How Do You Help an Adult Child Learn to Manage Money?

TJ's son started college a year ago, and they had an agreement that he would pay rent. TJ would give him the rent money back at the end of his college career. Is TJ teaching his son anything with this method?

QUESTION: TJ in Los Angeles went through FPU with his wife and son a few months ago. His son started college a year ago, and he had an agreement with his son that he would pay rent. TJ would give him the rent money back at the end of his college career. Is TJ teaching him anything with this method?

ANSWER: I want him to learn to budget, to save, to give, and to spend wisely and to start managing his own affairs as quickly as possible. I don’t know exactly how to get him to do that at this stage of your situation. I think you’re right in observing that what you’re doing is not accomplishing those financial muscles of his to be built. He’s kind of just having his life managed for him, and he’s atrophying. Those muscles have no muscle tone to them—the savings muscle, the giving muscle.

I’m trying to think what I would do. I have a 21-year-old also. What I generally do and have done with my kids as they’ve hit their adult years is to the extent I’m providing them money or shelter, which is the same as money, I do have control in their lives. I don’t want to exercise that. I want to try to reason with them instead and use persuasion. Here’s how the conversation would sound at our house. “Son, I’ve done you a disservice by allowing you to get to this age, and you still don’t know how to save. You still don’t know how to budget. You still don’t know how to do this. It’s kind of like I’ve allowed you to get to this age, and you don’t know how to brush your own teeth or bathe. These are basic life skills, and you’re exhibiting absolutely no discipline in these areas. That’s just simply not okay. I’ve not done a good job of teaching you. I’m sorry for that, and I’m here to apologize. That’s the end of the good news for you.

“The bad news for you is that you are about to start those things today. I’m no longer going to charge you rent. The rent that I’m going to charge you is you’re going to turn in a budget. You’re going to show me where you have saved money every month. You’re going to show me where you have given money every month, and you’re going to show me where you spend your money wisely. I am going to agree with all three of those things or you are going to move out. This is your budget. This is your rent. You are now going to live on a budget. You’re going to save, and you’re going to give.

“This is the only rent I’m going to charge you. You can live here for free and continue to get the occasional use of your mom’s car and the free rides that we give you all over town because you’re 21 and still don’t own a freaking car. We can take this $3,000 and buy a car with it if you want, but you’re going to save money. You’re going to give money. You’re going to spend money wisely and on a written plan, and that is the rent I’m going to charge you or I’m going to evict you. I’m only doing this because my job as your dad is to teach you to bathe, to teach you to brush your teeth, to teach you to give, to teach you to save, to teach you to work, and to teach you to spend wisely. To date, I’ve not been able to pull that off. Do you understand how important this is?”

He’s going to say, “Oh, yes.”

“Do you understand that I’m really not kidding? You’re going to be homeless if you don’t do these things, because I’m going to evict your butt. You’re going to learn to do these things. I’m going to do it with a smile. It’s going to be kind. We’re not picking a fight. We’re not going to do any of this. It’s my job as your dad to teach you to be a man, and right now, you’re acting like a 21-year-old boy. You need to be a man. Stand up and do manly things. Have the dignity to care for your money well.”

You can talk him through this. That’s what I would do if it were my house.