Money Management for Foster Youth Aging Forward

By Shay Stinson 

Edited By Intisar Seraaj  

Let’s do a quick quiz.  

1. How well has your young adult prepared for bills and responsibilities? How much money do they have saved?

1. *blank stare
2.  I don’t save, so I haven’t modeled that behavior. 
3. We don’t discuss finances; Money is a touchy and private subject. 
4. I save for them but they’re not a part of the process. 

For most young adults, this question is going to cause some anxiety, because, let’s face it, most young people are not thinking of saving for “rainy days” or bills, especially if we haven’t taught them this independent living skill. Sadly, financial skills aren’t taught in schools. So, it’s up to us to teach our adolescents about financial responsibilities and concepts like monthly bills, taxes, and budgeting—if you haven’t already. There is a plethora of ways that you can introduce the concept of financial responsibility and independence to your young adults, which brings us back to the quiz. As you’ve probably noticed, none of these are good answers. But these are starting points for having better answers. Whether you’re a parent, grandparent, godparent, or guardian of a child, behaviors must be models to be learned, topics must be discussed for their significance to be recognized, and because many people learn from doing, kids learning something knew should have hands-on practice. So, let’s discuss a few ways to financially prepare your child(ren). 

Earning 

Most of us have heard the phrase “it takes money, to make money.” Well the opposite is also true: To spend money, you must make money, and there’s no way around that. Have a conversation with your adolescent about how they can earn a living and maintain their preferred lifestyle. This is a great time to explain how paychecks and paydays work, including how to calculate the hours you should be paid for. Learning how to estimate your pay is a valuable lesson for young adults who may take more off days than they can afford. If your young adult is not able to work or must work limited hours, the lesson here should be how to live within your means. But even if your adolescent is gainfully employed, we all must budget, save, and live within our means. So, this lesson is applicable for everyone. 

Here are some money-saving tips: 

• Cook rather than eat out 

• Conserve water to lower your water bill by doing things such as turning off the water while brushing your teeth, shortening your time in the shower, handwashing dishes rather than using a dishwasher, and taking showers rather than baths. 
• Clip coupons or use coupon and discount apps like Groupon, RetailMeNot and Coupons.com, or use a store’s personal app like the Target app. 
• Use money management apps that help you budget and save like Mint, Wally, or Acorn. 

Spending 

The first way to introduce them to spending is to teach them how to spend wisely; Hold your child accountable for their own spending habits. If they are given allowance or spending money, make sure you are holding them accountable for how they save or spend it. There may have been times when, even as an adult, you overspent. And no one rescued you. Do not rescue your young adult if they spend money on their wants and desires and forget to save enough to cover their needs. For instance, if your young adult has a car or uses public transportation and they overspend on takeout food, do not help them with their transportation fare. Show them ways to figure it out. Maybe they can recycle for cash, sell old electronics online to earn money, or sell their old clothes to consignment or thrift stores for cash or store credit (providing them a cheaper shopping option when they need or want more clothes). This will teach your young adult the first valuable lesson they will need as they age forward: You are the captain of your life. 

Budgeting 

Sit down with your teen and write out all their monthly expenses. If they currently have zero or very little monthly expenses, use this time to create an idea of what that would look like once they’re living on their own, have a car, get a pet, and/or start dating. You can ask various questions to get an idea of what they would spend on groceries, gas, toiletries, and other needs. Don’t forget to add in some wiggle room because they are learning, so there will be mistakes. And like in real life, there will usually be an unexpected expense.  

Detail out every bill that they must pay or would have to pay. Show them ways to manage bills online, in case they cannot make payments in person or via the mail. Let them know there will be monies due each month on utility bills, rent, insurance, and necessities. You can use categories to help them map out priorities and due dates. Using technology may help them manage bills as well. Using a calendar or budgeting app, you can add due dates, categories, and alerts. Show the young adult how to also manage without technology, just in case, including skills like balancing a checkbook. Although the convenience and worry-free aspect of an app reminding you about your light bill is appealing, embrace the old-school ways. 

Saving 

Use a mockup budget and show them how money is earned, spent, and saved. It may be a while before they can have decent savings but encourage them to save anyway. Even a small amount is something they can put back for an emergency. Use this time also to talk about credit and how that works. There are so many free resources available for teaching young adults about credit. There are online courses and even printed information you can access at any financial bank or credit union. A lot of young people get into debt because they are not educated on how credit works. 

Speaking of credit unions, they are connected to an actual secured means of banking. It’s very popular these days to manage money electronically via apps and programs like PayPal, CashApp, Venmo, and Facebook. Even though these sources say they are protected, young adults still need to learn the value and integrity of traditional banking. Make sure they know how to set up a checking and savings account and how to check and manage their accounts. 

No one receives a welcome package to adulthood. It kind of just happens. Despite the glamour of turning 18, life just carries on and you find your place. Our “Aging Forward” blog series aims to help foster parents and youth in foster care have conversations and teaching moments about preparing for adulthood. Life comes at you fast and sometimes even faster when you have entered the foster care system. We hope these lessons are helping to cushion the impact of adulthood.