Talking to your adult children about money can be one of the most important and transformative conversations you’ll ever have.
As a money educator, I’ve seen firsthand how these discussions can shape financial futures, strengthen family bonds, and prevent misunderstandings.
Drawing from my book, The Five Conversations About Money to Radically Change Your Life, let’s explore how to navigate these essential dialogues.
Start with Your Story
Begin by sharing your own financial journey. Discuss the lessons you’ve learned, the mistakes you’ve made, and the victories you’ve achieved. This not only humanises the conversation but also provides a relatable context for your children. For instance, you might say, “When I was your age, I didn’t save enough for emergencies, and it really put me in a tough spot when unexpected expenses came up.”
Establish Open Communication
Encourage an open and judgement-free dialogue. Make it clear that your goal is to support and guide, not to criticise. Ask open-ended questions like, “How do you feel about your current financial situation?” or “What are your financial goals for the next few years?” This approach fosters trust and allows your children to express their thoughts and concerns freely.
Discuss Financial Independence
Emphasise the importance of financial independence and responsibility. This can include budgeting, saving, investing, and understanding debt. Use real-life examples to illustrate your points. For example, explain how creating a budget helped you save for a down payment on your first home, or how avoiding credit card debt can free up money for other goals.
Introduce the Concept of Wealth Building
Wealth building isn’t just for the rich; it’s for anyone who wants to secure their financial future. Discuss the basics of investing, superannuation, and the power of compound interest. You might say, “If you start investing $200 a month now, you could have a significant nest egg by the time you’re ready to retire.”
Address the Hard Topics
Don’t shy away from difficult subjects like inheritance, retirement planning, or even financial support. It’s crucial to set clear expectations and boundaries. For instance, if you plan to leave an inheritance, explain how it will be managed and what your wishes are. If your children are struggling financially, discuss ways you can help without enabling poor financial habits.
Help the next generation out by Financially Supporting Your Grandkids: A Grandparent’s Guide. And put your finances in order with our guide to Planning for Retirement: How to Know When You Can Afford It.
