An old post I started but never finished...  I suppose mostly on the 'kid money' topic.  Adult kid money.

MM(23) came home last month to attend a movie premier.  It was a movie that MH worked on (and spent a lot of time on) but took about 10 years from start to finish.  

I told MH he had come full circle.  He had approached the producer/director at their last film screening (maybe 10 years ago) and offered to help on their next project.  Very slow and meticulous re: extremely low budget.  (An expected timeline of a few years, but I expect the pandemic and maybe other unforeseen events extended the timeline another 5+ years.) But anyway, last week MH was reading their next script and giving notes.  

MM(23) is very much enjoying his new job and enjoying life.  When he got his first paycheck he told me that he bought up a few concert tickets.  & he's since talked of enjoying and spending some of his money.  So I am relieved he isn't being too extreme and miserly. 

His commute sucks but for now he is enjoying exploring after work and going on hikes (waiting out the traffic).  He told me he wanted to try camping one night, it was only $2.  A break from the commute, and something different.  He's spending time with friends in the area and bonding with grandparents. 

MM(23) is saving 80% of his paycheck, same as MH and I did out of college.  I am completely fascinated by this because I don't believe we have ever discussed this with our kids.  It really is the whole, "Do as say not as I do" factor.  It doesn't matter if we say it out loud or not, the kids model how we treat money.  I can tell you that our personal motivation was the sky high cost of Bay Area real estate.  My kids have very different motivations.  MM(23)'s motivation is he wants to retire in 10 years, something like that.  Is what he has alluded to in the past. 

So anyway, I am completely fascinated by the 'doing what we did' aspect, seemingly through osmosis.  But I had a bit of a lightbulb moment when I took TM(21) out to dinner the other night.  We were talking about things people mindlessly spend their money on.  & how he has a friend with a FT job and free room/board, who literally just told him that she has $0 to her name.  He is just...  "Does. not. compute."  I think he was a little extra confused re: her stating in the past that she was living at home and piling up money.  ???  & I said something along the lines of, "I don't know what other people do."  It comes up every so often, "what do you not buy that other people buy?"  & I am always stumped because I don't know what other people buy.  But maybe if you grow up in a house where there's very little extra-cirrcular spending, where there aren't daily coffee runs (daily spending on anything; coffee is just the obvious example).  A house where no loans were ever taken out, where cars were modest and kept a long time.  A house where we ate 99% of our meals at home.  When you add up all those infinite little habits they grew up with.  I suppose it makes sense.  & these are just the more obvious things that people talk about.  I am sure there are hundreds of other habits that we just never think about.

Anyway, I was pondering a bit when I was listening to Ramit Sethi's podcast the other day.  I think that MM(23) is living his rich life, which just happens to cost very little.  What he is saving money for is his own little place in the world (ideally without roommates, at some point in the future) and maybe more traveling.  Concerts & traveling, is what he is spending is money on at the moment.  While I personally enjoy my career and have mostly loved my jobs, when I look back to our first 2 years out of college, we held our nose a bit at the jobs we had to get us to where we wanted to go.  In contrast, MM(23) has a very 9-5 job that he loves.  & I mean, he has room to get a job that is more what he envisioned and so on.  (For now, he just took what he could get.)  But he seems pretty happy. 

MM(23) will also eventually want to buy a more safe and reliable car.  I think that decision will be made for him at some point (he's driving a 23yo car with 230K miles.) <---He's been extremely spoiled re: low maintenance car that has always been driven very little.  His new commute *and* the fact that I don't think we've done any repairs for 24+ months...  Will see how he feels about it when the car has 230K-mile repairs.  When the time comes, he will buy a $10K EV that he's had the money for a long time already.  If anything, that will lower his expenses, because he can mostly just charge here and where he is living now (for free).  & I mean, he might go cheaper or he may decide he has enough money to buy something nicer.  My kids have always balked at their first car being a $10K car.  But like I said, the old 'beater' car hasn't needed a repair in 2 years.  So I don't think they grasp the reality of a $5,000 car.  I am just, "Dude, your grandparents just handed down your first cars and paid for most of your college.  You don't need to buy a $500 or a $5,000 car.  You can skip that step."  But for whatever reason, it is something they resist.  I've encouraged a $10K car because he could buy a slightly used EV with a very long warranty.  It would be very economical.  (He's said that he plans to buy a used EV when the time comes.)  It will be interesting to see if MM(23)'s tune changes now, as the money piles up.  I can tell you it won't change a lot, but maybe he could see the value of a $15K EV, and then not thinking about buying a car again for a couple of decades.

