Broker Check

Practical ways to help our adult children financially

| August 05, 2016
Family Finances


As a parent, one of our strongest desires is to protect and help our children. This core parenting sentiment evolves as the children age, from basic safety hazards, to surviving the social awkwardness of the middle & high school, and lastly toward seeing them off to college or into their first adult employment opportunity.


One thing that stays constant is the challenge of “parenting”. Once children have grown up, those challenges shift to adult child / parent issues. This stage can be challenging, as parents must wrestle with where they must help and where they must draw the line to inspire healthy habits in their children. Here are some “Do’s and Don’ts” of how to parents can better negotiate these challenges that will both teach good habits and prevent complacency:


How to Help

  • Help them create a budget to live within their means—especially helpful once they graduate from school and start earning a paycheck. (Remember my last blog on “One Berry at a Time”)
  • Encourage them to sign up for a 401(k) through their job if offered, if not, talk about adding to an IRA. Take advantage of both time & opportunity to build that nest egg!
  • Help them understand how you have accumulated money, which included making difficult choices over the years (spending vs. saving). Financial decision making is rarely easy, but smart decisions early make all the difference in the world.
  • Tell stories of how you scrimped and saved in your early modest income years. You weren’t always working with Gillen Wealth Management! J Children often forget (or don’t know) parent hardships, and likely view your current financial status as something that you never had to fight to cultivate.
  • Pay for a select family vacation or event that will help create memories, but carefully manage expectations.
  • Contribute to a college account for a grandchild—be upfront with adult children how much you can add, keep accounts in your name, and never do so at the expense of your retirement!


How NOT to help:

  • Do not pay off your children’s credit card debts. Financial prudence and responsibility are learned—sometimes the hard way!
  • Do not bail your children out of financial trouble—especially if they are working. This moral hazard teaches very bad lessons and invariably leads to more bail out requests.
  • Helping them live a lifestyle they really can’t afford, such as a down payment on a home that is beyond their practical means.
  • Paying for things like cars or other depreciating asset, unless it is through the form of a loan. Only go the personal loan route if your child has a track record of success in such things.


We all have shining parenting moments along with the cringe worthy actions. While it is so hard to watch your child fail, letting them learn sound financial practices is how they become independent adults.


Opinions expressed are that of the author and are not endorsed by the named broker dealer or its affiliates.  All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.