My stepson is in college, and his checking, savings, and credit card accounts are in both his and his mother’s names. He has never managed them himself: before we were married, his mother balanced them, paid the credit card, etc. Now that I handle the bookkeeping for the family, I’ve been doing that.
We’d like to pass these duties over to him, and I’m sure he’s smart enough to handle it. But I learned to handle my finances back in the days when you carved records on stone tablets. So I’m not sure about the best way to teach a young person about personal finances in the Internet Age. I use AceMoney* to track our accounts, and I could get him a copy, too, but I suspect that’s overkill just to handle three accounts, and that he would prefer to do it all online.
So my questions for the SDMB are:
What resources would you recommend as a primer to teach a young person how to manage his finances?
What tools (online or otherwise) do you recommend to simplify handling a few personal bank accounts?
Thanks!
*FYI, I haven’t used Quicken for more than a decade, since they started making it mandatory to update every couple of years, and I won’t recommend it for my stepson, so don’t bother suggesting it. Read the huge numbers of negative reviewsit gets, if you don’t understand why.
I highly recommend mint (Mint.com). I still use it for my personal finances as a way to summarize my ‘consumer’ stuff. I don’t find it very adequate to handle my investments but it’d be great for your son.
It’s intuitive and it does a pretty good job of automatically categorizing spending. The key thing is it actually brings all your data together in one place. I used Quicken in the past (Which I agree is terrible) and even though it costs money and should be much more complicated/advanced I never felt I had the same clarity of comprehensive information I get with Mint.
It also has budgeting tools and goals that are easy to use.
I am old school (55 years old). I have used Quicken for years but did it all on paper for a couple of decades first. You have to learn what money management is all about before you learn to use a shiny tool to do it. He should learn to balance a checking account by hand so he understands what that’s all about. And pay his credit card bill by check a couple of times. Then show him how this can all be made easier by using whatever app you like.
Aside from doing arithmetic on the accounts, get him to save and invest, if not now then when he gets his first job. Open that 401(k) up on day 1 and contribute the maximum amount. Nobody ever said, “I wish I had saved less when I was young.”
If he has any income at all you can open an IRA for him and contribute to it for him (limited by his income of course). Aside from being a practical learning tool and a gift that will grow a lot over the decades, you’ll make it easy for him to contribute when he has a real job. Instead of trying to save up $3000-$5000 to open an IRA while he’s trying to get started he’ll have an account all ready to accept a hundred or so a month in contributions.
At this point the only check I write monthly is my rent; if I lived in a dorm I’d write zero checks a year that aren’t for wedding gifts. I have friends in their 20s that have literally never written a check. The practice of balancing a checkbook, is, IMHO rather needless as a result. The main reason to balance is so that you do not rely on a falsely high balance that hasn’t accounted for your outstanding checks. But in the absence of checks, rarely if ever is there a descrepancy that lasts more than a day between your account balance and your total available funds. I haven’t personally balanced my checkbook in about (counting) 17 years, and I used to work in a bank, so yes, I know how to do it.
My larger concern is that somehow, a teenager without income has a credit card and someone else pays it for him. Take that shit away, today. You are strongly reinforcing that credit cards provide free money, which is the worst financial lie you can teach your children, 1000 times worse than an unbalanced checkbook. He can get a credit-branded debit card for large standard purchases for which carrying cash is inconvenient (textbooks, etc) and take it up with his investors (ie, you) if he wants to make a purchase larger than what’s in his account.
BTW, I understand why they don’t continue to support old versions (very common practice in IT) but I don’t understand why they rig things so that online features like direct download of bank data stop working on those unsupported versions. I end up upgrading about every three years, which I don’t find to be a hardship, but I have found that the upgrades offer less and less benefit each time. I wasn’t familiar with AceMoney until I saw your post and I see they include free lifetime upgrades, which I don’t think I’ve seen in *any *software product. I haven’t had the problems with the actual product reported in these negative reviews, and haven’t needed tech support, but I can see the frustration.
I’d heard about it before, but only just signed up myself, so I’m kicking the tires. I think it may be helpful for him.
I’m like you (two years older), but my concern is that he might resist learning to balance accounts by hand: he’s an art student, and I don’t know what his aptitude for math is. Furthermore, I’m not so sure how well I’d be able to teach him the old way. Hence this thread. I was hoping there might be some good resources online for teaching young people the basics. Anyone?