Financial Advice for 19 year old foster kid? Help!?

[hopefulfirefly]

A friend who works in the foster care system put me in touch with a kid (19) who just aged out of the foster care system. She had been on his case since he was 5 years old, he lived in 16 different homes in his life & was never adopted. No criminal record, did graduate high school, but obvious behavioral and emotional challenges given his life history.

I am a partner in a small family business (manufacturing company), I'm also an adoptive mom myself, and after hearing the whole story I simply couldn't look away. It's been a long & exhausting week- but now at the end of it- the kid is employed by us & has somewhere to live. We own a house on the same property as our business & the upper unit was vacant. Through generous donations of our local community, the house now has basic furnishings & he is able to live there and walk to work.

I cannot begin to explain the circumstances of his life & how desperate he must have felt at times. As an example- he had never had pajamas before (not even as a little kid). He slept in underwear because the foster families he was with didn't use his clothing allowance to purchase him pj's. He also is terrified of bed bugs, because he spent a lot of time in residential group homes for older foster kids & has had plenty of experience with being bit by bed bugs. He had nothing but the clothes on his back when he showed up to work.

Next week, he'll receive his first paycheck, which will net $302.77 per week. He doesn't know the exact net amount of his check yet, but he already said he wants to save 15% of his paycheck. My questions is- how can I explain the need to save so much when he has had nothing his whole life & probably wants so much? He wants to enroll in college & will need a car…although I have some concerns with encouraging a car so soon (for responsibility issues as well as finance issues). I’m not sure how much to encourage him to have as a weekly allowance/spending money/groceries etc? I have a young child so 19 year olds are new territory for me  Ultimately, I have no real control about what he does with his money, although he is taking to my direction and suggestions quite well so I feel he will continue to accept my guidance. Help? Suggestions? Ideas? Thank you!

[creditcardfree]

A friend who works in the foster care system put me in touch with a kid (19) who just aged out of the foster care system. She had been on his case since he was 5 years old, he lived in 16 different homes in his life & was never adopted. No criminal record, did graduate high school, but obvious behavioral and emotional challenges given his life history.

I am a partner in a small family business (manufacturing company), I'm also an adoptive mom myself, and after hearing the whole story I simply couldn't look away. It's been a long & exhausting week- but now at the end of it- the kid is employed by us & has somewhere to live. We own a house on the same property as our business & the upper unit was vacant. Through generous donations of our local community, the house now has basic furnishings & he is able to live there and walk to work.

I cannot begin to explain the circumstances of his life & how desperate he must have felt at times. As an example- he had never had pajamas before (not even as a little kid). He slept in underwear because the foster families he was with didn't use his clothing allowance to purchase him pj's. He also is terrified of bed bugs, because he spent a lot of time in residential group homes for older foster kids & has had plenty of experience with being bit by bed bugs. He had nothing but the clothes on his back when he showed up to work.

Next week, he'll receive his first paycheck, which will net $302.77 per week. He doesn't know the exact net amount of his check yet, but he already said he wants to save 15% of his paycheck. My questions is- how can I explain the need to save so much when he has had nothing his whole life & probably wants so much? He wants to enroll in college & will need a car…although I have some concerns with encouraging a car so soon (for responsibility issues as well as finance issues). I’m not sure how much to encourage him to have as a weekly allowance/spending money/groceries etc? I have a young child so 19 year olds are new territory for me  Ultimately, I have no real control about what he does with his money, although he is taking to my direction and suggestions quite well so I feel he will continue to accept my guidance. Help? Suggestions? Ideas? Thank you!

You are fantastic for helping this young man. I would guess he will be forever grateful!

I would have discussions about wants and needs. And let him know it is okay to have wants, but they need to be prioritized and in line with income (talk about percentages). A new Xbox 360 would be more than one paycheck or 33% of his income. Since you know his pay, you might come up with some scenario budgets. You might take some trips to the grocery store. I would work on investigating purchases(cars/insurance) and talking through them ahead of time. It is also good to let him make some choices you might not agree with too, so that you can later discuss those and determine how he sees those choices after the fact (where they worth the $?) Talk about buying used, waiting to save for something, saving for emergencies, retirement, ect.

Get some books from the library that may help reinforce what you tell him.

Good luck!!

[snafu]

Thank you for taking this teen under your wing. I'm guessing he will live rent free in your unit at least in the short term so long as he continues to work in the family business.

It's wonderful that he's willing to follow your suggestions given his foster family bounced around history. Our DS are new, university graduates, mid 20's so I recall late teens as super busy, trying out 'adult' adventures. I think the 'envelop' system is very similar to labelled 'jars' atop the fridge for expenses. We taught 5% [pay yourself first] jar #1, jar #2 food, jar #3 clothes/grooming, jar #4 transportation, jar #5 entertainment/fun/misc supplies. I remember food was 17%, transportation 15%, misc.6%, clothes 5%. Our guys had us as their Emergency back up; this young man needs to develop an EF for basic expenses via at least 5% from each pay.

I've no idea if 19 y/o would agree to creating a basic wardrobe [jeans, khaki, oxford shirts, T's, 1 dress slack and pair of shoes that can be shined] from Goodwill but his modest monthly income would stretch so much further. Looking 'right' is just as important to guys as gals. Our guys spent so much money on hair cuts at cool salons for grooming to look like there was no haircut!

I've no idea of his interest or if he has a lot of access to a computer. All libraries have computers for card holders. There are books and electronic books no matter his areas of interest to stay up to date.

Hope you enjoy your experience, teens are really difficult.

[marvholly]

You do not say if you are charging him any rent. I would at a rate slightly lower than the REAL world rate of 25% of his income - $50-60/week.

If you were not planning on charging rent then you can put the money in a separate savings account. After he demonstrates some stability and financial sense and when he is ready for a car or college classes you can give him at least some of that money to help pay for either.

I suspect he will ONLY be able to afford buing clothes at resale stores. My income is WAAAY above $300/week (although my housing cost is MUCH higher) and nearly all my clothes are purchased that way. Exceptions for me are underwear & shoes - ick factor & bad feet.

[Miz Pat]

Foster Kid

You really make me wish I lived nearby and could help.

I would tell him to make himself rules for finance, like:

1) Don't use credit
2) Don't spend more than you have
3) Decide what you need for survival - shelter, food, clothing, utilities, transportation
4) Decide what you want: Xbox, a trip, restaurant meals
5) At the end of every week, see: what you earned, what you spent and what you have left. At the end of every month, if you have left over money put it in a bank account and don't touch it - make it an emergency fund.

That would be a great beginning

I pray the best for him and that he gets everything he needs.

[ladonnarosso]

I so love that you are taking time and effort to help this young man. It is going to make a huge difference to his life, even if you don't notice it right away. Thank you.

That being said, it's admirable that he already understands that saving is important. I think the jar/enveloope system is a good starting point for sure. Also, see if you can help him open a savings account. At this point, a checking account might not even be needed, but that can be the next step. Good Luck! Keep us updated.

[Miz Pat]

The 18 Year Old Foster Kid

I would love to hear how he is doing.

And what a wonderful foster care system - that seems to provide the bare minimum and then dump the kids on the streets at age 18!