Move #7: Generational Change

Move #7 is the reason why I wrote the 9 Moves program.

I care about the next generation a lot. When I hear people talk about millennials and how "these kids" are plaguing our society, I get frustrated. Largely because it is painting with a broad brush. Are some young people lazy? Yup. Are some older people lazy? Yup. But this is where we need to judge people on their own merit and not the collection of their peers. This is the Move where we truly invest in the next generation.


We won't be here forever and I think most would agree that we want to leave this world a better place than we found it.  For that reason, I think it is important for people all of sorts to invest in the next generation so they can do better with money, make smarter choices, and innovate better than we did. I want those next in line to do better. I want my daughter and my son to have more success than me and I want their kids to have more success than they did. The best thing we can do is build them up. Whether it is our kids, nieces, nephews, or kids that we mentor, it's important to pass down wisdom and talk about our experiences. 


If your kids aren't at the stage of their life where they begin talking about what they want to do post-high school, it's a good idea to at least start an ESA or a 529 for them. In Move #7 you should have plenty of Flex Cash left over every month, and this where it can go. It is a good idea to sit down with someone for guidance on this because they can hone into your situation. RTM can certainly guide you and answer your questions along the way. 

An ESA (education savings account) has a limit of $2,000 per year per child and works similar to an investment account (529 is similar but has a higher cap and different restrictions). You put your money in every month (or whenever), let's say $166/mo which equals $2,000 and then it grows or diminishes based on how you invested it. If we used our same tracking system from Move #5 and you put $2,000 in every year from age 0 - 18, your child would have just over $82,000 in the account, though you only placed $36,000 in. The rest is growth. This can be transferred to another child and can be used for any and all education expenses. Withdrawing for non-educational expenses results in a penalty. 

I tell parents all the time that a 4-year degree isn't for everyone. Some kids have a passion for diesel and opt for a 2-year trade program, go to North Dakota and make $80,000/year because they do great work. They incurred less cost, got the training they needed, and are happy. Besides, what diesel mechanic needs 16th century eastern philosophy? This is where having a plan comes into play.

Lastly, as your child approaches college I would encourage them to look at community colleges that partner with universities. Sometimes they can do the first 1.5 years at community college and transfer into the university seamlessly. Also, as a fun note for parents, kids that work 10-20/week while in college have better GPAs


Once your kids' college fund is working and you've developed a plan, you can press forward to Move #7. If you don't have kids, this Move can be bookmarked for later as it's rather easy to go back and complete!