I mean banks, car dealerships, credit cards. DS just graduated from college. he got a decent job as an accountant $47,000 a year and works as a bartender on weekends (tips are great). Very little tuition debt.
He goes out to look at purchasing his first car. We owned his other ones but he was making most of his tuition payments. The dealership tells him he qualifies for $30,000 for a car!
We have told hime we never bought a car that expensive just out of college. That is just crazy!
The credit card apps are rolling in too. They dangle this in front of young adults and they fall for it. Another thing. The colleges tell them how much they can expect to make in the field they are in. Totally unrealistic for someone at their first professional job. It took my older two 6-8 years to make what the college said to expect and that was after they got some experience and masters and doctorates.
Some friends of ours are upset with their just-graduated-from-college son for this very thing! They paid all his expenses through college because it was important to them that he be able to come out of school without debt. Now he has a first job (not sure what he studied or what the job is), and his very first action was to buy a $45,000 sports car. At least that's what I heard it cost. I saw it, and it is gorgeous.
But this is a kid who is still living at home with his parents. I'd think it'd be more important to save for a place of his own before getting the best wheels on the road. In all fairness, I understand that the used car they bought him when he was 16 was wearing out, and he needed a new car -- but he could've had something quite nice for half the price.
As for credit cards, my just-finished-high-school girl is drowning in offers.
Here's the one that really gets me though: We did the FAFSA and got no financial aid (didn't expect it really, though I was hoping for work-study), but they offered her 150% of the cost of her college in loans. We did not accept the loans, but her college is RABID to see her take them. They're PUSHING HER to get into debt.
Because it's not the job of lenders to prioritize people's lives. , then they should be able to figure out what they can afford.
I can believe that. It looks to me like Americans aren't very good at considering their overall budget when they're making a major choice. Most people just say, "I qualified for this much, so what can I get for that amount?" This is what we get for being a consumer-culture.
That's why parents like you need to stay involved in their kids' lives and finances. If you teach him how to properly monitor his bills and income then in a couple years he could afford to do this. I was married at 21, just after I graduated and my DH had just purchased a car. We bought our first house 2 years later. But DH is a master of money and we have never been house poor or even really struggled. We budget like crazy and always know what we can afford to do before we do anything. But I didn't learn any of this from my parents, it all came from DH. If I hadn't gotten married I would have been screwed cause I am a huge spend it when you got it kind of girl!
I agree that young-adult children still need guidance. Navigating the world of first cars, first houses, starting retirement savings is tough -- and much of the information out there is conflicting: On the one hand we hear that "we deserve" this and that lifestyle, on the other hand we hear that we need to live within our means and save. And the world is going to be tougher and much less forgiving for our children's generation. We need to continue to provide advice for those first big purchases.
This guy is a college grad accountant (so he should be good with numbers). He should have an idea of what he wants to spend. (What he can afford each month).
My dad was a CPA, yet had little grasp of his own personal finances. Being good with numbers, being able to balance other people's money, being able to find mistakes in the millions . . . doesn't always translate into personal responsibility when it comes down to "My old truck is in decent shape, and I should keep driving it another two years, save for a good downpayment, THEN buy something shiney and sexy." It doesn't translate when so many parts of society push just-graduated kids to start living large, to throw caution to the wind in their young professional years (before they're forced to settle down to the mini-van).
