How Do You Tell The Kids You Won’t Help Them Out?
My children are in their early 20s and still live at home. I don’t want to kick them out, but I’m aware that we need to start saving for our own futures. How do we get that through to them?
– Louise, 49, Townsville, Qld
The good news is that you can start saving for your own future and take steps to introduce your children to financial independence.
The most important thing for you to do right now is to create your financial strategy, so you’re clear on exactly how much you need to save. When do you want to stop working? And what are your dreams for life after work? What strategies will you use to help you have enough money? Many people downsize their family home which is also a handy way to start a conversation with your twentysomething kids about moving out.
When it comes to your kids’ financial independence, there are three easy steps you can take. The first is to get your children to do a cashflow. Sit down with them and help them clarify their net income and expenses. Even though they’re living at home, what are the things they can start paying for out of their own budget? Look at clothing, haircuts, socialising and mobile phone as a start.
The second step is to help them understand what it costs to run a household. Show them the budget for your household, what you spend for utilities, groceries, internet, home maintenance. They need to understand how much such expenses cost.
The third step is coming to an agreement with them on what contribution they will make towards these household expenses. This will give them a sense of financial accountability which is really important. It also provides them with essential skills they need to be successful in their own lives.
By Kate McCallum, financial adviser and author of The Joy of Money
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