Imparting good financial habits to young adults
On Labor Day we sent my son Reid back to the University of Rhode Island for his junior year. Finally, there was hope for some kind of normal college year for him after spending a year at home taking online classes. Living in an off-campus apartment for the first time, he is learning about paying rent and utilities, and buying groceries on his own. It’ll be a good experience for him.
So, how does one prepare a young adult to manage their finances? It’s not easy.
We don’t want them to fail and make the same mistakes we made at their age. So, we often give them advice they don’t want. And, when your dad is a financial planner like me, there is an even greater chance that you’ll get too much information. It’s been a learning curve for me learning how to impart good financial tips to my young adult children.
One of the best pieces of financial advice I ever gave to my son was when he wanted to buy a new electronic game called Disney Infinity. He had seen the ads and had fallen in love with the game. But it was going to be expensive, using up all of his Christmas money and cash. I asked him if he had researched it compared to other games and if he felt like it was going to be worth using up all of his cash. Well, after a week or two of playing it, he realized it was going to require more purchases. This game also wasn’t easily set up for multiplayers and he really liked playing online games with his friends.
The bottom line is that he regretted the purchase. Since then, I’ve heard him tell his friends about how he learned from this financial experience to make better choices.
Here are some tips for imparting financial advice to your young adult:
Reset your approach. If your young adult is 20 or so you probably know by now that they want to be treated as an adult, not a child. That means changing from telling them what to do, to talking to them as a peer. Better yet, ask them questions. Then, if appropriate, share your financial experiences when you were their age (e.g., the time you racked up a lot of credit card debt) and how you handled it.
Make positive. Many young adults are learning and finding their way. They don’t know all the answers but don’t want to be criticized for the bad ones that they have made. Try to reinforce their good decisions and offer a one or two that worked out well for you.
Short and to the point. As I mentioned above, this is hard for me to do. With all of my experience in the financial services industry, I want to tell my adult children all of my best advice, but that’s not a good idea. Pick your situations carefully and capitalize on situations where you can make a good point. For example, I could say “I’m glad to hear that you started /
want to start saving. All of my most financially secure friends started saving early and made sure that they always spent less than they earned.”
Talking to your young adult children about money not easy for most people. But with a changed approach and quick points, you may be able to help them make some important financial decisions that will last a lifetime.
If you have additional questions about how to talk to your young adult children about making good financial decisions, give us a call, we’re here to help. You can schedule a quick call with me by clicking HERE.
Photo: My son Reid and I striper fishing in July 2021 with his cousins in Wells, Maine.
Lyman H. Jackson Lyman@PlanWithFPS.com
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