Now, your children 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. Bruce Helmer and Peg Webb
Discuss their financial plan
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 401k, IRA or HSA, show them how those work. If you don’t have a budget, show them how you make saving a priority relative to your expenditures. Strategize when it comes to grandkids
You probably want to support your children 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. Whatever balance you choose to strike, whether it’s a limit on how much college tuition you will pay or an age after which you won’t provide regular financial support, communicate that clearly. Many children are surprised to learn their parents don’t intend to act as a bank. Having a conversation now will help them be intentional about their financial planning. In our experience, a lot of the above goes out the window when grandchildren arrive on the scene. Babies are adorable, and they can wrap you around their finger pretty quickly.
Set expectations around your level of support If they are embarking on their career, schedule an appointment for them to meet with your adviser. They might not have a complicated financial situation, but the money they invest now is especially valuable due to compounding interest. Establishing a savings plan now will get them accustomed to making it a priority.
Consider establishing trusts and other investment vehicles, such as college savings accounts, that allow you the flexibility to support your grandchildren 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. 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.
Source www.twincities.com Set limits, communicate those limits, and get your kids in the habit of establishing limits for themselves. This will relieve stress for you and help them become financially independent.
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