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?
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?
Did You Guess Right?
- Give it all to me! I wish but FALSE. No explanation needed I hope.
- 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.
- Have an “average” american wedding! FALSE. Apparently the average American wedding cost $35,329 in 2016!! (Source: Mustardseedmoney.com). 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?
- 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 it)
- Invest it all in bitcoin! FALSE Sorry even Warren buffet thinks cryptocurrencies will end badly!
- 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.
- Start her own business. TRUE. 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?
- 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.
- 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).
- 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!!!
- 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!).
- 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?