Generation Z, Kids and money

Being 21 With $30,000, Who Wants To Play?

This past week-end my daughter and I were talking a little about her plans for the future. She is 21 and will be graduating from her 4 year Bachelor program in May. It is a pretty scary time! We all tend to forget those early years when we didn’t know what to do with the rest of our life! Well she is there now! Tons of options but not really sold on any single one. The only thing she knows for sure is that she is done with University – for now anyway. She has been studying and working two part-time jobs for the last 4 years and is looking forward to a little break. When she graduates she will have $30,000 saved! So another big decision for her to make; what should she do with that money? Being 21 with $30,000, who wants to play?


I know some of you may be wondering where the money is coming from (were you?). Well I can’t go into all the details because it is the topic of one of my future post but let’s just say that it was “forced” savings and she will have access to it once she graduates (I bet you can’t wait to read that future post now).

What You Need to Know:

  • She has zero debt (no student loan and she pays off her credit card every month).
  • Doesn’t own a car yet and doesn’t necessarily need (or want) one yet (bus system is working for her)
  • Still lives at home (at least for a few more months…or maybe years!!!).
  • Doesn’t think she wants to stay in Canada.
  • One of her part-time jobs is in a flower shop making floral arrangement and she loves it (has nothing to do with her degree).
  • Loves travelling.
  • Loves shopping, the expensive kind (not sure where she got that from!)
  • Has a long term boyfriend who still has two more years to finish his program.

True, False or Maybe? True, False or Maybe

Before you tell me what you think would be the best use of her money, here is a list I have compiled myself. Can you guess which ones I would recommend?

True , False or Maybe

Did You Guess Right?

  1. Give it all to me! I wish but FALSE.  No explanation needed I hope.
  2. Travel the world. TRUE with some of the money but MAYBE not with all the money. I think travelling is great and easier to do when you are younger before you settle down (assuming you do). She can go and volunteer all over the world! You get to learn about other cultures and other way of doing things and get a better appreciation for what you have at home. Wedding
  3. Have an “average” american wedding! FALSE.  Apparently the average American wedding cost $35,329 in 2016!! (Source: I think that’s crazy (just my opinion, no judging!). I would be disappointed if she used a big chunk of it to pay for her wedding (whenever that may be). It is supposed to be one of the most beautiful day of her life, but really does it have to cost thousands of dollars? Why?
  4. Buy a rental property. TRUE. I know I am in this constant dilemma about rental properties but it is something I wish I did in my 20’s . As long as she selects the right investment property, I don’t think she can go wrong with it since she is so young. Unfortunately, with some of the issues I have had to deal with in the last few years as a landlord, she has no interest in it whatsoever. (I blew itBitcoin
  5. Invest it all in bitcoin! FALSE Sorry even Warren buffet thinks cryptocurrencies will end badly!
  6. Buy everything she has ever wanted (meaning blow it all!) FALSE. A little worried there because she is a spender, the only reason she saved that much money is because of my “forced”saving master plan (Mwahahahaha). Will she manage not to spend it all? It sounds like it’s the plan but who knows.
  7. Start her own businessTRUE. She loves working with flowers and she is very creative. Maybe she could use some of the money to take some business classes, get a few more years of experience and use the rest to start her own flower business. Money may not be top dollars but she would be doing what she loves, and isn’t it what it’s all about?
  8. Buy a home. FALSE. Unless it’s a multi-family unit and she can rent part of it or it is the most amazing deal there is to have. Buying a home shouldn’t be her top priority. She doesn’t even know where she wants to live yet. And the market is high right now.
  9. Invest in dividend stocks or ETF. TRUE. Another thing I wish I knew about in my 20’s : Dividends! As long as she invests smartly, she could reap the benefits of early investing in years to come. But with the market being so high right now, should she wait? For how long? The other day she did ask me about that dividend “thing” I have been talking about (Wow she may have been listening – a little – after all).
  10. Go study abroad. TRUE. She loves travelling and she would like to learn more about the flower business. Maybe she could use some of that money to find a program abroad and just do it. Her boyfriend may not be too happy but I am sure they can figure it out. Love!!!
  11. Stay In School. FALSE It could be an option but I already told you she doesn’t want to (you need to pay attention to what I write!).
  12. Do Nothing. FALSE. I guess she could decide to just leave it in a regular savings account and do nothing with it.

In one hand, it is great for her to have all that money, but on the other hand, it can be a little scary at that age. As parents, we want to help our kids and guide them as much as we can, but somewhere along the way we also have to let them make their own decisions and deal with their own mistakes.

I will do my best to help her, but at the end of the day it is her money – her decision, even if I don’t like it!

Over To You!

So what do you think, what did I miss? What would you do or not do with $30,000 if you were 21?

