Financial Planning for Adult Children: Assessing Your Ability to Help

Financial stability is crucial before helping adult children; educating them on financial responsibility is essential for their success.

### Parental Financial Support: Balancing Generosity and Self-Preservation
* 💸  A financial advisor discusses the **delicate balance** of providing support to adult children while safeguarding one's own **financial future**.
* 👴👵  Parents must ensure their own financial security before assisting adult children, as **14% of parents are currently moving back in with their kids**, potentially due to financial necessity rather than choice.
* 📊  The "financial order of operations" helps individuals assess their financial position and determine if they can **afford to help others**.
* 💰  Parents who are financially secure can provide both **financial and non-financial support** to their children, such as **teaching good money habits** and **matching their savings contributions**.
* 👶  Starting with age-appropriate lessons like "**give, save, spend**" for young children, then progressing to teaching teenagers about **saving and investing**, and finally providing adult education on **estate planning and insurance**.
* 📉  It's important to let children make mistakes and learn from them, as this builds **self-reliance and financial responsibility**.
* 👨‍👩‍👧‍👦  The advisor emphasizes the value of work experience for children, as it teaches **valuable skills and work ethic** that can benefit them throughout their lives.
* 🔍  By providing **support, education, and accountability**, parents can help their children develop financial independence and **avoid major financial mistakes** in the future.

[Music], so let's jump into these two major questions. Can I help now? Look in the Tweet example that we just showed. Obviously, they've got a financial planner. They've stress-tested their retirement plan. They're very comfortable. They're going to have plenty of resources. So, the answer is a solid yes. However, I will tell you, I have dealt with the other side of this equation where I can even remember a case where I had a windfall client. They had worked in education their whole life, but because where their family land was, a big windfall of money came their way, and it should have set them up forever. Yep, but I remember I had to do some tough love because the adult children, 'cause she had multiple children, were picking her apart. I mean, to the point of buying bedroom furniture for their houses, to the point of when they were trying to go on the next vacation, they were asking their mother for all these things. And when you think about, hey, and I know what these adult children were

thinking, Hey, Mom just came into all this money. She can, she can, she's set. She can help me out. But when you have three or four kids and every adult child is asking mom to do these different behaviors, you can quickly see that, Yes, Mom came into a windfall, but it is breaking the system. And I had to put a stop to it to kind of make sure that she didn't sink herself. So, Bo, we talk about this all the time. What is something you can do when you're figuring out, Can I help? Yeah, one of the things, you know, we always use this analogy, you know, whenever you get on an airplane, they always tell you, Hey, make sure you put on your oxygen mask before you help those around you, before you even help your children. Well, your finances are no different. Before you can start helping others, before you can start being generous towards their financial struggles, you have to make sure that you are on a firm foundation. And unfortunately, when we look just at the numbers broadly, we know that right now.

14% of parents are moving back in with their kids. Now, obviously, some of this may be by choice, and that's wonderful if you want it to be. We want a family unit. If you want to live together, if you want to move back in, that's a magnificent thing. What I'm worried though is that a number of these 14% are not by choice. It's by necessity. It's by appearance recognizing, Holy cow, I am no longer able to provide for my well-being, and rather than being able to continue to help my kids, I now have to depend on my kids to provide shelter or resources for me. That's not the place you want to be in. And if you can assess early on whether or not you can help, hopefully you can avoid being in that dire situation later on. So let's get into the nuts and bolts here. When you ask yourself, Can I help? don't go off just the emotional stuff. You've got to actually, let's put pen to paper, let's look at the financial order of

operations. Where are you at in this process? Are you ahead of the curve? Are you behind the curve? Are you right where you're supposed to be? Every one of those answers to those questions about your personal finances are going to help you figure out, Can I actually help, or is it to my detriment to actually make this decision? And if you are ahead, that's great. You should help. That's a wonderful thing. But if you are behind, you should be true to yourself, and you should recognize, Man, I might not be in the position to be able to provide the help that I want to be able to provide to my kids. But even if that's the case, even if I cannot be the financial resource that my kids need right now, there are a number, a plethora of nonfinancial ways that you can help your kids and that you can pour into their lives. Well, this is something we talk about a lot, how if you're talking about non-financial ways that you can help your adult children and look, it doesn't have to just be adult children.

