Getting Ready for Managing Finances at the Age of Majority

Young woman holding a piggy bank out to youOctober 2015 | Links updated, June 2016
This resource is part of the series Getting Ready for When Your Teen Reaches the Age of Majority: A Parent’s Guide.

When young people with disabilities reach the “age of majority,” they gain the right to manage their own affairs, including their money. In most states, this happens at age 18.  Legally considered as adults, they may take charge of financial decisions large and small. But will they be prepared to make financial decisions for themselves? Will they have the money skills and basic understanding of finance they will need?

This tip sheet considers steps that you (as parents) and others (such as teachers or transition specialists) can take to help your young person with disabilities learn and practice basic financial management skills, skills that will certainly come in handy in the future.

Quick-Jump Links

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Developed by:
National Secondary Transition Technical Assistance Center (NSTTAC)
National Post-School Outcomes Center (NPSO)

In collaboration with:
Center for Parent Information and Resources (CPIR)
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The Importance of Starting Early

Managing money matters–even with support–involves many skills. Starting with the most basic, it’s about being able to:

  • recognize the value of coins and bills; and
  • count money and subtract it, too.

These are skills most of us learn in school, and they provide the foundation for future learning about how to manage money.

For many young people with disabilities, money matters can be challenging. That’s why it’s important to start early working on developing those skills. This includes:

  • Using the IEP meeting to advocate that your son or daughter’s IEP include goals focused on money management.
  • Practicing money skills at home and in the community–for example, let your son or daughter hand over the money to the cashier in the grocery store and count the change returned.
  • Giving your young person the opportunity to decide how he or she will spend whatever allowance or gift money he or she has.

There are also many tools available that schools and families can use to teach basic math and money skills (see the list of Helpful Resources at the end of this tip sheet). All this lays the foundation for later, when money matters get more complicated.

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Areas of Financial Management to Consider

What decisions will your son or daughter face in managing money, and what skills will he or she need? Consider the common activities adults do when managing their money. Adults:

Keep a bank account, including checking and savings accounts.

Talk with the bank about their financial needs or concerns.

Make and keep to a budget that balances expenses and income.

Understand money basics, including how to pay bills, use credit or debit cards, and make money transactions.

Keep financial and money records (e.g., asking for records, keeping track of income to prevent overdrafts).

Make financial plans for the future.

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Strategies for Providing Support

In light of the money skills and activities just listed, you can see why it’s important to start early developing the skills your son or daughter will need when he or she reaches the age of majority.  For many youth with disabilities, it will also be important to put supports in place to help  your son or daughter manage his or her money and financial matters as much as possible. What skills will he or she need? If any of these skills are lacking, what supports would help? Supports can include:

Using a money management service, where a provider can teach your son or daughter about money management and how to keep track of money.

Using direct deposit and automatic bill payments.

Using joint checking accounts that will help in keeping track of your son or daughter’s bank account.

Having family/friends/extended family supports in place the young adult trusts and could call or contact for guidance when needed.

Having co-signers on bank accounts to help your son or daughter with bill payment and money transactions.

Using a Power of Attorney to help your son or daughter with making decisions and handling business, personal, and legal matters.

Using a Representative Payee to help with your son or daughter’s payments.

Establishing a legal trust to help with the transfer of money and legal matters.

Establishing a conservatorship to help manage your son or daughter’s assets.

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What About Guardianship?

Despite getting an early start on learning about money, many youth with disabilities (and many without!) reach the age of majority but are not yet ready to or capable of managing their own money wisely. Some parents may consider taking guardianship of their son or daughter as a way of protecting their child’s financial well-being.

Assuming guardianship of your son or daughter may be an option worth exploring. But it is also one of the most legally restrictive forms of support and can have negative effects on the individual. For instance, when a youth is denied the opportunity to make decisions about money or to participate in a shared decision-making process, he or she is also denied the opportunity to develop decision-making skills related to money. This can lead to a sense of helplessness and passive dependence. Therefore, it is important to realize that many young people with disabilities can be adequately supported in adult life without a guardian. This may involve managing their own finances with appropriate supports in place such as those discussed above.

To Learn More about the Pros and Cons of Guardianship

National Guardianship Association
http://www.guardianship.org/index.htm

An Overview of Guardianship
http://www.caregiverslibrary.org/caregivers-resources/grp-legal-matters/hsgrp-power-of-attorney-guardianship/an-overview-of-guardianship-article.aspx

Understanding Guardianship and the Alternatives for Decision Making Support
https://www.youtube.com/watch?v=0xXELClMHHE&feature=youtu.be

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In Summary

When a young adult with disabilities reaches the age of majority, he or she has the right to assume financial responsibility and manage his or her own affairs. The issue then becomes whether young adults with disabilities are prepared for such responsibility.

