Teaching Your Adult Children Financial Responsibility: Why a Financial Plan Is Essential for Their Future
By Bryan Lee, CFP®, MBA
Chances are you probably started working with a financial advisor later in life, and your first financial plan came at an older age. But what if you could give your children a head start on building a solid foundation by encouraging them to create a financial plan early in life?
No matter where you are in your parenting journey, it’s natural to want your children to manage their finances wisely and responsibly—both now and in the future. Whether you’re a new parent thinking about your child’s future or an empty nester, helping your adult children create a financial plan can set them up to become good stewards of their wealth (as well as the wealth they may inherit from you). Let’s explore the reasons why it’s so crucial to help our adult children develop a financial plan that allows them to experience a stable and prosperous future.
The Ability to Manage Their Own Wealth
One common struggle among parents is teaching their children good money habits. You spent decades using your skills to build your wealth, but your children may have come after the hard work was already done and didn’t pick up on the example you set. Or perhaps you were too busy building your business or putting out fires that you didn’t have the time to help pass on your knowledge to your children.
Setting your kids up with a financial plan not only helps shine a light on their current habits (both good and bad), but it can also help them develop their own goals, dreams, and values outside of the family’s wealth, and do so at the most advantageous time – when they’re relatively young and can make changes more easily. Plus, studies show that if your kids put their financial goals in writing, they’ll be 42% more likely to achieve them.
It Helps to Preserve Your Legacy
If you have a financial plan, there’s a good chance legacy planning is a part of it. If you want your children to inherit your wealth when you’re gone, you don’t want them to squander it. This is another area where having their own financial plan can help.
When a financial advisor works with the next generation of a successful family, it helps ensure the parent’s legacy seamlessly transitions to the children when they pass away. It also establishes an ongoing relationship between the advisors and your children, which opens the door for clearer communication and transparency down the road.
Creating multi-generational wealth isn’t easy. It involves more than just minimizing taxes and maximizing investments – it’s about instilling the values and habits in your children that ensure they’re good stewards of wealth after you’re gone. That starts with a financial plan and passing down the values you had to create wealth in the first place.
A Plan to Support Their Future
Introducing your kids to financial planning can feel like an intimidating task, especially if it’s never been a topic of conversation before. The good news is that it’s never too late to start—and our team is here to help.
At Strategic Financial Planning, we can guide both you and your children down the path of your financial journeys. We analyze their current situation, help establish goals, and create an investment plan that aligns with their risk tolerance and time horizon. We pride ourselves on empowering our clients to lead the lives they envision through insightful financial planning and wealth management. To get started, call (972) 403-1234 or contact us online to set up a complimentary get-acquainted meeting so we can see if we are a good fit!
Bryan Lee is the founder and president of Strategic Financial Planning, Inc., an independent, fee-only financial advisory firm. With more than 27 years of industry experience, Bryan uses a unique client-first financial life planning approach and process to help his clients get the most out of life. Bryan earned his Bachelor of Business Administration in finance and his MBA in international finance from the University of North Texas. He is also a CERTIFIED FINANCIAL PLANNER™ professional.Bryan is actively involved in his community and industry and has served on the boards of several associations and charities, including the Dallas/Fort Worth chapter of the Financial Planning Association, the National Association of Personal Financial Advisors, Family Services of Plano, the CITY House, and the Journal of Financial Planning. Bryan has been featured in local and national media, including The Wall Street Journal, Investors Business Daily, CNNfn, USA Today, SmartMoney, Kiplinger’s Personal Finance, Financial Planning Magazine, The Dallas Morning News, and Dow Jones Newswires. And, he has been recognized as a Five Star Wealth Manager and one of Dallas’s Best Financial Planners in D Magazine every year since its inception and recently as a Top Wealth Manager. To learn more about Bryan, connect with him on LinkedIn.