Successful parents are always worried that if they inform their children of their inheritance before they’re ready, they’ll lose the drive to be successful themselves and want to live off money they haven’t earned. There’s also the possibility they’ll never learn to manage money or understand how to be financially mindful when it counts, potentially meaning they end up with nothing further down the road.
This is a valid concern. In 2013, the Pew Research Center conducted a study that found that 73% of adults between 40 and 59 with at least one grown child said they’d helped support them in the prior year. Half of those parents said they were their grown child’s primary means of support – some because their children were in school, but more than a third said it was for reasons other than education. Another study conducted by Pew found that nearly one quarter of 25-34-year-olds are now living with parents or grandparents, up from 11% in 1980.
It raises a lot of questions, but the reason these numbers have jumped is likely due to the large student loan debt many college-goers face, as well as the rise of unemployment across the country. More and more young people post-graduation are being forced to live at home in order to save any money for their future.
This can be a curse for financially successful parents, however, because they have the means to support their children, and they can quickly learn to depend on it and lose the ambition to eventually support themselves.
There are ways to combat this way of thinking, however, and an obvious first step is the ubiquitous summer job. Financial experts say that a good method to teach teens about saving and investments is to tell them to put away half of every paycheck during a summer job, and offering to match those savings to create an investment account. Learning about the stock market early can provide a great foundation for financial success later on.
Similarly, teaching children early about taxes, 401Ks, and insurance means they won’t be clueless when the time comes for them to deal with them in the “real world” and it will prevent a situation where they rely entirely on you to take care of their finances and the processes surrounding them.
The road to financial security for your kids isn’t going to be a short one, whether you’re successful or not, but it’s up to you to provide them with a solid education before they leave home in order to make sure you remain financially secure yourself – you don’t want to end up shouldering your children’s burdens well into adulthood.
If you would like a consultation to discuss your family law matter, please don’t hesitate to get in touch with Lyttle Law Firm. You can send an inquiry either through the website or by calling 512-215-5225.