Money Advice

How to help your adult kids without giving money

Posted by The Simply Money Team on May 9, 2018 2:23:26 PM

“You give a poor man a fish and you feed him for a day. You teach him to fish and you give him an occupation that will feed him for a lifetime.”

You’ve given everything you can to your adult children over their lifetime, and you’re likely always looking for a way to help them financially. Maybe you may want to help them buy a house or pay down their student loans. But this constant generosity (and let’s be real, the occasional “bail out”) could stunt their financial growth and success over the long-term. 

By teaching your children the financial necessities, they can gain skills to help them navigate their own financial journey. It may be challenging to close your pocketbook, but teaching them how to be financially successful could be so much more beneficial for them in the long run. 

So, here are a few Simply Money Advisors suggestions for how you can help them financially without giving them money:

Share your financial knowledge

Financial literacy is not something that is often taught in schools. Many millennials (those who are in their early 20s to mid-30s) struggle with basic concepts of personal finances that can help them excel. Even if your kids won’t admit it, they may need a little help understanding their own personal finances. 

In order to keep them from feeling attacked, try to ease into the conversation. Let’s say you recently made adjustments to the investment mix in your Roth IRA. After your share this information with them you may want to ask, “Have you ever considered opening a Roth IRA?” 

This is the perfect opportunity to tell them about the tax benefits of opening this account. It will help educate them without making them feel bad for their lack of knowledge.

Offer financial tools and resources  

Personal finance can be confusing. Thankfully, technology has made it a little simpler for the average consumer. 

Your adult children may not be aware of all the tools and apps they have at their fingertips to help them achieve financial success. Everything from budget templates to investment apps could help them see the bigger financial picture. 

Share the financial tools you use with your children. If you don’t currently have any you would suggest, do some research. Have your kids try them out and see what they like.

Sit down and do it together. This will help improve your relationship and increase their financial literacy in the process. 

Share your financial mishaps 

If you want to help your adult children avoid future financial mistakes, talk to them about yours. The more open you are about your past money mistakes, the more comfortable your children will feel talking to you about finances.

If they feel as though you have always had it figured out, then it may be harder for them to ask you questions.

This could also help you strengthen your bond with your children. They will feel closer to you because of your transparency; maybe even seek your advice when faced with a financial decision. 

Introduce them to financial experts  

Finding a financial planner or tax professional you trust can be challenging. It takes time to find one that can help you with your financial needs. If you work with a trusted financial planner or tax professional, take the first step and introduce your children to them. This may be a great springboard for further conversations and discovery.

Partnering with a financial planner can help you develop a financial plan to reach your financial goals and objectives (we recommend working with a CERTIFIED FINANCIAL PLANNER™ or a Charted Financial Consultant®).

Express the power of saving

If your adult children always seem pressed for cash, share with them the importance of saving. It may seem counter-intuitive, but show them every little bit counts.

Even if they can start with $25 a month, they will find their account increasing over time. This could inspire them to save more and seek other options to do so.

Simply Money’s 50/30/20 Rule is also a handy way to think about money: 50% of your take-home pay should go to “needs;” 30% should go to “wants;” 20% should be saved.

The Simply Money Point 

Handing your adult children cash isn’t the only way you can help them financially. Teach them the skills they need that can last a lifetime and build financial success.

Topics: Budgeting, Retirement

Disclaimer

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Simply Money Advisors), or any non-investment related content, made reference to directly or indirectly will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, this content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained here serves as the receipt of, or as a substitute for, personalized investment advice from Simply Money Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Simply Money Advisors is neither a law firm, a certified public accounting firm, nor a tax advisory firm and no portion of the blog content should be construed as legal, accounting, or tax advice. Please consult your own attorney, accountant, and tax advisor for legal, accounting, and tax advice. A copy of the Simply Money Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Advisory services offered through Simply Money Advisors, a SEC registered investment adviser. Insurance services are offered through Simply Money Insurance Agency, a separate entity from Simply Money Advisors. Simply Money™ and the spiral symbol are trademarks of Simply Money IP Holdings, LLC.

Simply Money Advisors

Your trusted financial planning partner and retirement specialist.

Subscribe to Blog Updates

Recent Posts