Tips for Talking to Your Adult Children about Money
It’s great to teach financial literacy and financial responsibility to your children from a young age.
With a good financial foundation, your children will be making smart decisions with their money by time they are teenagers. But don’t assume that your guidance will no longer be needed once they reach adulthood. There is a fine line between allowing your children independence in managing their finances and providing helpful parental guidance. If you have adult children and are not sure how to approach talking to them about finances, check out these tips!
1. Keep It Positive
Talking about finances can be stressful, especially for young adults who are just starting out in their careers and may already find themselves in debt thanks to hefty student loans. It is important to try to always keep discussions about money positive and free from judgment or criticism. Consider starting the discussion by saying something like, “I’m impressed with how you’ve been paying your student loans on time” and then get into more serious discussions with questions like, “Have you thought about how you’ll save for retirement?”
Talk about what their goals are and what kind of life they envision for themselves. Be prepared for your adult child to possibly feel anxious or frustrated talking about finances, so try to keep the tone constructive and encouraging throughout the discussion.
2. Know You Won’t Always Agree
Be prepared to not see eye-to-eye on money-related discussions. You are at different stages of life, and you carry a certain amount of experience and wisdom that your children may not be able to appreciate. That’s only natural, so try not to get frustrated. Offer your advice and guidance, and try sharing some of your own financial mishaps to help them relate and understand that you are not perfect either. Hopefully, they’ll take your advice to heart, but be prepared for them to have to learn some things the hard way on their own.
3. Establish Boomerang Rules
Many adult children are opting to move back home after college to save money – but that doesn’t mean you should be sacrificing your financial well-being to help with theirs! If you have children moving back home, make sure to have a clear discussion about rules and expectations when it comes to finances. Will you expect them to contribute to rent or mortgage? Will you be sharing a car? Will you expect them to contribute to groceries? Will you set a time limit on how long they can stay with you? The conditions will be different for every family, but to avoid arguments and tension in the house, be sure to have a discussion about finances and come to an agreement you are all comfortable with.
4. The Bank of Mom and Dad
It is common for parents to still offer some financial assistance to their adult children as they set out on new careers and a new stage of life – although the extent of this will vary greatly from family to family. It is important to assess your own financial situation and the extent to which you are comfortable helping out. Consider setting limitations.
Be sure to have a discussion about what you will continue to help with (i.e. Can they stay on the family phone plan? Will you keep them on your insurance policy? Will you help during emergencies like car repairs or a vet bill? And for how long? Try not to use demanding and confrontational words. Don’t be afraid to say “No.” Explain why you are drawing the line where you are and that you’re prepared to help until they get on their feet.
Talking about finances is never easy, especially with young adults who are just coming into newfound independence. The above tips will help you guide them to financial stability without overstepping your boundaries. Whatever you do, be patient and encouraging! Teach them that talking about financial goals doesn’t have to be stressful or scary.
What’s it been like talking about finances with your adult children? Share your experiences below!