36 thoughts on “Being 21 With $30,000, Who Wants To Play?

  1. Congrats to you and your daughter Caroline! $30K and no debt, awesome. This will come as no surprise. I recommend a dividend growth stock ETF. Put the $30K in over time (DCA) so she doesn’t catch the market top, reinvest all dividends and add new money whenever possible. Have a great weekend. Tom

    1. Lol, what a surprise! Yes she could put the money in over time and benefit from DCA , she may need to look into fees more closely if she does. I am not sure what they are at $30,000 in Canada or where the best place is. Thanks Tom . Nice week end to you too.

  2. Love your picks! I travelled and lived abroad in my twenties and don’t regret it for a minute. It does only get harder if you start a family later so great advice. I hope she does something bold and enriching, whether starting a business or buying a rental or traveling abroad. Good luck to her and congrats on her upcoming graduation!

    1. Thanks Kat. We are lucky our education system is so much cheaper in Canada:) I am 100% with you, I hope she does something bold and enriching, now is the time. And maybe keep a portion to invest. Pretty cool that you traveled and lived abroad in your twenties! I started but loved Canada so much, I ended up staying:)

  3. How exciting for her! I would recommend the travel as well. I did it when I was 18 and still can’t believe the impact it had. I don’t think she needs 30k for it though. I would have an e-fund and take some to get her started but slow travel. Work her way around a place as some travelers leave you can take over a certain job for a couple months.

    Life changing experience. I would take some of it though and invest no matter what she will be happy to have it when she is done travelling.

    1. Hi DM, thanks for stopping by! I am 100% with you on that one, use some to travel and invest some for when she gets back (or for the future). Anybody who has ever traveled early on, like yourself, can’t believe what a difference it made in their life.

  4. Personally, when I was 21 – I probably would have wanted to blow all the money. It wasn’t until later on that I realized the benefit of savings and investing. I think it is great that your daughter has this much saved (forced plan or not) – to me the most logical thing would to be to invest so she can reap the benefits later on.

  5. Awesome post, Caroline!

    I would use some to travel (a small treat) and the rest invest it.

    For the MOST part I’d invest it in ETFs that track indices making sure she enrolls in DRIP for all of her accounts… AND I would probably use a bit of play money and go all out on a stock or ETF that has really high growth potential and pays no dividends (hold period for a very long time despite the swings). Also, it would be awesome if she had this in her TFSA and somehow (luckily) the stock appreciates a lot, all those massive gains tax free! But of course nothing is certain. Remember though she is young.

    Given age 21, her time horizon is super longggg and that’s one of her greatest asset. She can afford to lose and/or withstand any risks. Plus, it’s only a small sum in this “play” bucket. She will eventually be earning at her job so she will have more money and time to invest in just the boring low-fee ETFs going forward.

    So yes, I would invest small amount of play money, and forget it and never look at it. Of course, depends on the level of her risk tolerance as well. But that’s just me lol… not everyone will feel the same which is perfectly understandable 😊

    Overall, I think it’s okay to have a little bit of fun sometimes with one stock at such a young age 21!! Man, if only we could all be forever 21!!!!

    1. She is lucky she is so young:) Totally agree with you on the TFSA. I don’t think she needs to worry about RRSP yet, she doesn’t make enough. The only thing I am not certain is where to get her started so she doesn’t have to pay an exorbitant amount of fees.
      Knowing her personality, I don’t think she could handle playing the market so not sure if that one is an option. I am trying to remember what I was like at 21…but it has been to longggg:)

  6. 21 is the dreaming age. Congrats her and you on finishing the college, and with a huge saving of $30K for her age! Job well done. For the $30K, I would recommend her find a place (to rent) for her own, unless you wants her to stay. Treat those money as her emergency fund, and don’t touch it unless there is a real emergency. Keep working, and take time to figure out what she wants to do the next. Good luck.

    I wish I were 21.

    1. Hi Helen, no fun money at all? Honestly, I wish she would continue and get her Master but I can’t really make her! I am not in a rush for her to move out but I do want her to have a plan in place.

  7. Wow, that’s almost unheard of. I know too many 50 year friends and relatives that can’t make that claim. Good for her. I am in your camp on the dividend thing, nothing better that seeing that dividend deposited in your account and then being simultaneously reinvested. The greatest power known to man kind.
    I thought I had my act together at 21 but not even close. Good Job!!!

    1. Hi Bob, thanks for stopping by! Well if that make you feel better, I didn’t have my act together at all at 21! Too bad we don’t get to try again:) I am definitely going to encourage her to buy dividend ETF with part of the money. And I really want her to travel too!

  8. I agree with the balanced approach 🙂 is she serious with her current guy? You grow so much in your 20s and find out who you are.

