person in the bursar’s office who will receive that official scholarship check for $25! So really, I probably worked hard for that 25 bucks but again – it’s free money. I reminded DS3 that his bowling performance is helping him now! I don’t know if he’s bowled since then.
We’ll still have books and the costs related to setting up his dorm room. So I expect to spend another $500 or so. Then I’ll start thinking about next semester.
Viewing the 'kids' Category
So here we are just a couple of months after DS2 graduated and flew the coop. Now DS3 starts college this month. A fresh new round of cobbling together funds to pay the semester’s expenses. This is what Fall 2020 looks like financially:
So I did drop DS2 from our auto policy once he moved to his own place and bought himself a car as I planned in an earlier post. And our insurance price increased as a result! I guess the insurance company figures that with DS2 out of the picture, DS3 drives the vehicles more. And that’s true. One of the vehicles is in my name but is actually DS3’s – he paid for it. DS2 was 22 with a good student discount. DS3 is 18 without a good student discount. Ah, that’s what I get. I can only imagine how much it’ll be once DS4 and DS5 join the policy. They’ll be getting permits in the Fall and licenses sometime next year. Then I’ll have 3 teenaged boys on the policy. Eeek!
Our current 6-month premium is now $1070. That covers three drivers using two cars with liability coverage only. The liability coverage is 250-500-100.
Today was a milestone day for DS2. He’s moving into his own place. He graduated in May and then started working in a town about a 45-minute drive away. He was unable to get an apartment for months mostly because of Covid-related shutdowns. Property management companies weren’t even showing places. He also had decided only to consider apartments that were biking distance to his work and reasonably priced.
Finally, he found a place that suits him. It’s a two-building complex where each building is a 4-plex and it’s in the town where he works. It’s not pretty-looking on Google maps, but it’s practical for him. There’s even a laundromat across the street. He said he could walk to work in about 15 minutes. It’s basic – a one-bedroom apartment with a bath and a combined living room and kitchen area. He’s living alone though and wanted to live cheaply so he can save money for the next couple of years. I think he’ll be paying about $600/month in rent. In preparation for the move he bought a router for his internet, arranged for utility accounts in his name, bought a window A/C unit, and rented a U-Haul to move all his belongings. I’m surprised that he was allowed to rent the U-Haul since he isn’t 25 yet but he didn’t ask for help so I guess it was okay. Maybe the rental companies are being more lenient since their business is slow these days. But all those things are adult activities and I could tell that DS2 is feeling proud that he’s independent. I’m proud too.
Before he drove away in the big van loaded with his things, he told me that we could go see his place in a week. I think he wants time to get his place sorted before he shows it off to us.
DS4 helping DS2 load the moving van
I guess my next move is to have DS2 removed from our auto insurance. Hopefully that will save a few bucks because having DS3 on the policy is costing us plenty.
June 21st – the longest day (for natural light) of the year. I love the long days and made a point to spend a good part of the day outside. The only bad thing is that the days get shorter from here, already. DS4 started his life-guarding job today. He has rosy cheeks from the sun so he’ll remember to take sunscreen tomorrow. My boys don’t usually burn because their skin has a slight olive tone like mine – even the blond one – but it is the very beginning of the season here so they need to be careful now.
On the money front: I received an EOB from Aetna and they paid DH’s antibody test at 100%, like a preventive service would be covered. I didn’t expect that. It was $55.
We received another refund from the high school. This time it was $20 that we had paid for a class lab fee. It was refunded since the school was closed in March. That class – Foods – wasn’t fun for DS4 to do online. It would have been a challenge to make fun & interactive online and that teacher just wasn’t the type to change her lesson plans. The school just sent out a survey to get feedback on parent preferences for safety measures vs going online so I guess the Fall semester is in the air. Hopefully if it is online the teachers have time to learn how to teach effectively that way.
When FIL died at the end of January, he left most of his assets (IRA & other accounts, vehicles, etc.) to his wife. In his will he left one savings account to be split among his grandsons. Noone expected this. Our boys will each receive about $10k in the next month or so. They each inherited a gun from FIL too but they weren’t surprised because they’d been asked in past years which one they preferred. (FIL was an outdoorsman.) His will might be entertaining for another hunter to read because one line after another says something like “To my GS1 I leave my Winchester blah blah rifle with the blah blah scope, serial number blah blah” through about 20 guns. He covered all his grandsons, his sons, his son-in-law, former son-in-law, step-son-in-law, former boyfriend to his daughter, and his daughter.
