The following is the tenth story in the Grandpa Moneybags series. Created by Hurlow Wealth Management Group, Grandpa Moneybags is a fictional character who shares lessons that parents and grandparents can use to teach the next generation of wealth holders. This lesson begins with a gift of college savings to offer parents and grandparents a way to start conversations with young teens on exploring potential career options and discovering interests before college.
Do You Want To Go To College? Grandpa Moneybags Lesson #10
by Theresa Claire, CFP®, CAP®
"Can I order the lobster?" Keith asked his dad while looking at the fancy menu.
"It's your graduation dinner, buddy. You can order anything you want," his father, Mark, replied. "That goes for you too, Bobby. Even though your 6th-grade promotion ceremony is not until tomorrow, this is a celebration for both of you."
"Eww, I don't want lobster," Bobby complained.
"Just order what you want," Mark clarified.
During dinner, Keith sat beside his grandfather, Charlie Kest, whom he affectionately called "Grandpa Moneybags."
"So you're officially a high-schooler; how does it feel?" Grandpa Moneybags asked.
"Honestly, I haven't thought much about it. It's just another school, I guess." Keith replied while dipping his lobster in butter.
"I'm a little nervous that there's going to be a lot of homework."
"Yeah, 'cause you'll actually have to do work." Keith's younger brother Bobby teased from across the table.
"What about you, Bobby? Are you looking forward to middle school?"
Bobby shrugged without looking up from the burger he was devouring.
"I'm going to try out for the school musical." Keith suddenly remembered.
"I didn't know that," Keith's mom, Katie remarked, surprised. "Were you inspired by Hamilton?" She and her husband recently took the boys to see the live musical.
"This year, the high school is going to perform Spongebob the Musical. That sounds like fun. Some of my friends are going to be in it."
"You would be a perfect Squidward!" Bobby razzed.
Keith laughed, and the whole family spent the next few minutes comparing each family member to Spongebob characters. They ultimately decided that Mom, Katie was like Sandy, Dad, Mark would be Spongebob, Bobby resembled Patrick, and of course, Grandpa Moneybags could play Mr. Krabs.
"What about me?" Aunt Abby asked who had flown in from New York for the celebration.
"I know. Mr. Krabs has a rich daughter named Pearl. I think that suits you best." Katie chimed in, failing to tell her sister that Pearl's character is an insecure and emotional whale.
"Sounds good to me!" Abby grinned while Katie exchanged a knowing glance with her husband. Keith observed the silent exchange and couldn't help but chuckle.
After dinner and over dessert, Keith and Bobby received some graduation presents from their parents and Aunt Abby. Then, Grandpa Moneybags slid envelopes to Bobby and Keith. Inside the envelopes, both boys found greeting cards, but folded up were statements for CollegeChoice 529 accounts.
"You're giving me $51,112? Is this for real? Keith asked, finding his name on the statement.
Bobby pulled his brother's page down to see the balance. "Mine says $42,399."
"Do you want to go to college?" Grandpa Moneybags asked his grandsons quickly, recognizing the shock and confusion he saw on his grandchildren's faces as well as everyone else at the table.
Bobby shrugged and Keith responded, "I guess so." Not exactly the exhuberient response their grandfather was hoping to see, but he understood that they are still young.
"You may not know if you want to go to college yet. ..but this money is earmarked for your education. When you were born, your grandmother started these accounts and put in $2,500 each year. The returns were better last year, but I'm going to increase those contributions to $3,750 this year, so you should have close to $70,000 in the account by the time you graduate high school. This money is only for college, so don't think you're going to use these funds to go out and buy a car.
Now if you decide not to go to college, I can do something else with the money. Maybe I'll go buy a car," he said, winking at Keith.
To Katie and Mark, he said, "I get a tax credit in Indiana for making these contributions. We didn't talk about this before because I wanted it to be a surprise. I'm not sure if you have separate college savings accounts, but you know how important education is to me and was to your mom. She and I talked about when we would tell you..." Charlie paused and looked knowingly at his daughter, Katie. Although it had been several years since his wife passed, Charlie still got choked up remembering his conversations with his late wife, knowing how much she would have enjoyed being there to see their faces when they presented the surprise.
"This is such a generous gift and a wonderful way to remember Mom's legacy. Thank you, Dad." Katie said and gave an instructive look to her oldest son.
"Thanks, Grandpa Moneybags!" Keith responded.
"Yes, thank you, Grandpa, Moneybags!" Bobby jumped up and hugged his grandfather.
"Your grandmother didn't want you to worry about how much college costs, but I do want you to think about the value of your education. Tuition is a worthwhile investment most of the time, but some degrees pay off more than others, and the return on investment is higher at some colleges than others. I know that college seems like a long way away, but I'm hoping you both might like to start exploring career possibilities this summer, and over the next few years, we can go on college tours during school breaks. What do you think?"
"I think that's a great idea, Dad! I had no idea what I wanted to do in my first year of college, and I struggled in my classes, but when I decided on a career in design, it was so much easier to focus. If I had figured that out in high school, I would have been better off," Charlie's daughter, Abby, contributed.
Katie and Mark nodded in agreement, hoping their sons would respond positively to the idea but not wanting to have too much influence since the teens tended to reject suggestions from their parents.
After an awkward silence, Keith spoke up, "Well, I have no idea what to study in college, much less for a job,"
"Besides playing video games," Bobby interrupted.
"You're one to talk!" Keith shot back.
"There are plenty of jobs for people interested in video games! That could translate to software development, writing, animation, or many other possibilities. Heck, even pilots play video-game like simulators. As Abby said, once you have a general idea of a career you want to do, the courses you take in high school will make more sense. Of course, your interests will probably change between now and the time you graduate, and that's ok, but I just want you to start thinking about it."
"Sure, Grandpa Moneybags! I'll think about it." Keith said, hugging his grandfather.
About a week later, Charlie received two notes in his mailbox. Bobby's thank you card was short and to the point, but Keith had taken some time with a thoughtful expression of gratitude.
Dear Grandpa Moneybags,
Mom reminded me to send you this note. I'm supposed to say thank you for this incredibly generous gift of college money. I'm supposed to say how it will help me fulfill my dreams. But I don't really know what I want to do for a job in the future and it feels kinda scary.
What I will say is thank you loving and caring for me. I appreciate all the time we spend together during school breaks. I like the idea of exploring opportunities that college has to offer and going to visit some schools with you sounds fun.
Thank you again, Grandpa, for everything you do for me. I am so lucky to have you in my life.
With love and appreciation, Keith
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