How to teach my sister financial responsibility despite her tendency to overspend?

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  • #94642 Reply

      I’m seeking some parenting advice. I’m in my late 20s and currently supporting my younger sister, who is in college. Her tuition is fully covered, so she’ll graduate debt-free. Her rent is $1200 monthly, of which she contributes $200 from her $600 monthly income during the academic year, allocating the remainder to her food and entertainment needs.

      She’s expressed a desire to have a car for her school years. Over the summer, she’ll be earning $6500/ month. I’m considering purchasing a car for her that’s under $35,000, with a down payment of between $10,000 to $20,000 from my side. I aim to have the car loan under her name to aid in building her credit history. In the event of my absence, I’ve ensured she will inherit sufficient assets and funds to sustain her without the need to work. While I’m confident about her securing a well-paying job post-graduation, her spending habits concern me. For instance, she recently took a trip to Paris with friends and purchased a designer bag.

      I’m grappling with how to guide her towards understanding and practicing savings, especially considering her potential for a comfortable financial future. How can I teach her the value of managing finances wisely, ensuring she doesn’t live beyond her means?

      #94643 Reply

        Nope. She needs buy in. And has ZERO need for a car that needs a down payment of $10-$20k. She needs a car she can afford on her own. Insurance will be higher on a car that is that expensive and also financed.

        Mom of three boys here – they’re being matched $ for $ up to $2k for their first cars. You don’t drive your dream car first. You have to work for that.

        #94644 Reply

          You’re not teaching her anything by giving her everything..

          #94645 Reply

            Why are you buying a car that expensive? Buying a car that expensive on that salary is starting off on the wrong foot. You can get something very reliable under $20k.

            #94646 Reply

              If your goal is to help her build credit, I think having her as an authorized user on a credit card is a better choice. You can either trust her to have the card and use it only for small items (and she pays back every month), or you keep the card and spend it and pay off every month.

              If I could go back, I wouldn’t have bought that expensive of a car when I got my internship since internships are a finite of time. You’re also speculating that she is going to find a job as well (not saying that she won’t but reality is that is rough).

              Recommended: How to teach 14 year old to budget money?

              #94647 Reply

                So what’s the point of graduating debt free if you’re going to put her into debt with a car she doesn’t need?

                If she’s making 6500/month and your covering most of her bills she can buy a used car cash.

                #94648 Reply

                  She needs a hoopty to learn to appreciate things. Let her buy her own first new car when she graduates and can afford (and appreciate) one.

                  It’s hard because we want to “help” our kiddos but we cannot enable them

                  #94649 Reply

                    If she’s buying designer handbags instead of putting money towards a vehicle, she doesn’t want one that bad, and you buying it for her will only enable her spending habits further.

                    #94650 Reply

                      I literally couldn’t use my windshield wipers if I pressed the gas pedal with the car I went to college. It built character.

                      A solid used Toyota will get her through school.

                      #94651 Reply

                        Have her buy her own car for starters. And she doesn’t need one as expensive as you’re wanting to get her. She needs to have pride in her hard work or she won’t appreciate it enough or take care of it properly. Secondly, if my butt got you to to Paris, I’d buy something or many something’s too and I’m frugal and rarely spend anything on myself.

                        I think your expectations are a bit too much for her, as you are enabling her instead of her learning through experience.

                        #94652 Reply

                          first of all, travel and a single purchase isn’t necessarily poor spending habits. I purchased a designer bag when I was 17 that I still use as it hasn’t fallen apart. My friends go through several purses a year.

                          I never think travel is a waste. Honestly, until she has a regular income there is only so much you can do. $400 a month on food and entertainment is pretty good already. I would just make sure she starts saving for retirement now, and teach her to pay herself first, but otherwise let her finish school.

                          #94653 Reply

                            That car is WAY too expensive. A 14-year-old Corolla is what she needs until she can buy it herself lol.

                            #94654 Reply

                              Quit buying or paying for things she wants. If she wants a car she should pay for it and an older model affordable for her. They won’t learn until they have to earn and save for it theirself.

                              #94655 Reply

                                Sounds like she needs to hear “you could have bought a whole car for what you spent on a trip to Paris.”

                                Also, why do you think she needs such an expensive car? What’s wrong with an early 00’s Toyota Camry or something of that sort in the $5k range?

                                #94656 Reply

                                  I teach classes & offer coaching in just that for ages 12 to college students. I learned with my own kids they won’t listen to me, but a total stranger saying the exact same thing they will absolutely think they’re brilliant! lol Let me know if I can help.

                                  I have a class coming up starting in a few weeks if a group setting is ok for her. I also do one on one coaching which really helps keep people accountable as well and may be a better fit for what you’re trying to accomplish.

                                  I taught for Robert Kiyosaki’s (Rich Dad Poor Dad) students for years, but really prefer to work with younger people as it is so rewarding to watch them achieve amazing goals by the time they’re 25!

                                  #94657 Reply

                                    Do not buy her the car. Period. If she can’t finance it herself, she doesn’t need it. That is how people learn.

                                    The best thing you can do for her is teach her how to make and use a budget and the difference between needs and wants.

                                    #94658 Reply

                                      Umm. She needs a cash car. That is VERY generous of you but she needs to buy her own new car. Get a $7k honda and let her run it in the ground which trust me she will do. Nope nope. AND have her pay you back for that car during the summer. She can give you $2500 towards it.

                                      And if she wants to buy designer bags- she can fork over a little more for rent.

                                      She also needs to pay her cell phone bill and whatever other little luxuries she wants.

                                      And when she gets this summer job, teach her about savings and make her save.

                                      #94659 Reply

                                        Are you paying $1000 a month for your sister’s rent? I wouldn’t even think of getting a car at that value. We bought an outstanding Volvo station wagon (8 years old) that is still driving amazingly 8 years later (now 16 years old) for only $8000. Your sister needs a little bit of a reality check.

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