I’m not eager to have those guns in the house – I resisted this with DH for the past decade because our boys were the have-to-touch-everything type of little boys. I guess I’m glad at least that they are older now and two of them don’t live at home any longer.
As for the money, because two of our boys are minors, we will be given the money on their behalf. The other three will receive it directly. I told the twins (DS4 & DS5) that I would allow them to spend some of their money if they chose to but that I would be doing it on their behalf. I’m not trying to be controlling but I just don’t want them to be vulnerable to someone taking advantage of them. In fact I worry about DS3 in that regard but he is 18 and typically not receptive to advice from me.
This is what each boy plans to do with his windfall:
DS1 - $5k to Roth IRA now for 2019 since the deadline is extended, $2k student loan debt, $3k current desires including $1k to “play” with stocks
DS2 – All of it to top off Roth IRA for 2019 and 2020
DS3 – undecided, but has talked about a newer more reliable car
DS4 - $1k to buy the bed he wants, $9k to savings for a car purchase after he’s 18
DS5 – up to $3k for a fancy gaming computer setup, $7k to long-term savings with no goal yet
I’m curious to see if all their plans stick when the money arrives.
DS3 forgot to close his door before backing out of the garage this week. I can’t remember a time that I ever forgot to close my door before driving. Maybe the trunk or the gas cap but not my door! He assures me that he was paying attention to driving and not his device. Ahem. I was working in my office space which is above the garage and felt the walls shake while I heard a loud crunching noise.
My initial reaction will not go on record as one of my best parenting moments. In order to get the truck’s door out of the wall, DS4 and DS3 pushed forward together while the thing was in neutral. Then we could see the damage.
DS3 knew that he’d be responsible for the repair. And we both agreed that he did not have the skillset to do it to my satisfaction. He opted to hire DS2. DS2 also has no drywall experience but he does have the skillset (He’s an engineer-to-be.). He’s charging DS3 $300 for the fix. I have no idea if that’s a competitive price. But the silver lining is that he’s learning something new while DS3 learns a tough lesson himself. The job is nearly finished.
I realized that all three driving boys have had a mishap in the garage. DS1 backed out with the side garage door open and bent it so badly that it couldn’t close so it had to be replaced. DS2 backed out too fast and broke one of Bertha’s side mirrors. And now DS3 has done this number. We’re 0 for 3 in getting through initial driving years without having an accident before leaving the garage. Wow.
Stuffed eggs ready for the hunt
Our family has a tradition of a family egg hunt on Easter morning. The boys are older now and still look forward to the egg hunt because some of the eggs have money in them! It used to be mostly coins when they were small but now it’s an assortment of bills and a few are substantial. Only some eggs have money but all eggs have candy. A couple of eggs had vouchers for bigger candy items that don’t fit in an egg like a chocolate bunny. I use the same plastic eggs and big basket year after year. During the hiding all the boys stay in the master bedroom with DH and watch a show to ensure no one gets a peek outside. They are released for the hunt by age in ascending order and when they were younger, I’d give the younger ones a longer head start. Now their hunting skills are comparable so I only make them line up to prevent trampling.
It's still a hoot to watch and the dog had the best time of all. She loved having all five boys running around the yard at the same time. This year she figured out how to hunt for eggs herself! We had to throw out one plastic egg she found because she cracked it with her teeth.
DS1 got the whopper egg with a $50 bill this year.
I guess if I ever become a grandma, I’ll stop hiding for the kids…
I’m a planner by nature so I’m directing any anxiety about the current situation to our logistics. The boys are off school for at least two weeks. DS2’s college extended spring break so he just extended his visit with our families in the south. He’ll fly home in a week. I’m hoping that travel is safer then with international flights discontinued. He also connects in Charlotte rather than one of the mega-airports. If his college makes a decision to complete the semester virtually and travel becomes more restricted, I suppose he could stay there. DS1’s current job is customer-facing so I do worry about that although it’s not in a big city. Fortunately, my job with the exception of occasional travel being canceled isn’t impacted much. I’m most productive working from the home office and that’s the typical work day for me. I will need to creatively replan some projects that have tasks normally done at the customer site though.
