Launching Financial Grownups

Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart

Bobbi Rebell

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119850076
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

Learn how to give the young adults in your life the knowledge, confidence, and motivation to make adult money decisions, and create their own strong financial foundation and independence, so you can all live richer lives.

In Launching Financial Grownups, popular personal finance expert and Certified Financial Planner Bobbi Rebell gets candid about the very real-life challenges of getting young adults to choose to be financial grownups and develop their own financial foundation and security. She shares her own personal setbacks and solutions (both from her own past, and as a parent), and walks readers through the ups and downs of financial adulting milestones. Rebell has put together a practical and specific adulting launch plan for parents of young adults along with tips on how to open money discussions, the questions to ask your children, the most effective listening strategies, when to step in to stop them from making mistakes, and when to let them learn from their mistakes.

Launching Financial Grownups provides the tools to help your teen or young adults navigate the challenges of adulthood including debt, credit cards, peer pressure that leads to bad money decisions, negotiations, how to manage their own household, different investing opportunities, insurance needs, charitable giving, the legal documents they need to have in place in case of an emergency, what they need to know about your finances and even starting to think about their retirement planning. All this while also addressing recent demographic trends driven by the pandemic including young adults moving back into their childhood homes, and becoming financially dependent, after having been independent.

Launching Financial Grownups offers:

• Solutions for parents who want to avoid 'cutting off' their kids at a seemingly arbitrary age or life milestone and are looking for more supportive solutions to get their young adults to be well adjusted financial grownups.
• Strategies for parents to protect their own financial well-being and retirement resources.
• Advice from top parenting and money experts including "How to Raise an Adult" author Julie Lythcott-Haims, "The Price You Pay for College" author Ron Lieber, "Grown and Flown" co-author Mary Dell Harrington, Tori Dunlap of "Her First 100K", "How to be a Happier Parent" author KJ Dell'Antonia, Tonya Rapley of My Fab Finance and Jean Chatzky, author and CEO of HerMoney Media

Essential for the parents, grandparents, aunts, uncles, friends and everyone who is vested in the financial success and independence of young adults, Launching Financial Grownups is a must-have financial resource for long-overdue and timeless advice in an engaging and supportive package.

SECTION 1
Prerequisites

CHAPTER 1
Orientation

We want to raise independent human beings, but we do not want them to make mistakes.

—KJ Dell'Antonia, Author, How to Be a Happier Parent

Welcome to orientation, my friends! If you are reading this, we have a lot in common. We love our kids to death but fear we are totally blowing it when it comes to setting them up for financial independence from us.

In some cases, that fear is spot on. Many of us, myself included, are at a loss. That's what compelled me to write this book. I wanted to figure out why so many young adults are so financially tied to their parents these days – and why so many of our children don't seem to be as bothered as we, their parents, are by the situation.

Let me assure you that if you are investing your time in reading this, you are on the right track. Getting yourself informed and ready to take on this challenge is the hardest part. If you are confused by why this is so much harder for us than we think it was for our parents, join the club.

The good news is I have found and will share some answers to those questions. Some of the reasons are of our own doing. We think we just want to put up guardrails for our kids to protect them. We cringe when we are called out as “helicopter parents.” But the truth is, many of us have gone past that moniker into what is being called “concierge parenting.” The term, by the way, has been credited to Julia Townsend, the principal of St. Catherine's School in Waverley, Australia.¹ For our purposes, think of it as the more financial- and lifestyle-driven version of over supportive and overly involved parenting than helicopter parenting. We are at the concierge desk ready to solve problems, which often involves throwing money at the issue. More on that later.

Many of the reasons we as parents continue to be so heavily involved in our children's lives as they move into their mid-twenties have to do with huge cultural changes. Something as simple as Obamacare, which allowed kids to be on their parents' health insurance until age 26, created a new benchmark for perceived adulthood. Kids' phone bills often start coming in middle school, and many parents, myself included, don't think to turn them off as the kids move through the different stages of becoming an adult. Bills are on autopay, and we just keep paying.

Gen X parents also often have more in common with our kids. Many of us get along with our adult children better than previous generations. Thanks to technology, we have more interaction with them, are more accessible when they need us, and can be more involved in their lives. Modern cultural values and priorities have brought us closer in so many wonderful ways, as parents today are intentionally more active in their kids' lives.

All this makes the idea of pulling away from something that has become so much of our identity painful and uncomfortable for many of us. We like our kids. Equally important, our kids often like us and enjoy being around on a more regular basis. They aren't as eager to cut ties as soon as they reach each adulting milestone, like high school or college graduation. In some ways, we are heading into a multigenerational society where family members of various generations live and spend time together in a more fluid fashion. There is so much good coming from this, but it also complicates how we transition the next generation into adulthood.

I have interviewed many of the top parenting experts, financial therapists, and money experts in the world and am so excited to share their incredible observations on the trends that have been shaping parent-child financial relationships. The advice they share on how we can best navigate the changing landscape will prove invaluable to all of us as we go through this journey. However, we must also do the work and make some tough decisions. It is essential that we come to terms with the fact that becoming a financial grownup ourselves is no longer enough. We as parents and grandparents must bring the next generations with us. But the thinking on exactly how to do so has had a massive shift for a number of reasons that we will get into soon.

