Your Kids Will Follow Your (Financial Planning) Example

Once your kids have reached age 18, you’re finished with parenting, right?

If you’re chuckling right now, it’s because you know that is far from the truth. Those of you with teenagers will find out soon enough!

The truth is, parenting is never really “over”. It just changes form throughout the years. No, you don’t need to provide 24-hour supervision or drive everyone to soccer practice anymore. But you never really stop teaching your kids.

In fact, with regard to financial education, the lessons you’re passing along right now might be some of the most important things you ever teach your children! The TIAA (Teachers Insurance and Annuity Association of America) examined this issue recently, to see how parental decisions can shape the way millennials view retirement planning.

Millennial respondents to the survey said that they have learned from watching various parental mistakes. A majority (61 percent) reported taking a different approach to retirement planning in order to avoid the missteps that their parents have suffered. About half are avoiding significant debts after watching their parents struggle with the same issue, and 38 percent consciously limit their spending to keep their lifestyles in line with their financial reality.

Yes, it’s great that this generation has been learning from mistakes, but does that mean you need to take the fall just so your kids can do better? No, definitely not! Many millennials also reported mimicking their parents’ wise financial behaviors.

There’s a common denominator between the two camps: Adult children often say that they learn from parental success or failures… When that information is communicated to them. In other words, you don’t need to be a financial whiz nor make enormous mistakes to set examples. You simply need to open up and communicate about finances, because your kids really are listening.

If you feel that you’ve made a mistake, it’s a good idea to talk to your kids about it, and let them learn from your missteps. But when you have a strategy that works, share that too.

And on that note, give us a call to learn more about financial planning strategies that can successfully carry you through your retirement years. We’d be happy to meet with your adult children, too, because it’s always better to start planning for retirement early.