This weekend I’m cleaning. Our house is grubby most of the time. Women who value a pristine home environment would be appalled by our place. But with a crew of boys I learned years ago that I would be a ball of stress if I insisted on keeping the place like a showroom. Usually my cleaning efforts are focused on keeping dishes and clothes caught up with an occasional vacuuming. But this weekend I’m dusting, wiping, scrubbing, and disinfecting door knobs and light switches.
We’ve never had an emergency food stash despite the fact that we live far enough north that a snowstorm could potentially force us to be homebound without power. We once lost power but the snow wasn’t too deep to get out and we moved to a hotel for a couple of days. Every year I say that I’ll make one before the winter arrives and I don’t. Laziness I guess. Knowing that we could be forced to stay home for a month or more, we created a stash now. It includes an extra round of household items we purchase every couple of months – garbage bags, laundry & dishwashing detergents, and pet food. And some healthy food that can keep awhile – rice, beans, applesauce, figs, peanut butter, mixed nuts, carrots, onions, potatoes, and one box of Girl Scout cookies so we don’t feel deprived. I also ordered some organic coconut milk powder. Really I think we’d be healthier is we were forced to fast a couple of days or eat beans & rice only! I’m not saying that I hope it comes to that though.
In addition to the food stash, I created a small cash stash. That’s another thing I’ve always intended to establish. Eventually I’d like to have a month’s basic expenses in cash. Maybe I’ll consider that as a goal next year.
To prepare ourselves for exposure to the virus which may be inevitable, we’re all taking vitamins and an anti-viral herb each day. Last week I also ordered replacement filters for the Berkey water filter.
Since we’re hunkering down, I’d like to plan what to do with boys during their time off. Maybe working on scout merit badges with DS4. Or having a game night. I’ll check out our game cabinet and see if we have all the Monopoly pieces.
Last night DS1 finally made the time to come over to create a budget. I have been nagging him so his participation was somewhat reluctant. I asked him to bring his laptop and I started him with an Excel workbook that I created with sample categories populated. I preached my truth about budgets not being restrictive but instead giving control so the funds are allocated to the things we believe to be most important in our lives.
I am cautiously optimistic that the session was effective! He adjusted the categories and evaluated different scenarios just like I do sometimes. The spreadsheet is basic but it calculates totals by month, by category, and year-to-date. He got excited about having a vacation fund and an entertainment category. Once he had the budget balanced to nearly align with his minimum pay, he downgraded his Netflix membership, downgraded his health club membership, and deleted a Doordash app from his phone. I didn’t suggest any of those things!
He created a category for health insurance premiums so he doesn’t forget but the budgeted amount is zero for this year since he can remain on our health insurance plan through December. We also talked about removing comprehensive auto insurance coverage to lower his premiums once he gets his financed 2007 vehicle paid off which he said will happen by summer.
We’ve planned another session on Easter day when he’ll be home to open an HSA account with Fidelity and a Roth IRA account with Vanguard. He’s got budgeted amounts ready to auto-transfer once he gets those accounts established. Before then he’s going to open a savings account at a different bank than his checking for his soon-to-be EF.
My justification for being so assertive in getting him to sit down and work a budget was that I wanted to make sure he paid back his loans to me. That’s what I told him to make him feel obligated to meet. And that is indeed a category in his budget. But my motive was broader – I wanted him to be empowered, to feel like he controlled his finances. I’m hopeful. He did seem to own it by the time we finished. We’ll see how it goes. I think I’ll e-mail some links to blogs with budgets every few days so he can compare his with others. I know I always find that an interesting exercise.
College funding is a priority for our family. I hate student loans so much – it seems like they hold young adults back right at a time in their lives that they should be future-focused and optimistic. We communicated to the boys early that we would do everything possible to pay for college so they didn’t need to start their adult lives fighting debt. In order to do that, there are things we sacrifice but we’re okay with it because our priorities are in line with our values. So we don’t have cable, car notes, cleaning services, or annual vacations for example, and we don’t routinely eat out beyond celebrations. (though if you read an earlier post, you know we don’t execute this flawlessly) We don’t buy cars or cell phones for kids and we don’t intend to help pay for weddings or houses.