When MM(23) was here, we tended to some financial chores.  He took my name off of his checking account.  All I know from this point is that he graduated college with $25K net worth and is now saving $5K/month.  I will know very little going forward, unless he wants to volunteer more.  & I suppose that's not entirely true as he asks me for investing advice and help with his taxes.  But I will be a lot less in the weeds.

We did go to the one CU where the kids are getting 7% on $500.  Which again, was an incredible learning tool for them (when they were smaller kids who didn't have much more than $500).  It was a 5 star experience and I joked I should switch over to this CU (though I won't because I am very happy with my current CU, even if it is much less fancy.)  I suggested MM(23) should just keep my name on his account and not mess with it.  The 7% was supposed to end when he turned 18.  He agreed.  We just went to the CU to pull out the excess.  It had been 4 years since he had made a withdrawal.  While there, he was offered a $30K car loan and a $20K credit card.  He declined, but was amused.  I believe this is the CU that is always sending him $60K car loan offers.  Anyway, I thought these offers were a little crazy given their entire banking relationship with MM(23) is this $500 account. 

At our primary CU, I suppose he didn't need me there to get my name off of his adult account.  But he had some questions along the way.  He did ask to switch his (useless $500 limit) student card to a regular card.  He was eligible for their fancy rewards card & they gave him a $20K credit limit.  I think he would have declined and taken a lesser card, just because it sounded ridiculous.  But I told him to take the better rewards and then he won't have to go through this hassle down the road when things may change.   4% cash back for gas (useful re: his current commute) & 3% cash back at restaurants.  

I also told him he should report his income to his other credit card, so he can get a more useful limit and not worry about the utilization in the future.  (I think he gets 1.5% cash back on everything.)

& I told MM to think about if his priority was going to be investing or saving for a home down payment (or whatever else his priorities might be).  It's probably somewhat moot because the max IRA amount is  about 10% of his income.  He will probably do that.  (& I mean, front loading a bit re: excess cash.  He will only work FT 3 months this year.)  I told him I'd do some tax planning for him.  & then it will be ROTH versus Traditional, and infinite other financial decisions.

After we got home from the CU, I looked up the current status of those 7% interest accounts.  Those no longer exist.  This CU is called Schools CU, something like that.  I had not thought about it before, but what stood out to me (as I looked at their current savings account offerings) is they have a 6% interest account for school employees.  Some sort of CD type product where you put money in during 10 months of the year, with the idea that you have income during unpaid summer months.  It's a good time of year to discover these accounts, that is for sure.   I told TM(21) we needed to go down there in person and ask more about it because it wasn't very clear from their website.  It looks like you can do a large lump sum deposit and the max on the account is $25,000.  So that is very enticing for someone who has $20K+ cash in savings.  If he didn't have so much cash, I'd move his college fund to this 6% account (in his name, because he is the only school employee in our houshold.)  I suppose that is a question I can ask though.  If you really do have to be a school employee.  They don't require paycheck direct deposit or anything.  It never hurts to ask.

Good marketing on their part though.  I think otherwise there was about a 100% chance my kids would close their 7%-interest accounts and never utilize this CU.  The downside is they refused to let the kids link their bank accounts to external accounts when they were minors.  Maybe that has changed and is also something we can ask about (now that they are adults, maybe they can move their accounts online).  This made this CU extraordinarly a PITA, having to literally go in person to do any banking (something I have personally never done.)  & even after a year or two of talking about becoming a teacher...  Duh.  It hadn't occured to me this 'Schools CU' might have some nice products for a school teacher.  But given the gold star treatment we got last weekend and these enticing high interest options for school employees...  They may have secured a longer term customer.   Not sure how long otherwise, until either TM(21) or I figured this out.  A fail on the marketing side is I don't recall getting any mailings or notices in recent years about how they do cater to school employees.  Maybe they presume it's obvious.  Whereas I had never given it much thought, re: accounts I signed my kids up for when they were very young. 

At dinner when we were talking about money stuff, TM(21) did bring up savings bonds.  He had heard about them somewhere.  I told him I noticed the other day that I Bond rates were higher than his bank accounts were paying.  But I told him, "You need to talk to that CU about that 6% interest rate first.  Sounds like a better deal."  So we have loosely scheduled that for October.