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hummingbird
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Posted: Mon Apr 30th, 2007 08:16 pm |
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We've never been very open with our kids as to what our financial situation is. They know Mr. Hummingbird makes good money, but they don't know how much. They know I make some money working part-time, but I haven't told them how much. They don't know how much we have in savings & investments, or how much of a mortgage we carry, etc. I told them how much we have saved for their college education, and how much above that we are willing to spend (since the amount we have saved is unfortunately not going to be enough).
Is it just me, or is anyone else not so enthusiastic about sharing all of their financial details with their teenager? You fill out the FAFSA and the PROFILE and your whole financial picture is there in black and white for the student to see. Am I being too private?
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mackinaw
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Posted: Mon Apr 30th, 2007 08:25 pm |
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We never shared all of the details with our kids, even the FAFSA and Profile were things that we filed without their perusal. They knew we made good money and that we had saved and that their grandparents had contributed bonds that would be cashed for college costs.
Because, however, we figured that we could just about cover anything that was likely to come up -- with savings, the bonds, income, and, if need be, home equity -- we never accounced a specific cost or price limit. But had we been under a stricter constraint, we'd have done that, and given greater emphasis to their going after merit money or accepting the merit offers that actually did come their way.
I don't think you have to tell them your whole financial situation to set limits. You just have to tell them what the limits are and, to the extent needed, to explain why. For example, the kids knew that we would not in any way compromise our pension funds. But we were willing to remortgage the house, which in a way is also part of a post-retirement financial legacy for us.
Last edited on Tue May 1st, 2007 02:11 pm by mackinaw
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CarolynLawrence
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Posted: Mon Apr 30th, 2007 08:31 pm |
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First, "Mr. Hummingbird" bought a smile to my face.
Second, let me say that my parents felt exactly the same way you did. Their finances were private, and never discussed with us kids. Even after my father passed away, and my mother became disabled and dependent on my help for everything else, she was reluctant to let me know all of the details of her financial situation. When she passed on, it took me THREE years to get her estate figured out and settled. It was truly a nightmare, and I would have given anything to have been able to discuss at least some of the details with her before she died.
Your kids are going to know your financial situation some day. Might as well start getting comfortable with letting them get some idea of what's what now. You don't have to give them every single detail, but letting them know the basics is a good idea, and also prevents false expectations. (False expectations resulted in my sister further delaying the settling of the estate with needless legal wrangling)
Of course, that's just my opinion. 
Last edited on Mon Apr 30th, 2007 08:33 pm by CarolynLawrence
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hummingbird
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Posted: Mon Apr 30th, 2007 08:34 pm |
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I guess I'm surprised at the number of kids on CC that know intimate details of their family's finances - how much dad makes, the value of the real estate the parents own, what's in savings and retirement funds, what their EFC is, etc. In fact, some kids make it sound like THEY filled out the FAFSA form.
We did set a specific amount because we want him to be invested... if he wants to go to a certain school that costs more than we are willing to pay, he needs to find merit money or take out some loans. Although, in truth, we are not willing to let him go into too much debt, max $20K total. We can cover more than we said; we just want to make sure that he doesn't go out and pick the most expensive school because he can, like ordering lobster from the menu, LOL.Last edited on Mon Apr 30th, 2007 08:35 pm by hummingbird
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mackinaw
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| Location: | Michigan |
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Posted: Mon Apr 30th, 2007 08:51 pm |
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That sounds about right to me.
Carolyn, regarding your will and estatte, I think that it's good to keep your financial affairs in order, have your estate planning done, and so forth, so there's no mystery about whom to contact and what kinds of resources might come into play.
But I don't think you have to lay it out in dollar terms to your children at any point, or even to identify all the types of assets, as long as you have this documented in a good way -- "in case." Of course, you might want to tell them this, but it's not needed, it seems to me.
Our kids know that we basically have a limited range of assets and sources of income. They know that we spent what we had in liquid form to get them through college without debt and that we're tapped out in terms of savings and other resources. They know that in all probablility some day there will be some cash coming their way but there's no point even in telling them how much because in fact we do not know what it might be, and don't want to create any false expectations in either direction.
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hummingbird
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Posted: Mon Apr 30th, 2007 09:02 pm |
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Hadn't thought about it in terms of my parents until you mentioned it, Carolyn.
I still do not know what my mother's financial picture looks like. I'm in my 40's and she's in her 60's. About 20 years ago, I knew how much her salary was, but that's about it. She is retired now, and I have no idea how much she has in savings, or if her house is paid off, or anything really. My dad & stepmom's finances are a complete mystery to me.