With that stated though, there is a requirement for the boy. He must provide a return on investment for the college spending in order for us to continue funding college. DS1 didn’t do that and I cut him off after his second year of college. This was a serious ‘tough love’ move on my part. So you don’t think I’m heartless, I should say that DS1 is an extremely capable intelligent kid. He could make straight As if he busted his rump to do it. Had he been putting forth his best effort and come up short, I’d have been more compassionate – I promise. Instead it was his social life that he unfortunately prioritized. He’s an extrovert (my opposite!) and he enjoyed parties and didn’t regularly attend all his classes. Of course he didn’t volunteer this info, but I figured it out. I told him that I hoped he finished up his degree but that he’d be doing it on his own nickel. And I told him that if he succeeded, no one would be prouder than me because I’d understand what it took for him to do it.
To his credit, DS1 didn’t debate and he didn’t play the victim. He knew he’d messed up. So for a year or so, he sat out while he worked full-time. He discovered then that the jobs available to him without a college degree were limited and didn’t pay well. Then he re-enrolled at the college and he got student loans. He hit an issue at that point. Even though he was no longer a dependent for our taxes, applications for loans beyond $7500 (I think that was the amount.) required that a parent either co-sign or take them out. So he came to me. I’ll be damned before I co-sign a student loan! But because I did support DS1’s effort to finish school, I offered to be the lender instead. Today he owes me $14k. One of the stipulations of my loans was that they have to be repaid in 3 years – not 10 or more like the government allows. I want him to bite the bullet and get the debt behind him.
DS1 graduated in December and just accepted a job offer. He has two roommates in a similar position that he’s known for years. Both have entry-level jobs and are paying off student loans. (They jointly celebrated sometime last year when one of them got his balance below $100k!) So now I’m reminding him about his payment obligations and offering to help him budget his new pay. Because of the precedent I set with DS2 on splitting scholarship money, I am giving a credit to DS1 for the small athletic scholarship he received one semester.
The payments I receive from DS1 will go to house debt.
I am very proud of DS1. He finished two years of college while working full-time to support himself. In my mind, his super expensive lesson had a happy ending.
Now you know why I’ll never state that all my boys graduated without student loan debt despite it being important to me.
This week I purchased dog food and entered it as part of our grocery expenses. It was a first – up until this point I’ve transferred money from DS3’s account to mine to cover the cost any time I purchased dog food.
About a year and a half ago DS3 had a GF and the two decided to get a puppy together. Well, it was not vetted with us and I was more than a little annoyed when the dog arrived. I love dogs (but not as much as cats!). And DH really loves dogs. I think DS3 knew that once we saw the puppy that we wouldn’t have the heart to tell him to get rid of it. He was right.
As typical of kids, even older ones, after the first week or so, DS3 was not the one tending to the puppy. DH did and still does the brunt of the work to take care of her and she’s high maintenance. We don’t have a fenced yard so she has to be walked and it gets COLD here on winter mornings. I was determined though that DS3 would take on the entire cost for this unplanned pet and I stuck to that. He didn’t debate it at first. He paid hundreds of dollars (some with help from the GF) for vet visits and vaccinations and then either bought himself or refunded me for dog food. I insisted that she be spayed, and that cost him over $600. He told me I should have shopped around. I told him HE should have shopped around.
Unsurprisingly, the relationship with the dog outlived the relationship with the girl. There wasn’t a custody battle – the dog became ours and stayed here. And to be honest, there’s no way DH would allow that dog to live anywhere else. The two have bonded.
So now DS3 no longer receives an allowance and he’s preparing to leave for college. My original intent was to make him take financial responsibility of the dog forever – even expecting him to find a place to live that accepts dogs after he graduates. Now, I’m rethinking because for one thing – DH considers the dog his now, and for another - I don’t want DS3 to feel pressured to get a job while he’s in college to support the dog. So after I grabbed that big bag of food this week, I didn’t transfer any money. I also haven’t said anything yet so I could change my mind. But perhaps this is a point we can agree that the dog changed owners. Now that my anger has subsided and she’s become part of the family.
As I said earlier, I was proud of him no matter what because he took initiative and prepared himself for this opportunity. I’m glad it paid off. He’s going to be a lifeguard at a local fancy-pants hotel.
The vet bill finally cleared on the Ally CC, so I redeemed my last rewards – 80 bucks to the Ally savings account. Ka-ching.
For our family January ended on a sad note: FIL died yesterday. He was in hospice so it wasn’t unexpected but still tough to accept.
Yesterday was my fast day too (new habit – one of my 2020 goals) and I survived. Going for two days to get my February day in too was not an option though – 24 hours was as much as I could take. So I’ll plan for another day in February. And I’ve got to decide what my second new health-enhancing habit will be beginning this month.
