Conversations that bring money into play are notoriously difficult to have. As parents, we want to help and support our children in every way we can – even if doing so is at our own financial expense. When it comes to setting your young adult kids financially free: When is it time to (forcibly) nudge them to spread their wings? Here are three questions to ask yourself and reflect on when determining if it’s time to cut the purse strings.
If your kids lack a respectable grasp on how to manage their own finances because you have always done so for them and have always been a financial crutch for them to lean on, it may be time for you to push them towards financial independence. Encourage your young adults to track where their money is going each month – how much are they spending on groceries and social outings; how much are they saving from every paycheck? If your kids have steady jobs and are fully capable of paying their own bills and individual expenses with proper budgeting, it’s time to cut them loose and urge them to assume financial responsibility of their own lives.
Remember that every family is different. If you can afford to help your kids without compromising your own financial stability and goals, if it makes you happy to do so, and if your kids aren’t dependent on you to their own detriment, then there is no reason to not share your financial resources as a parent. One suggestion if you find yourself in this privileged scenario is to help your children open Roth IRAs and gift them the money for their futures. In doing so, you can teach them the power of saving for the long-term. Additionally, if your kids will be forced to assume high-interest rate debt without your financial support, then consider giving them a loan and allowing them to pay back the amount over time on a schedule you both feel confident in.
All in all, life lessons through money are perhaps some of the best lessons we can bestow upon our children. When making important financial decisions, take the time to involve your kids in the process at a young age. Talk to them about how you save for their educations, how you monitor your monthly expenses and pay your bills on time, and how you make decisions to cut discretionary expenses and pass on that Porsche you’ve always wanted to put extra savings into your retirement account. Although they may not see the bright side of financial savvy and independence now, they will be thankful and proud when they feel that first sense of financial confidence and stability further down the road.
Questions and/or interested in how this applies to your financial life?
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