Have We Bred a Monster?

Hi Scott,
 
My teenage daughter has had a private school education. This has cost my husband and I (average working-class people) upwards of $40,000 per year. Early on we saved hard to pay off our modest house and were pleased we could offer our only child a private education. We were looking forward to her finishing secondary school this year, going to the local uni, and thus giving us a break from the inexorable fees! 
 
But now she wants to attend university in another city – at $40,000 per year for a live-in college – to get the ‘full city experience’. (I commute each day to the city but she insists it is too far for her to commute to a uni nearer to home.) She says she is desperate to leave home, and will move to the city with or without our help. She has no idea of how to be financially independent! Is this ‘normal’ privileged teenage behaviour or have we bred a monster?
 
Patty
 
Hi Patty,
 
You’ve bred a monster.
 
Look, even though 18 is the new 13 for COVID-kids, she’s biologically an adult, so you can have a grown-up conversation with her.
 
Here’s how:
 
Explain that you have already spent upwards of $500,000 (pre-tax) on her education … and now you have to focus on saving for your retirement.
 
However, there is absolutely no reason she should be deprived of what she calls the ‘big city experience’.  In fact, part of that experience should involve working a minimum-wage job, occasionally drinking from a goon bag, and sometimes dining on two-minute noodles to make her money stretch.
 
In other words, I’d not only encourage her to move to the city, I’d help pack her bags. The education she’ll receive will make her a much more grounded human being. (And if she can’t hack it, then she can always go to the local uni!)
 
Scott.

My Mother Lives in a Chicken Coop

Hi Scott,
 
I’m in the US but feel like your column and book apply to us over here too, and it’s my favourite tool! The problem is my mom is a serial multi-level marketer. She has lost a lot of money over the last couple decades but keeps truckin’ on, mainly due to social security checks that come from her having been married to my dad for 20 years (they have now been divorced for almost 30). She’s in her 70s and we live in the mountains. She literally lives in a converted chicken coop – she has no running water but does have a composting toilet (and at least the coop has electricity). It’s cold and snowy here. She’s broke and freezing most of the time, kept warm by whiskey and pickleball. Do I give up or build her a house and risk my family’s money? When do you stop trying to help your mother?!
 
Rachel
 
Hi Rachel
 
Happy Mom’s Day!
 
Thank you for being so American. (The average chicken coop in Sydney rents out for $1,800 a week.)
 
Seriously, though, your mum is now 70 years old and is unlikely to change. That chicken has flown the coop. Just make sure she doesn’t get any of your eggs.  

The Golden Child

Hi Scott,
 
My parents ended up losing their jobs last year, and still had debts amounting up to a total of $80,000 (a mixture of credit cards and fixed-term loans). I have been making repayments for these and, by my calculations, I should be able to finish paying them off by October this year. I’m trying to figure out the best way to help them after this. They’re both receiving Centrelink retirement payments each month, which are minimal. I would like to supplement their income, though I am worried about how they’d be spending it. Is it advisable to open up a joint bank account with my parents?
 
Annie
 
Hi Annie
 
Let’s stop for a second and acknowledge your sacrifice:
 
You are an amazing daughter!
 
I’m sure your parents really appreciate what you’re doing (and if they don’t – remind them).

If I were in your shoes, when October rolls around I’d establish some boundaries … and cut off the money. Still, that’s easy for me to type and incredibly hard for you to do. 
 
To soften the blow, I’d encourage them to have a meeting with a Financial Information Service Officer (FISO) at Centrelink, and have them do a Statement of Financial Position and a budget that shows them how they can live off their pension.
 
I don’t know if you can afford to keep funding your parents’ lifestyle, and what ultimate long-term effect will be on your retirement. Yet I’d encourage you to think about this deeply. As they say on the aeroplane safety message, you need to fit your own mask first. 

Scott.