This tip sheet highlights the importance of early learning about money management, including providing opportunities for your young person to handle money in different situations and across time.  It’s also very important to consider what types of support need to be put in place to assist your son or daughter with financial matters when he or she reaches the age of majority.

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Helpful Resources

Practical Money Skills for Life.
To help consumers and students of all ages learn the essentials of personal finance, Visa partnered with leading consumer advocates, educators, and financial institutions to develop the Practical Money Skills program. The link below takes you to all the free materials available.
http://www.practicalmoneyskills.com/resources/free_materials/index.php

Tools for Teaching Financial Literacy Skills.
Here are several free tools for teaching your child essential money management skills and habits.
http://lifeafterieps.com/tools-for-teaching-financial-literacy-skills/

Teaching Money Counting Skills: Using Money Is an Important Functional Skill for Independent Living.
http://specialed.about.com/od/MathematicsforSpecialEducation/a/Teaching-Money-Counting-Skills.htm

Cents and Sensibility: A Guide to Money Management for People with Disabilities.
http://www.fliconline.org/documents/patffinancialeducationbooklet-final.pdf  This file will open in a PDF format. You'll need the PDF viewer to open it. Instructions are at the bottom of the page as to downloading the viewer. (5.3 MB)

National Resource Center for Supported Decision-Making |  The NRC-SDM provides leadership and expertise in supported decision-making and has developed evidence-based outcome measures; successfully advocated for changes in law, policy, and practice to increase self-determination; and shown that supported decision-making is a valid, less-restrictive alternative to guardianship.
http://supporteddecisionmaking.org/

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Materials Used in Developing This Tip Sheet

Millar, D. S. (2003). Age of majority, transfer of rights and guardianship: Considerations for families and educators. Education and Training in Developmental Disabilities, 38, 378-397.

Millar, D. S. (2013). Guardianship alternatives: Their use affirms self-determination of individuals with intellectual disabilities. Education and Training in Autism and Developmental Disabilities, 48, 291-305.

Millar, D. S. (2014). Addition to transition assessment resources: A template for determining the use of guardianship alternatives for students who have intellectual disability. Education and Training in Autism and Developmental Disabilities, 49, 171-188.

North Dakota Department of Human Services. (2008). Guardianship handbook: A guide for court-appointed guardians in North Dakota. Bismarck, ND: Author.
http://www.pathfinder-nd.org/pdf/guardianship-handbook-12-18-08.pdf  This file will open in a PDF format. You'll need the PDF viewer to open it. Instructions are at the bottom of the page as to downloading the viewer. (94 kb

Rhode Island Disability Law Center. (2008).  Guardianship and alternatives to guardianship. Providence, RI: Author. Online at: http://www.ridlc.org/publications/Guardianship_and_Alternatives_To_Guardianship_Booklet.pdf This file will open in a PDF format. You'll need the PDF viewer to open it. Instructions are at the bottom of the page as to downloading the viewer. (224 kb)

Virginia Intercommunity Transition Council. (n.d.). Supported decision making. Online at:
http://www.doe.virginia.gov/special_ed/transition_svcs/va_intercommunity_transition_council/fact_sheets/supported_decision_making.pdf This file will open in a PDF format. You'll need the PDF viewer to open it. Instructions are at the bottom of the page as to downloading the viewer. (224 kb)

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Other Tip Sheets in This Series

This tip sheet is part of a series written to support parents and youth with disabilities as youth approach the “age of majority.” The series includes:

These tip sheets are copyright free, so please do feel free to share them with others.

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Acknowledgements, with Many Thanks!

Collaborating partners | This tip sheet was developed in collaboration between the:

Thanks to reviewers | We extend our appreciation to the many stakeholders (e.g., parents, students, SEAs, LEAs) for their generous ideas, support, and time in the development of these tools.

Special thanks to Parent Center reviewers | Special thanks goes out to Barb Buswell, Bebe Bode, Laura Nata, and Dorie France for providing guidance throughout the project. Without their contributions, these fact sheets would not have been possible. Thank you.

Cooperative agreement references |  This document was developed by the:

  • National Post-School Outcomes Center, Eugene, Oregon (funded by Cooperative Agreement Number H326U090001) with the U.S. Department of Education, Office of Special Education and Rehabilitative Services;
  • National Secondary Transition Technical Assistance Center, Charlotte, NC (funded by Cooperative Agreement Number H326J11001) with the U.S. Department of Education; and
  • Center for Parent Information and Resources, Newark, NJ (funded by Cooperative Agreement Number H328R130014) with the U. S. Department of Education.

This document has NOT been reviewed and approved by the Office of Special Education Programs. Opinions expressed herein do not necessarily reflect the position or policy of the U.S. Department of Education nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Department of Education.

OSEP Project Officers | Carmen Sánchez and Dr. Selete Avoke

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