Helping the Next Generation

3 Things You Can Do As a Responsible and Loving Adult

Many parents ask me about what they can do to help their children achieve financial independence.  They may have different ideas in mind: a college fund? A financial gift at some important milestone? A car, perhaps?  All do-able, and all possible.  But I have also observed that sometimes the answer to this question is less complicated than you might think.    

Whether you have children or grandchildren, nieces or nephews, or friends’ children to think about and to love, there are a few helpful things that you can do as an adult to help the next generation.  The good news is, they don’t necessarily require a lot of money.  They simply require focus and commitment.

  1. Model good “financial hygiene.”  Anyone who has spent some time with kiddos knows that they can be uncanny mimics.  (This is true even as we get older and it becomes less obvious than them repeating our sentences.)  Humans are built to learn in this way, and financial behavior is no different.  Kids will pick up on what you do just as much (or more than) what you say.  This doesn’t mean you have to be perfect!  Rather, it is an excellent opportunity to think about financial habits you may have developed and whether they still serve you.  What message might you be sending as you spend, save, and talk about money?  If you’re not sure, ask the kids!  They just might tell you.  And that brings us to the next point…  
  2. Remove the taboo by talking about money.  To be a bit crude, I’m surprised by how many parents will talk to kids about poop, but not about debt!  In many households, money seems to be a taboo topic.  If nothing else, bringing the topic out in the open and exploring it together could be one of the best things you can do.  It makes it less scary and foreign for everyone and starts to build a healthy lifelong relationship with money.  I’m not saying that making money a natural part of the conversation is easy in our society, but it is absolutely possible and unbelievably helpful.  So… how? 
    • For young children, you might use identifying games and comparisons.  For example, I can remember learning things like how many coins it takes to make a dollar, how many dollars it takes to buy a toy, etc.
    • For older children, you might help them set goals for saving for a purchase they really want (my brother’s favorite was video games back in the day – this was a great motivator for him!).
    • For young adults, consider sharing what you know about setting a budget and paying bills.  Even if you consider it “basic,” that is probably what they need to know!  I still remember how important and adult I felt when my parents took me to the local bank to open up an account.  I remember learning what a check was and how money went in and out of the account.  It sounds simple but it was a big deal in my young adult life.  If you’re not comfortable teaching this, ask a banker or trusted financial advisor, but don’t let the conversation go unspoken.
  3. Consider learning together.  This really helps remove the taboo and opens the door for fun, yet safe, exploration.  Learning together can happen in short bursts or longer study.  A short burst example is: you could have a conversation about what a savings account is, then go online together and “shop” for the best interest rates.  Or you could look up a financial term and then try to explain it to each other (the best way to learn is to teach, they say!).  Next, you could find a financial book and read it together, like a book club.  Some authors even have specific questions and/or activities.  For more in-depth exploration with young adults, consider taking a finance course together – there are many choices online or through a local community college.  Some banks and credit unions also offer complimentary webinars on specific topics.  Pick a topic you’d like to learn more about.  You may be surprised by how much you both get out of it! 

And finally, consider that sometimes, “experience is the best teacher.”  This may be the hardest thing any adult goes through (whether they are “your” kids or not).  We don’t want to let our next generation fall, of course, but bruises can be powerful teachers.  So just keep that in mind.  In the end, you can’t do it for them.  But you can help to shine a light on the possibilities that await.