Your adult children might be better with money than you think. Here’s how you can guide them

Skip the part where you blame yourself for not teaching your children more about money at a younger age.

And the part where you blame them for not listening to good advice — even if it’s right in front of them.

And the part where you beat yourself up for even thinking about them being financially irresponsible — #parentguilt.

Breathe! Your kids might be more financially savvy than they let on.

Your best move is to encourage, empower and educate where and when it makes sense. Here are four ways you can help them out:

Encourage your kids to take a personal approach to finances

Successfully managing money has a lot to do with establishing habits based on systems that already work well in a person’s life.

Whatever their strengths are, lean into those to impart further financial wisdom. For example, if your daughter uses fitness apps to track strength and sleep goals, she’s probably enjoying money tracking apps like Mint, Wealthsimple’s investment tracker or Splitwise. Let her show you.

If your adult son likes working extra shifts for the money, ask him what he’s saving for, and if he’s using a high-interest savings account (HISA) to help. Message him with a link to a site that compares HISAs, like ratehub.ca. It might be the first time ever he’s been empowered to save — he may also surprise you with how much he’s already saved for a down payment.

Busy young parents may appreciate quick daily savings tips, like how to reduce banking fees, negotiate a better internet rate, or learn how to build a quick budget using a spreadsheet to help manage costs for groceries, housing and child care. And, as a grandparent, you can shift your gifting to RESP money for your grandchildren’s future education — a win win for everyone!

Compound interest is the golden ticket to becoming a millionaire

Just $11 a day (the equivalent of a latte and muffin) invested at a rate of return of 7.5 per cent over a working career is all it takes to retire with $1 million. What if your adult children knew that information or if they played around with a compound interest calculator like the ones on thecalculatorsite.com and getsmarteraboutmoney.ca? Have they asked if their employers offer matching savings programs?

As a late millennial and financial educator, I’ve learned that asking questions about dreams and goals, and having upbeat conversations that spark financial curiosity, are one of the most effective ways to help your adult children invest for the future. When the time is right in these conversations, it’s OK to insert helpful tips about the power of compound interest and reinvested returns. Some families with financial flexibility can match savings efforts to kick-start good habits for younger adults who might not have a solid income.

These conversations might also reveal how much further along your kids are with investing than you think. Chances are they’ve got an app to track it all.

Outsource the financial advice piece if talking about money is too sensitive

If your child has come to you for financial advice and your blood pressure is rising, it’s all good!

There are financial educators who do this full time. Outsourcing to a pro can neutralize sensitive family dynamics, and because these folks are experts, they likely know much more about trending financial matters for young adults than you.

For example, how much harder it is to buy a home now; how you can still be wealthy even if you’re a renter; the challenges of planning for retirement as employers provide less job security to workers today than past generations. A professional can bring fresh financial ideas, tools and templates to the table and offer blunt advice when needed.

The way this education part might work is you could introduce your child to your own financial planner, offer to pay for the services of a money coach or pay for a course that teaches budgeting or investing. You could also gift them a hot new book to guide them along. “Die with Zero: Getting All You Can from Your Money and Your Life” by Bill Perkins, “I Will Teach You to be Rich” by Ramit Sethi or Tori Dunlap’s “Financial Feminist” are three good places to start.

Close your wallet until a clear budget is established

Everyone needs privacy. But, if a financial request is being made of you, and you’re in a position to help, seek to understand why, and how your money might make things better.

This is an opportunity for your child to sharpen their pencil and establish a solid budget that demonstrates their need. Chances are they have already done this work using a Google budget template, or via a tool like You Need A Budget (YNAB) or EveryDollar.

Hear their pitch. Collaborate with them on ideas like “we’ll add xyz to the pot once you hit xyz savings goal” or tell them about other debt consolidation methods if that’s what’s needed. And, if it’s just not in the cards for you to support them, be honest.

Neither side needs to disclose the inner workings of their total financial picture, but talking openly about what is possible, and how having purpose for your money, can elevate financial literacy for both sides.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.