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How to Offer Financial Advice to Your Adult Child

If you have children who are now adults, you probably offer them financial wisdom now and then. Or maybe you dole out advice on how they could better manage their money every chance you get. If you thought you could get away with it, perhaps you'd give your adult children a day-to-day calendar full of your financial tips.

It's understandable, even if it's not always appropriate. You've been around for a while, learned from your own money mistakes and naturally want to pass on what you know. You may also be entitled to offer your opinions if you're subsidizing your adult child's rent, paying some of his or her bills or offering frequent loans.

Whatever your situation, if you want to give your child financial advice, here's how to do it effectively.

Be thoughtful. If your adult child is self-sufficient and doesn't hit you up for money often, he or she deserves the benefit of the doubt. After all, how your son or daughter spends money isn't your business. But if you're feeling more like a bank than a parent lately, you may want to make your opinions clear. Even so, a discussion, not a diatribe, will probably yield the best result.

"It's very, very important to have tact when having this discussion," says P.J. Wallin, an investment adviser, certified personal accountant and certified financial planner at Atlas Financial in Richmond, Virginia. "Appearing as though not having an agenda or preconceived notion is extremely important to ensure the conversation starts off as just that -- a conversation. Otherwise, a defensive mechanism may be triggered at the onset, and the conversation is less likely to be a positive one."

So how can you converse without delivering a lecture? Wallin suggests talking about your own finances. For instance, ask for your child's advice regarding your investment portfolio or recent career developments. Depending how things go, that "may then lead to a discussion regarding the adult child's current situation," Wallin says.

Rachel Blank, a 24-year-old finance coach in the District of Columbia who runs a finance blog, The Day Tradette, likes the idea of bringing yourself into the conversation. Speaking from a young person's point of view, Blank advises: "Don't be afraid to tell your son or daughter about mistakes you've made either, like the time you were in debt. But say how you handled it. This way, it's about sharing experiences, not just giving orders."

Be a friend, not a parent. You've probably been told that your child needs you to be a parent and not a friend. But your child is now a grownup, so if you want your advice taken seriously, try talking to your son or daughter as a peer.

"I believe the issue with parents giving financial advice to their children is that they tend to take on an extreme position," Blank says. "Either they take a too authoritative stance, which turns young adults off, or they're too scared to even broach the subject. The key is to talk with your kids about money, not at them."

Young adults may not know everything, "but sometimes we like to act like we do," Blank says. "So don't treat us like idiots, or worse, children. Treat us like a fellow adult you're having a candid conversation with about our finances. We'll be much more receptive to your advice."

Set a positive tone. That's a suggestion from Simon Moore, a financial advisor and chief investment officer at FutureAdvisor, an investment management firm in San Francisco. "Generally, the 'feedback sandwich' is important, where you both lead and close with a positive comment or praise," Moore says.

According to Moore, you might start the conversation like this: "I'm impressed with how you're managing your budget so effectively despite having two kids in diapers and working a full-time job." Then you might say: "Have you thought about saving your future pay raises toward retirement? You're doing so well in other areas, and I just want to make sure retirement is one of your goals."

Note the subtle but positive finish. Your child might see right through you, but you aren't likely to get into a heated debate if you incorporate positive comments.

Be brief and accurate. Again, you shouldn't lecture. "Parents tend to ramble, and that's not good for kids 40 and under who have grown up on technology," says Peter Fisher, a father of four, finance professor at Linfield College and a founder of Human Investing, a management investment firm in Lake Oswego, Oregon. "The younger [the adult child], the shorter and more pointed the discussion should be. My guess is that they will have their cellphone, checking your facts in real time as you share."

Fisher's second point: "Know what you're talking about when offering career and financial advice," he says, adding that your child may quickly check your advice online. "Any of them, in a matter of seconds, can get up to speed and be as much of an expert as you in short order."

Find a stand-in to offer the same advice. Maybe you're not right for this particular role. Your kids may typecast you as someone who deserves eye-rolling no matter what you tell them.

"Parents may be the worst people to offer financial advice until children have children of their own and better empathize with the role of the parent," says Irene Frieze, a professor of psychology at the University of Pittsburgh.

If you keep striking out, bring in a pinch hitter, suggests Michael Gauthier, a certified financial planner and CEO of Strategic Income Group, a financial planning and management firm in Chandler, Arizona. He says he's had a lot of success with clients when they hold family meetings. That is, a family meeting with someone who isn't a member of the family. You could enlist your accountant, a financial advisor, your attorney, a trusted and neutral family friend or even member of the clergy.

"It's funny, but I can say the exact same thing to the children as the parents said, but because it didn't come from them, and it came from an 'expert,' they seem to listen more," Gauthier says. "My advice would be that if any parent is struggling with having their adult children listen to them, find a trusted intermediary who can gently heed the same advice. It might not be the words of wisdom that are the problem. It might just be the person who is saying it."



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