Q. My daughter Linda is 17 and getting ready for her senior year in high school. She also is getting what used to be called "uppity," until she doesn't even sound like my child any more.
We're simple working-class family in a simple working-class neighborhood, and she's putting on airs like Gloria Vanderbilt.
Apparently this is because my mother-in-law is giving $8,000 to each of our two children -- her only grandchildern -- to send them to college. For us, this is a blessing. I'm not sure they could go otherwise.
To Linda, it's college, and a stereo, and alot of clothes, and maybe an apartment after her first year. She talks constantly about these things. When I talk to her about spending the money wisely, she says, "It's mine. I can do with it as I like. It's for my education.
Linda thinks $8,000 is a lot of money, but even at a state college or the university tuitions are going up and up. And at the same time, she's spending every penny 12 times over in her head and acts as if a stereo is part of an education.
I don't know what she'll do when she gets her hands on that money. That's why I don't think she should. Her grandmother says she can have it when she graduates from high school, but I think we should have some say-so.
I'm not trying to take her money, but I guess I don't trust her the way I should. She's never even had a savings account, and she doesn't know about budgeting.
A. Great expectations have been the downfall of a lot of people, but we suspect smaller expectations can do a lot of damage, too.
In either case, it often seems to throw incentive out the window. The smartest, most industrious young person thinks she's a princess.
You'll probably hear her mention her "trust fund" to friends as if it were a legacy of millions -- and in her mind it may as well be. If a child isn't used to money -- if she can't believe it only can be spent once -- then she's going to be swamped.
There are a number of things you can do to help her, starting now.
She should, of course, be earning money for college. Trust fund or not, a child will handle her school money better if she has had to earn her own allowance. This is what teaches selfreliance.
The money earned goes into a savings account, but a high school senior needs a checking account, too. In the first few weeks of college, her checkbook will be the most important book she has, but it shouldn't be her most baffling. That's why she needs practice.
This account is the place she keeps her fixed monthly allotment -- as little as she can get by on -- which she earns, or, if necessary, you provide. Here she learns to fill in the stub before she writes the check; to keep her withdrawals up to date; to circle her checks and deposits when the statement comes back and to reconcile her checkbook every month to find the true cash balance. She'll still bounce a few checks, but by the time she goes to college she's had that particular baptism.
This experience is not, however, enouth to make your daughter ready to handle $8,000. If you think she'll be that wise, you may be settling her up to Jose.
Instead, help your daughter divide the $8,000 into four parts -- one part for each year -- but with an inflation rate that makes it bigger every year. The money for the first half of the first year goes into a special savings account, with tuition, room and board paid out of that. Before school starts a lump sum is put into your daughter's checking account for books, transportation and emergencies. If a monthly allowance is needed, it is automatically transferred from the savings to the checking account each month.
The money for the second semester and the next three years is invested, probably in treasury bills or certificates of deposits. You and your daughter will make these decisions with a trust officer of the bank, who also may advise you to put these and the savings account under both your names, requiring both signatures to withdraw. Whenever you deal with money -- especially in a family -- you want to prevent a problem before it arises.
Basically, your daughter will get more out of this meeting with the trust officer than just good advice. It should be solemn enough for any princess to keep her sense of grandeur, even while her money goes into escrow.
It also should make her understand that $8,000 is a lot of money -- and yet not very much. That's why he probably will tell her about loans, too, which would surely be necessary if she went to school out of state.
Anyone going to college, eigher full or half-time, is eligible, on a first-come first-serve basis, for as much as $2,500 a year for undergraduates (up to $7,500 in four years). Postgraduate students can draw up to $5,000 a year (up to a total of $15,000 for all federally backed loans). These are repaid at 7 percent interest, starting a year after the student leaves school.
Maryland residents apply to the Maryland Higher Education Loan Corp., 2100 Guilford Ave., Baltimore, Md. 21218 (301 -- 383-4150); Virginians to the Virginia State Education Assistance Authority, 501 E. Franklin St., Richmond, Va. (804 -- 786-2035) and District residents -- and students going to school in Washington -- apply to the Higher Education Loan Program, 1001 Connecticut Ave. NW (861-0701).
And if these wells are empty, there is often a "lender of last resort" they can tell you about.
The D.C. Bankers' Association (783-4522) also expects to make loans soon to students from the metropolitan area, although they won't duplicate loans granted by these other agencies.
By helping your daughter understand the mechanics of money, and the seriousness of it, you're giving her the final touch of independence she needs. She won't get it in Math 101.