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How about making this the year you discuss money and good financial habits with your adult children? We all hope that our financial values have been passed down, but it is difficult sometimes to discuss personal finances with adult children. One of the hardest steps, though, is often just starting the discussion. If you haven’t given this much thought, try asking yourself: Did you send your children to college without teaching them about a budget or how to track their spending? If they’re young professionals, are they participating in a 401k plan or saving that bonus? Have they started a family, been progressing professionally, but not making their savings a priority? Many adults actually would welcome advice from their parents, but aren’t sure themselves how to broach the subject. Here are some tips to help you get started:
1. Share your own mistakes
You might have solid personal financial habits now, but you must’ve learned some lessons throughout your life. That’s why you could start a conversation by sharing your own mishaps and mistakes. Most parents spend their life shielding their children from seeing any financial strife, if possible. This is only natural, but many adult children then assume their parents never struggled with savings, creating a budget or credit card debt. Sharing your own lessons-learned can help launch a conversation about personal finances.
2. Discuss the importance of saving
A conversation on saving is another great place to start. Everyone knows the value of building emergency savings and long-term investments. Even if your children are far along in their careers, if they have had problems regularly saving, you can suggest that a great way to start is to have their employer or bank automatically deposit money from every paycheck directly into savings. With this approach, they will get used to living on slightly smaller earnings from the start. They will also build savings for an emergency fund or future needs. Also, often smart savings habits solve issues of over-spending. It makes it easy to think about what remains in the paycheck and what is available for spending.
Related: People Are Constantly Scared of Their Financial Future
3. Suggest online tools or mobile applications
Many young adults have expenses such as rent, car payments or start-up debt that eats up much of the money they earn each month. This makes it hard to manage discretionary spending. It is easy to suggest they should create a budget, but very few people can keep a list of expenses or follow a spreadsheet budget template. To help them gain control and understand their spending, get up to date on the latest online and phone apps that help. Mint or NerdWallet are two popular ones that can help your children see what they can realistically afford on their income. These both have websites and apps they can take on the run to monitor spending and check balances.
Managing savings and spending is an important life lesson that can change from piggy banks to adulthood. By offering guidance and checking in, you’ll know you’ve delivered the advice that can help your children throughout adulthood. We know this can be difficult and sometimes we will help start these discussions for our clients. We all know it’s easier to hear advice from someone other than our parents, but first you might try using some of our conversation starters. Also, remember there are a number of useful tools out there to get you through the process. If you’d like even more tips on how to start these conversations, contact us today.