if you a lot of our audience you're in your a lot of our audience is in their late 20s all the way up to the 40s so your kids are probably still in the house it's not too early to start this process you've got to teach your children to be good with money and one of the things we like to do is start you know thinking about how do you start those and model those behaviors well for your children Bo you do a great job um when you're teaching your children I think about the the the three-part system that that's very age appropriate which is the give save spend can you talk about what you do with your your girls and your son my kids are obviously young so I can't talk to them about Roth IRAs and Roth conversion strategies and safe withdrawal rates but I can talk to them about give save spend every time money comes into their possession I want them to understand okay there's a right thing to do with these dollars and there's a wrong thing first we give and

then we save, and then we spend what's left over. That's a very age-appropriate thing for my kids. But then, as your kids age, you want the educational content that you're providing them to also change. So, as they get into their teenage and young adult years, there are different topics you'll walk through them with. Yeah, and that's one of the things you've heard me share many times, but I think it's very well worth repeating. When your children get to working age, I'm talking about 15, 16 years of age, help them get their first job. And then, once they start having money coming in, talk to them about what are appropriate behaviors, where you need to be saving a portion of your income for the future. And better yet, why don't you take the role of what a lot of employers do? Why don't you prime the pump by actually doing dollar for dollar matches? I did this with my own daughter, and I've created a beast. I mean, she every time she now comes into windfall.

of money from work or other things she will immediately come to me and say, Hey Dad, is that deal where you do dollar for dollar matching still working? If so, I want to give you some money to put in the investment account. While she's still in college, I'm like, Oh yeah, let's do this, and I load her up because I really do think that behavior of understanding giving a little bit of today for that Great Big Beautiful Tomorrow is so valuable. I also really like do make your kids go to work, you know. I think about Bo, you worked in Food Service, you waited on tables. I worked in fast food and did the drive-thru. It is amazing how much of my adult life and the skills I developed working in fast food still have tremendous dividends when I'm dealing with clients, when I'm dealing with co-workers. So make sure that you are letting your children have some chances to learn how to work and build and understand the power of letting your money work, but also a good work ethic.

and then even as your kids age, and as they get into adulthood, there's even age-appropriate ways that you can do adult education when your kids begin to have kids of their own. Are you encouraging them to make sure they have estate documents in place? Do they have life insurance in place? Are they saving appropriately? As you age and you prioritize your financial life, hopefully so too will your kids begin to prioritize their financial life. And even though you want to be able to provide that education, you want to be able to speak to that, you want to be able to lean into that for your kids, you want to give them room to fail. You don't want to do everything for them, you want to step back and let them learn lessons on their own, but you can be that sounding board there to say, Hey, I noticed that you did this. I noticed that you made this choice. Did you think about it this way, or had you approached it this way, might that have been valuable? If they can learn those lessons early on, if they can fail

small early in their life. Hopefully, that'll prevent them from failing big later on in their life. Well, this accountability creates self-reliance, but it also creates them to kind of stand on their own to legs, have skin in the game, create some scarcity in their life, and I think this will serve them well.

Boomers, Ask These Questions BEFORE Helping Your Kids Financially

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Managing Windfall Money and Financial Planning

Having a windfall of money can lead to challenges, especially when family members start relying on it.

It's important to establish a firm financial foundation before helping others.

Just like on an airplane, you need to secure your own finances before assisting others.

The Trend of Parents Moving in with Their Kids

A significant 14% of parents are moving in with their children, potentially due to financial necessity.

It's important for parents to assess their own financial situation before making this decision, considering whether they can genuinely provide assistance.

Even if not able to help financially, there are numerous non-financial ways for parents to support their kids during this living arrangement.

Teaching Children Financial Responsibility

Teaching children about money management can start with the simple "give, save, spend" system.

As kids get older, the financial education provided should evolve to more complex topics.

It's beneficial to help teenagers get their first job and encourage them to save a portion of their income, even considering dollar for dollar matches to instill good saving habits.

Teaching Kids Financial Responsibility and Work Ethic

Encouraging kids to save and invest from a young age can instill valuable financial behavior for the future.

Providing opportunities for children to work and develop a strong work ethic can have long-term benefits in their adult lives.

As children grow into adulthood, it's important to educate them about estate planning, saving, and financial prioritization, while also allowing them the space to make and learn from their own mistakes.

Early accountability helps prevent later failures and promotes self-reliance.

It encourages individuals to take ownership, create resilience, and learn the value of scarcity in their lives, ultimately leading to personal growth.