I began teaching my now 31 year old daughter about money and saving at a young age. She was very responsible with her money as a teen. She had a checking account, savings account, and credit card. When it came time to go to college I covered her tuition, room, board and gave her a small allowance. She also worked part time during college.
The college funding was not without strings. First she had to borrow part of the tuition and I agreed to pay off the loans upon graduation. If she did not graduate, she would have to repay the loans on her own. Second I required her to develop and review with me at the beginning of each semester a budget projecting her expenses, including tuition, room, and board. Once I approved the budget she received a check for the amount I was funding. At the end of the semester she had to show me her actual spending versus budget, plus a new budget for the next semester. The agreement was if she came up short during a semester she was on her own to figure out how to get by. If she had a surplus it was hers to keep. Every semester she had a surplus. Needless to say she graduated and I paid off the loans.
She decided to go to graduate school and I told her she was on her own. The only assistance I provided was to let her live at home rent free while she earned her masters degree. She stayed at home, worked two jobs, took out loans and did her coursework through a state university distance learning program. Upon graduating she went to work full time in her chosen field and kept one of her part time jobs so she could pay off her loans early.
When she completed her loan repayment my wife and I decided to start giving her the annually the $14K each ($28K total) the IRS allows. The strings applied are she fully funds a Roth IRA and applies the rest to her $401K which she is able to max out. She saves the balance. Since she is our only heir, this allows us to effectively move funds out of our estate tax free. If she ever shows signs of financial irresponsibility we will stop the payments.
She has a small inheritance from her grandmother which is held in trust. I am the trustee. When the trust was established three years ago I began using it to teach her about investing. I set up the trust account at Vanguard and explained the advantages of low cost mutual fund investing and managing risk. I let her pick the funds. Her funds have performed well, but of course so has the market. I intend to liquidate the trust and pass the funds to her next year.
My daughter works in a low paying profession and loves her work. She lives much more frugal lifestyle than I did at her age and she seems to be happy with her life. If she continues to live below her means, and invests our annual gifts plus her own savings responsibly, she should have a comfortable retirement in 35-40 years.
As to her inheritance from us we have told her she will likely receive some of our estate but we have suggested she not plan on an inheritance because we will be spending some of our assets in retirement and we have included charitable endowments in our will.
All of our financial help has purposefully had strings attached to teach our daughter how to manage money and address her long term needs. We feel blessed she is a responsible adult and seems to manage her resources well.