On the financial front (since that’s the focus of the blog!), DS4 had an interview today for a summer job. He feels good about it. He was nervous but prepared. I’m really proud of him, no matter what happens. Hopefully he’ll get an offer after they check his references.
I’ve stopped using the Ally CC and I’ll redeem my points for cash to the online savings account once my last purchase moves from ‘pending’ – a nearly $300 vet bill for our feline’s annual check-up. Then I’ll be done with that account.
I’ve started doing taxes and hope to finish them within a few days. And I’ve sent principal payments to the 0% CC with a balance and to house debt. I’ve also just been reimbursed for my business trip earlier in the month so I need to send that to the CC before it’s due.
Yesterday DS3 bought a truck and a 4-wheeler! I was surprised since he hadn’t discussed it with me, but he’s 18 now and he used his own money.
When our DS1 was very young I read several articles about teaching kids money management skills. I was interested because I felt like WE were just learning money management skills at that time and I didn’t want to repeat the cycle of learning about money ‘the hard way’. [I ought to blog sometime about our ignorance and some of our terrible decisions during those days…] One thing struck me as I read the articles: kids can only learn to manage money if they have money to manage. So based on that premise, I created our family’s money program for kids and though I would tweak some things if I were to start again, overall it has been effective. My boys know so much more than I did at their ages – all of them.
We started an allowance at age 5. The DS received one quarter per year of age each Sunday. Then beginning at age 10, he received 50 cents per year of age each Sunday. At age 13, it bumped to $1. At age 15, it bumped up again to $2. At age 18, it stopped.
It wasn’t just the amount that was progressive – the financial responsibility was too. So at age 5 he just paid for candy and extra toys. I never had to say “no” to a kid whining for candy in a check-out aisle. Instead I said “Of course you may have those M&Ms – did you bring your money?” Or “Do you have enough?” By age 15, the boy was expected to pay his own entertainment expenses including gas, movies, dates, and also buy his own clothes. I didn’t have to debate about what clothes brand was ‘cool’ and acceptable – he could buy whatever he wanted. Also at age 15, I opened a checking account at the credit union and began direct depositing the allowance instead of using cash. That’s when he received his first debit card.
The boys also had chores but they weren’t linked to the allowance. The chores are mandatory because they live here – only some special jobs qualify for payment and they’re optional. Over the years I sometimes gave advice, even unsolicited advice, but I never made rules about how money was spent or saved. They decided for themselves whether some expensive things were worth it and they learned fairly young how to calculate sales tax. They’ve learned what banks do when your account gets even a teensy bit negative. Recently they’ve learned that when you sign up for a deal online sometimes there’s VERY small print that indicates that you’ve really purchased a subscription and the company will hit your account every month.
At age 12, I established a savings account for the DS and I agreed to match contributions, BUT the savings could not be touched until age 18.
When he turned 18, DS1 had a princely sum of $350 in that savings account. For six years all his savings efforts plus matching contributions: $350. He even had a job for the last few months of that time. DS2 decided when he turned 15 that he didn’t really need $30/week so he requested to have $10/week put into his savings. With matching, that was $20/week. (Yes, it did hurt a little…) At age 18 he had $4000 saved up. He asked me then to show him about investments so I helped him set up a Roth IRA. He could only put about $1200 in it that year because it’s all he earned. So now DS3 just turned 18 last month. He also had parts of his allowance directed to the savings like DS2 plus he would occasionally hand me money earned from a job. I once had to double $900! He also heard from DS2 how much more investments earn than savings so when he was 16 he asked if he could put some of his savings in a brokerage account so long as he still didn’t touch it until 18. I agreed to that. He had just over $7000 in the two accounts combined when he turned 18. I think he’s probably just spent the savings money and left the $2000 in the brokerage account. As for DS4 and DS5, it appears that they’ll be somewhere in the middle. One has between $1k and $2k and the other between $2k and $3k. The one with more requested a brokerage account too. They’ve still got a year and half before they turn 18.
What’s interesting is they all learn from one another. In some ways DS1 was at a disadvantage because he was first. But even so, it’s about learning lessons while the stakes are low. He was recently eligible to sign-up for a company’s 401k for his student job while in college and he did make that choice because he’d learned the value of automatic savings from his brothers.