Wealth Column: Financially raising adult children
Communication and expectations are two keys as children become adults and grandchildren arrive on the scene and showing your children how you budget, plan for the future and balance spending and revenue could help give them a solid start and an early effort in saving for the future, financial advisers Bruce Helmer and Peg Webb, Wealth Enhancement Group, note.
Recently, we discussed the struggles of the sandwich generation, folks who are taking care of their aging parents while still raising children. This time, we’d like to focus on adult children who are leaving the nest or otherwise need your help getting launched.
Supporting your children financially is about more than giving them money. They will probably need some of that, but they also need your wisdom and encouragement.
Discuss their financial plan
Now, your kids are probably really smart and so maybe they regularly read our column and have their retirement mapped out. In case they haven’t, schedule some time to talk through their financial plan.
Many older children take it for granted that their parents have always been financially comfortable, and expect to have the same latitude when they get their first job. They aren’t privy to the planning and choices you have to make with your dollars.
Run them through your budget. Show them how and where you save, what your payments are, how you account for incidentals. If you have a 401(k), IRA or health savings account, show them how those work. If you don’t have a budget, show them how you make saving a priority relative to your expenditures.
Set expectations around your level of support
You probably want to support your kids any way you can. But, as parents love to say, money doesn’t grow on trees. It is also important to foster independence by allowing your children to make financial mistakes.
Strategize when it comes to grandkids
In our experience, a lot of the above goes out the window when grandkids arrive on the scene. Babies are adorable, and they can wrap you around their fingers pretty quickly.
You might be tempted to indulge and spoil your first grandchild. But keep in mind that, especially if you have a large family, many more may be on the horizon. You don’t want to spoil one grandchild to the neglect of the rest of them because you ran out of money.
Consider establishing trusts and other investment vehicles, such as college savings accounts, that allow you the flexibility to support your grandkids long term. Any parent will tell you the greatest gift a grandparent can give is your time. An offer to babysit is as good as gold.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on News Radio 830 WCCO on Sunday mornings. Email Bruce and Peg at email@example.com. Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment adviser. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL.