Episode 6: Parent Involvement
Pete and Alex talk about establishing a healthy financial relationship with your parents and how a failure to do so can prevent you from moving forward with your life due to a lack of financial independence.
This week's thoughts were written by Elizabeth Cotter, a Sports Journalism major at IUPUI. Elizabeth is sharing her thoughts about having parents being involved in the finances of a student while they're in college compared to the podcast where Alex reflects on the involvment of parents after college.
My parents have had a very strong role when it comes to my finances. Ever since I babysat and got my first job, they always emphasized the importance of budgeting and understanding my options when it came to spending. The other thing they did, though, was not dictating where my money was going. This is what kind of started my road to financial independence. They would advise me to do things with my money and sometimes I would adhere and other times I didn’t and paid the consequences for my decision. They gave me the opportunity to experiment early through trial and error with my spending which allowed me to learn some lessons the hard way, while at the same time having stability by being at home.
While in college my financial independence has grown. I have my own checking account that cannot be accessed by my parents. I am in charge of paying for my housing and food, and also am responsible for whatever is not covered by scholarships. My parents continue to serve as advisors when it comes to spending but they are also my source of accountability, whether they contact me directly or if it's just their voices in my head. Whenever I make a purchase my parents quickly come to mind and I ask myself whether I could justify my purchase to them.
I feel like my parents have done a good job allowing me to figure out my finances without totally leaving me for dead. They continue to have a presence in my financial life with their advice and knowledge but give me enough space that I feel self-sufficient and entirely capable of managing everything myself. I am very lucky to have my parents take this stance with me on money and I think it is important for other parents to do the same. Financial independence is vital and parents should serve as a helpful resource to get there while we are young and in college.
We think this is a pretty responsible approach Elizabeth and her parents are using to help her with her finances through college. These years in college are supposed to be the training wheels to your adult life - assuming you haven't already experienced those. With that in mind, it's important for you to use this time to be as financially independent as you can be, and use your parents as a support mechanism to keep you upright should you lose your financial balance - so to speak. Trust us when we say there's nothing more embarrassing than being a college graduate and having to admit that you still rely on your parents to keep you stable. Of course, a situation like Alex's is different because he's using his parents as support to help him fasttrack his financial situation, rather than relying on them to get him through his day-to-day life. There is nothing embarrassing about that. In fact, that's something we recommend doing if at all possible. What you should take away from the lesson this week is that both Elizabeth and Alex did not rely on their parents for financial support in college and it allowed them to develop their financial personality and has put them in a really good position for the rest of their lives. Hopefully, you can do the same. And even if you're living at home during college, establish some system that makes you responsible for some of the household financial obligations. It will make you a better steward of your finances for the rest of your life. We promise.