    I say 5-10k travel and invest the rest in a TFSA

    1. Hi GYM, current boyfriend has been around over 5 years! But I totally agree with you , you grow so much in your 20s! I guess time will tell but I do remind her to do things she wants to do or she may resent him for it (I guess that’s my job as a mother!). A good balance seems to be the right approach. Thanks

      1. Awe, high school sweethearts!? Or college sweethearts. YES…! Tell her to read (or you should read) “A Gift to My Children: A Father’s Lessons for Life and Investing” by Jim Rogers (founded Quantum fund, retired in his 30’s, and traveled around the world on his motorcycle!). It’s a book to his two young daughters.

        He said to always let the boy chase you and follow you where you want to go and not to follow them. I do regret a bit that I made decisions for my future career based on my ex in my early 20’s, but I’m glad the way it turned out anyway.

        1. Thanks for the info GYM, I will look into the book.
          What happened to you when you were younger is what worries me, I think she is going to make her decisions based on her boyfriend and may regret it later and become resentful .

  9. Actually if I had 30k at that age I wouldn’t know what to do either. Probably the last option of doing nothing out of fear (losing it). The first $100k is tough work so guard it and be smart about it. Good thing she can consult her mom for that 🙂

    Does she have an emergency fund? Does she want to/need to move out or want to leave Canada for sure?

    1. Hi Lily, I would have been so overwhelmed with $30K at 21! Good thing I didn’t have to worry about it:) She started saving on her own now so she is building up an emergency fund (I keep reminding her). And I think at 21 nothing is sure but the plan is to move away. I am totally on board with it because if I didn’t move to Canada in my 20’s I wouldn’t be where I am today. Best move I ever made!

  10. She’s definitely lucky to start off with such a nice buffer. I’d probably save 1/3rd of it in cash(emergency fund), use 1/3rd to do something amazing whether it be travel or whatever she wants and then save 1/3rd in high quality stocks for the long term.

  11. Great post, Caroline!

    Your daughter is in an amazing position, and it’s great that she has you offering guidance with this money. She sounds like a very responsible person. I like that you’re against bitcoin and I also agree with Buffet. And I like that you’re against buying wasteful things. Your other options all sound great.

    When I first got out of school, I had a student loan around approximately $23,000. If I was in her position then, I probably would’ve paid that off, saved a portion, and then I would’ve gone on a trip. If I was without debt at 21, I would have saved a very large chunk of it. For the rest, I wouldn’t have bought a car, but I’d probably spend some on a trip or two. The business option sounds great as well. Thanks for sharing! 🙂

  12. First time here Caroline. First off, Big congratulations to you and your daughter for ZERO debt after completing her 4 years degree. I would love to know if she pursued engineering degree, if so, may be I can help somewhat more. Apart from that, its great to have 30k and zero debt in student loans. I would strongly say point 9 and 10. or point 9 and get some job and get some experience before opening her own business.

    As far as point 9 is concerned, of course, you can help if she doesn’t know how and where to invest. However, if she wants to keep it simple then I recommend ETFs or some high dividend ETFs such as VYM, VDC, VHT etc.

    Good Luck to her, I am sure she will do great.


    1. Hi DK, thanks for visiting the blog:) We are lucky, education is much cheaper in Canada. She didn’t do engineering but it sounds like my son will(he is in grade 11 right now). ETF is probably going to be a big part of her investment if she decides to invest.

  13. What an awesome position to be in! It’s almost unheard of! If I knew then what I know now (uhhh…index funds were not a thing waaayyyy back then) I’d go with #9 for app. $20K. I’d spend app. 5K on travel or a car, and keep $5K in a cash emergency fund.

  14. Awesome list!

    I would personally develop a “pay yourself first” mentality now while she is young and stuff atleast 5k of that 30k into an Index Fund/ETF. It will ingrain the concept of setting $$$ aside every time your are payed for future growth. It is also hard to gauge if prices are to expensive and you should “wait” to get in. The data shows that it is always best to be in the market instead of trying to time the market.

    I wish your daughter good luck in whichever decision she makes!

    1. Hi Sean, I talked to her about the “pay yourself first” and how to automate the process so you never think about it. She is not quite on board yet, she thinks she will be disciplined enough to go into her account and set the money aside every time she gets paid. I know it’s a mistake 🙁
      Thanks for your comment.

  15. That’s awesome! Being 25 now, I really wish I had saved more throughout my high school years and undergrad studies. She is very fortunate to be in this situation and I hope she makes good use of it. I would probably travel (small portion) and invest the rest in an index fund or a rental property!

    1. Thanks for your comment:) And good for you to be involved in the FI community so early. While I try to teach my kids about saving and investing, none of them are taking the initiative to learn on their own yet.

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