It is becoming more apparent that changing cultural expectations have impacted our approach as to how our kids will separate from us economically and why that has become so complicated. The COVID-19 crisis has added a new wrinkle to the trend but has also opened up new lines of communication about finances that are proving very helpful. In previous generations, kids were expected to function as adults by their late teenage years. But our current parental expectations and realities leave many bewildered. Several families I have spoken to for this book have told me, often in confidence, that their 20-something and sometimes 30-something offspring are still very much economically dependent on them. The parents are exhausted and distressed. They worry how their kids will fare if something were to happen to them. They wonder if the kids will be able to step up in a family emergency. Parents are deeply concerned about their kids but also are becoming truly scared for their own financial futures.

The COVID-19 Boomerang

The COVID-19 pandemic has further amplified this issue for many families. Adult children moved back home during what was also an economic crisis. In some cases, they were being forced out of prolonged adolescence because their parents and/or grandparents need them to step up and care for them medically or financially – in some cases both. How prepared the younger generation was for this varied, and they often wished their parents had prepared them better for what was a shock to the system. They were forced to grow up and be financially responsible for someone other than themselves – when some had not even been fully financially responsible for themselves yet.

Some families experienced the opposite. Young adults moved home and into their childhood bedrooms and the family slid into old habits, including financial dependence. Meals were there for them, laundry was done, and life was good. Childhood perks are so much more appreciated as an adult! But after the initial adjustment period, an evolution of family roles began to happen for many families living in newly formed multigenerational living situations.

Many parents have told me adult offspring moving home was the silver lining to come out of COVID-19. Getting to know their kids as adults was wonderful, and they were happy to (temporarily) revisit their old family routines – only it was better in some ways. For the first time, they weren't competing with their kids' social plans to get them to sit down for dinner. They weren't rushing off to different events and activities. There was time. Lots of time.

What was most fascinating were the stories I heard about how the unexpected move home allowed parents insights into how well-prepared kids were to be financial grownups. It opened up opportunities to have conversations about economic realities that were not part of the parent–child relationship before, in part because everyone – parents and kids – had been totally overscheduled and overworked. Kids were in the room while their parents had open and honest discussions about financial challenges, which helped them better appreciate their parents' experiences. Likewise, parents got a better sense of how well their kids had been managing real-world money choices.

Remember, this was not the case where all the young adults were moving home for economic reasons, although that was often a big factor through no fault of their own. It wasn't about an adulting failure – financial or otherwise. They were moving home for both their and their parents' health and safety. Many families were able to leverage this season of their lives into an opportunity to build stronger financial foundations as a family. Total costs often came down because everyone was home so much. It opened up communication lines in ways that could not have come about through the normal course of events in “the before times,” as we have started to call the pre-COVID period. It was a unique, unplanned experience that often presented exceptional challenges but also unexpected relationship and financial benefits.

Stepping Up as Stakeholders

As the grownup, you are ultimate stakeholder in your kids' success behind only the child themselves. In the Introduction, I shared the story that inspired the book: trying to get my kids to open up a Roth IRA before the deadline, only to be met with indifference and apathy. We often assume that kids are motivated and interested in having more money. But in many cases, especially if they have not had to worry about money, there is little incentive to take action. All their bills are paid. In fact, the bills are often never even seen. They take money for granted because they don't have skin in the game and have not been asked to contribute. The money is just there for them.

I've done dozens of interviews for this book precisely because even though I am a CFP^® professional, I've struggled so much with this issue. My own kids have shown little to no interest in money at times. They have always had what they needed, and until recently my husband and I have kept them largely in the dark about our specific financial concerns. We wanted to protect them. We wanted to protect our privacy. We wanted them to feel secure. We never wanted them to know when we felt financially insecure. And frankly, sometimes we paid because we wanted those things more than they did.

A successful money manager who was a guest on my podcast confessed that he bought his kids cars as soon as they were old enough to drive even though they had not earned them. Frankly, he wasn't confident they would even take great care of them. He and his wife simply didn't want to be driving the kids around anymore. He absolutely thought the kids should have earned the money to pay for at least part of the cars, and he wanted them to pay for things like gas and insurance. At the end of the day, though, he didn't have a way to really enforce that because the kids knew the dad wanted them to have the transportation.

He's not alone. Many of us have used our financial resources to push our kids to do things that we believe will benefit them or to serve our own sense of what they “should” be doing. I know we are not the first parents to take a giant gulp and enroll our kids in lessons they want no part of.

I'm still not all that thankful my parents made me take piano lessons. They insisted, I resisted, and I still think it was a waste of money. My mom clearly felt that piano lessons were worth whatever they cost at the time.

Still, I find myself repeating the same parental behavior. If I had asked my son to earn the money to pay for his drum lessons so he would appreciate them more because he had skin ...

Table of contents

• Cover
• Table of Contents
• Title Pafe
• Copyright
• Dedication
• Foreword
• Preface
• Introduction
• SECTION 1: Prerequisites
• SECTION 2: Core Curriculum
• SECTION 3: Graduate Studies
• SECTION 4: Electives
• SECTION 4: Exmissions
• Epilogue: My Advice for Financial Grownups By Ashley Jessica Kaufman
• Acknowledgments
• About the Author
• Index
• End User License Agreement