My in-laws share their financial information with two of their four children. The 'kids' sort of split up how they help their parents: one who lives on the east coast does all the financial stuff, one who lives in California deals with medical stuff, and the two local 'kids' (Mr. Hbird and my SIL) visit often and help them out around the house fixing things, etc.Last edited on Mon Apr 30th, 2007 09:04 pm by hummingbird
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mackinaw
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Posted: Mon Apr 30th, 2007 09:22 pm |
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Hummingbird, it would be a good idea at least for you to try to find out whether your mother and your father/step-mother at least have done some estate planning. I know this can be a very delicate matter. It took until last year for my elderly parents (late 80's early 90's) to revise their trust and will, something that they told us for several years they were planning to do.
They willingly accepted my help to get their papers in order (I mean making lists and files from papers that had been collecting in two large suitcases!). To get over the hump required cooperation between me and my sibs. I went and put together a bunch of documents, account numbers, and the like, so that my parents could then get their (new) lawyer to redo the papers, while one of my brothers (and his wife who is an attorney) reviewed things and helped to get everything signed off.
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Chedva
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Posted: Mon Apr 30th, 2007 10:49 pm |
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We filled out Profile, FAFSA, and all the other financial forms; d never saw them and never wanted to.
Because, however, we figured that we could just about cover anything that was likely to come up -- with savings, the bonds, income, and, if need be, home equity -- we never accounced a specific cost or price limit. But had we been under a stricter constraint, we've have done that, and given greater emphasis to their going after merit money or accepting the merit offers that actually did come their way.
Same for us.
However, she does know that there will be some sacrifice for us and for her so that she can attend her choice. She knows she'll be taking out loans, and probably getting an on-campus or off-campus job (no work study).
That's about as much as she wants to know. Every time her father tries to talk to her about money, investments, stock market, etc., she runs screaming in the opposite direction!
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hummingbird
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Posted: Mon Apr 30th, 2007 11:01 pm |
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Hummingbird, it would be a good idea at least for you to try to find out whether your mother and your father/step-mother at least have done some estate planning. I know this can be a very delicate matter. It took until last year for my elderly parents (late 80's early 90's) to revise their trust and will, something that they told us for several years they were planning to do.
My stepmom gave me a packet last Christmas, and said that all their information was in there, with the name of their lawyer; in the event that something happened to them, I was to be in charge of their estate. I haven't opened the packet and looked through it. I'd actually forgotten about it until just now.  I know they don't have much, but I'm glad they do have their affairs in order.
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jocelynDAD
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Posted: Mon Apr 30th, 2007 11:13 pm |
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Each family is different - as is each child.
For us, college is something that I promised my first child, the day he was born and that commitment extends to his younger siblings.
Since it is imperative IMO that the college 'feels' right and 'fits' my child needs, I do my best to help them find that college.
Luckily, our three eldest were able to win full tuition scholarships - so they were easy. Our next three needed help and they received it from us.
We file the FAFSA, but discuss it with our child because after all, it is the child's FAFSA even though it is the parent's who (normally) have the income and the knowledge to complete the FAFSA.
Once our child has their acceptances, we discuss the finances neeeded to meet the $$$. Happily, since our child has selected the colleges to suit their needs, each has been willing to look at the lower cost options and selected accordingly.
We have been able to minimize any loans, so that upon graduation, 4 of our 5 oldest were able to continue on to graduate/law school on their own. The 5th needed some assistance, which we were able to provide.
The 21st century is going to be a tough haul and in our opinion a college education is mandatory.
Last edited on Fri May 11th, 2007 05:18 pm by jocelynDAD
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Thumper
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Posted: Mon Apr 30th, 2007 11:45 pm |
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| Our kids know our financial situations in detail...at least everything that is on the FAFSA and Profile. We had them sit with us and do these forms every year...they are the ones to "sign" them. And truthfully it has helped our kids understand that, while we make a good living, we are not a bottomless pit of money. Both understand the EFC and how it is calculated, and what the Thumper Parents are doing to help them with their college educations. It also helps THEM understand when we ask them to contribute towards certain expenses, or decline to pay for what are "frills". I do think, however, that this is a personal decision that needs to be made by each family.
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outwest
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Posted: Sun May 6th, 2007 02:12 am |
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Have any of you dipped into your equity? Unfortunately, that is an easy way to pay for college when you own a house in CA. But, I want to pay the thing off, not owe more on it. ugh.
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leftcoast
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Posted: Sun May 6th, 2007 02:45 am |
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outwest wrote: Have any of you dipped into your equity? Unfortunately, that is an easy way to pay for college when you own a house in CA. But, I want to pay the thing off, not owe more on it. ugh.
