Your children are now grown and on their own, but perhaps they keep coming to you for some supplemental cash. Maybe you have sent them to college with a “budget” and they seem incapable of tracking their own spending. Maybe you wonder if they are participating in a 401K or saving that bonus they just received as you hope. We all hope that our money values have been passed down, but it is difficult sometimes to discuss personal finances with adult children. One of the hardest parts about having this discussion is trying to decide how and when to have it, but without you taking the initiative this conversation will never take place. Here are a few conversation starters and ideas we have seen work successfully.
Try starting the conversation by sharing your own mishaps and mistakes along the way. Most parents spend their life shielding their children from seeing any financial strife if possible. This is only natural, but many young adults then assume their parents never struggled with savings, a budget or credit card debt. It’s a good time to start sharing your own lessons-learned to establish an easier conversation.
A conversation on the topic of saving is another great place to start because everyone knows how important saving is. Try suggesting that a great way to save is to have their employer or bank automatically deposit a small amount of money from every paycheck directly into savings. With this approach they will get used to living on slightly smaller earnings from the start and they will also be regularly building savings for an emergency fund or future needs. Often, good savings habits solve any issues of over-spending because it is easier to think about what remains in the paycheck is all that is available for spending.
Many young adults have expenses such as rent, car payments and maybe college debt that eat up most of the money they are earning each month making it hard to manage discretionary spending. It is easy to suggest they should create a budget, but your young adult probably won’t keep a list of expenses or follow a spreadsheet budget template. To help them gain better control and understand their need for a budget, why not suggest a few online tools and apps. Send them to Mint.com or Nerdwallet to see what they can realistically afford on their income. These websites also have apps they can take on the run to monitor spending and check balances.
Managing savings and spending is an important life lesson and you want to ensure your child isn’t living beyond their means. By offering guidance and checking in you’ll know you’ve delivered the advice that can help them in the long run. We know this can be difficult and sometimes we will start these discussions for our clients. We all know it’s easier to hear advice from someone other than our parents, but first you should try using some of our conversation starters and always remember there are a number of useful tools out there to get you through the process.
