Guiding adult and near-adult children

My daughters (one will graduate university this fall, the other will be a junior) have been collecting COVID unemployment, much more than they were taking home from their part-time jobs, while living at home due to closed campuses.  They have 4-digit bank balances (one is actually close to 5) where they are used to 2 digits.  They are also feeling stagnant, and stifled in the online classes.  DD1 has only two classes to complete and thinks she could be working full time.  They want to move out.

I have been trying to get them both to use YNAB, but they haven't seen the value yet -- first because they "had too little", now because they have too much.  The usual monthly categories don't make much sense when their current income dwarfs their current expenses.  But that income will drop sharply at the end of this month, and they have no idea how to pace it.  I suggested setting up categories for a 6-months-rent emergency fund and a car fund.  They say they have 6 months' rent, based on their research, and are scouting apartments within bicycle distance of where they are job-hunting.

Regardless of how I may feel about their readiness, I don't think they have any clear understanding of how their resources relate to any hypothetical future life (and DD1's life will be changing within a few months in any case).

How can I help them make sense of their finances?  (Or anything else?)

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  • I think saving money is always easier when you define your intentions. A small emergency fund is a good idea, but if they want to move out and get a job, they should start saving startup expense categories for those, too (in addition to an emergency fund). These can add up quickly during a young person's life change. This will depend on what area you live in, but here are a few things I've repeatedly come across:

    - Deposit for a new apartment (usually equivalent to 1-2 month's rent)

    - Fee for landlord to run credit check

    - Living utilities including:


    *Gas / electric / water

    - New workplace appropriate wardrobe: suit, blouses, skirts, shoes, a purse

    - FURNITURE, linens, kitchenware, appliances, and home decor! This one always gets me

    - Movers! Uhaul rental?

    - Background check fee for new job (some jobs require, some don't)

    - AC unit or heater depending on where you live


    Maybe have them browse around online to get an idea of what they might spend on each of the above. Good on your kids for trying to live within cycling distance to work! That should save a lot of time and money.

  • Hi Herah !

    I'm not sure how motivating DD1 will find it, but while she's in school she still qualifies for a free year of YNAB through our College Program

    That being said, have you browsed through any of our support materials? Jesse wrote a blog post some time ago on Why Do You Need A Budget.  There's also Do I Need A Budget If I'm Cheap? that talks about having ample money (but no solid plan for it).

    There are a few videos about How To Teach YNAB on our YouTube channel, which may help, too! :)

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  • P.S. - If they are close to 5 digit bank account balances, their money should begin making them money. It might be a good idea for them to research a high-yield savings account, CD, low-cost ETF, or index fund to invest their money in.

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