I also want to pay the house off, so I will use a PLUS loan rather than dipping into home equity -- but I do see the equity as a backstop. That is, down the line if I was having a problem with PLUS loan payments, I might refi the house to pay off the PLUS loan -- or else sell and pay off all debts. So in my mind I lump the debt together -- that is, I certainly wouldn't borrow more from PLUS than would be readily available with a home equity loan if I wanted to go that route.
But my personal "plan" is to have both the PLUS loans and my home paid off in 13 years - I'll be age 66 then.
Be careful with home equity LOC's, because they are not amortized to be paid off during their term -- so you can succomb to the temptation to pay only the minimum, and be left with a big balloon payment at the end. Also, they usually have adjustable interest rates, which could be an issue if rates go up. That's one reason I prefer the PLUS.
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CalifCarolyn
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Posted: Sun May 6th, 2007 03:01 am |
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Our Daughters have a 'general idea" and based on a recent 'melt down' with D2 (yes Carolyn my darling Julia) I think a general idea is all she needs to know. We told her what we could afford to help and she knows how much she has in her college fund that we set up, the amount she has inherited, and the amt her Grandparents have pledged to her and her sister (H's parents feel that the girls will eventually recieve the $ so why not give it to them now so they can enjoy seeing the girls excitment with school) so when she received her financial offers she was able to make an informed decision based on her budget not based on our income (remember we have 2 other college tuitions to worry about too) and she selected the best school for her.
However we have learned to not share the minute financial details since budgeting the income is our stress not the stress of our children (they have enough to worry about). My younger D had a melt down because she was "spending too much on prom" she had to go over the budget by $15 for the limo  call it Senior stress.....but she kept saying "I am costing you so much by going to Valpo next year".... right now she needs to focus on and enjoy everything she needs to do between now and mid-June...and yes we gave her the extra Limo $ we don't let the girls drive with friends on Dance nights...in'05 a friend's D lost control of her car reaching for gum, 2 young people lost their lives that night and the girl driving is now being sued by the family of her best friend--there were 6 young lives turned upside down or destroyed that night.
discussing money is a must but you really need to know your kid and evaluate how much they NEED TO KNOW at each stage of the college process.
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CalifCarolyn
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Posted: Sun May 6th, 2007 03:02 am |
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i have no idea why the type in the previous post changed sizes oh well...
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DesperateDad
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Posted: Sun May 6th, 2007 02:38 pm |
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I do the taxes and fafsa/profile, so kids don't have full details. But, we've spoken enough about finaid and what income/assets limits at his college are full pay, so I'm sure that they have a rough idea of income; but neither kid is really interested. Da' boy just doesn't care, and DesperateDaughter's viewpoint is more relevant -- if she can't spend it, why would she waste her time learning about it.
OTOH, everyone knows exactly where all financial files are so if I get hit by a bus, they can easily find the financial and contact info.
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mackinaw
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Posted: Sun May 6th, 2007 03:01 pm |
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DesperateDaughter's viewpoint is more relevant -- if she can't spend it, why would she waste her time learning about it.
I hear ya. MackDaughter had a related viewpoint -- if I reimburse her or pay for something after she's already bought it, I must have had the money.
Last edited on Sun May 6th, 2007 03:12 pm by mackinaw
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CalifCarolyn
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Posted: Fri May 11th, 2007 02:00 pm |
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just something funny to add.....a scrapbooking cyber friend (who this forum helped to find a school for her dancing daughter) posted this about finances from the perspective of her younger daughter (10years old). she has never been able to get her cookies disabled to post here 
"Lexi and I were chatting while we were getting ready this morning and she said something about Ashlee going away to college and that she would not cost us as much anymore and I laughed and said she was going to cost us more and Lexi said she is???? I looked at her and said well who do you think is paying for college??? She looked at me all serious and said "well I thought the college people paid for college. LOL!!!!! I said daddy and I ARE the college people!!! She said oh.
The college people!!!
don't you wish we all had College People?
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entomom
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Posted: Fri May 11th, 2007 03:10 pm |
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CalifCarolyn,
When my D was applying, she had her own version of "College People". She was very excited about merit scholarships that included stipends for the student to use as they wished. She figured that since the money was going directly to her, that she was somehow gaining something extra. I tried to explain to her that it was a zero sum game, and that we covered costs one way or another, but she never quite saw it that way .
As far as my kids knowing family finances, I try to educate mine any chance I get. I'm big on starting financial planning as a kid, and I find that specific examples from our situation are often more illustrative than generalities. The college process has actually helped a lot in explaining how the world of finances works and where we fit within it. For instance, instate vs. OOS tuition, merit vs. FA, Profile vs. FAFSA. My D now knows how much money I make, but she also knows how much is taken out for taxes, insurance, mortgage, etc., before we start paying for college, vacations, or anything else.
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