5 Ways Boomers Can Help Their Kids Financially — Without Giving Them a Dime
Having children can be a joy. After you’ve raised your kids to adulthood, hopefully they’ve become financially secure and independent. But in today’s economy, it seems that this isn’t the case with many adult children.
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In fact, parents are increasingly providing financial support to their adult children: a 2024 Savings.com study found that parents contribute about two times more to their adult children than their own retirement accounts. What’s more? A full 58% of parents agree that they’ve sacrificed their own financial security for the sake of their adult children.
With that being said, many older parents don’t have the money to support their adult children. According to a recent GOBankingRates study — based on 999 respondents from July 2024 — nearly one-third (33.13%) of adults age 65 and older will have $0 to pass on to their next of kin.
Supporting your adult children should never mean sacrificing your own financial security. If you’re a boomer in this category, don’t fret. There are a number of things you can do to help your kids without giving them money.
Here are five ways boomers can help their adult kids financially without giving them a dime, according to Kiplinger and Kid’s Ain’t Cheap.
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1. Help Them Build Credit
Building a positive credit history is key to financial security.
Those with good to excellent credit scores can access more favorable loan terms for a mortgage or auto loan, for example, which can save thousands of dollars over the loan term.
One smart way to help them start building credit history from a young age is to add your child to your credit card account as an authorized user. Most companies will allow you to add them as young as age 16. Once they enter adulthood, they’ll already be ahead of the game.
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2. Show Them How To Invest
Investing has historically proven to be one of the best ways to grow your money over time.
It’s important to show your kids how investing works and why it’s important starting from a young age. Consider setting your kids up with a custodial brokerage account and show them the ins and outs of managing an account and trading securities.
This way, once they become an adult, they already have a handle on how to buy and sell stocks and assets.
3. Talk to Them About Taxes
Everyone in the workforce has to pay taxes, there’s no way around it.
That includes your kids when they get their first part-time job. It’s smart to sit down with your kids to explain how their income will be taxed and how much take-home pay they can expect based on their tax bracket.
4. Provide Emotional Support
Managing finances can be overwhelming especially when you’re just starting out.
But, emotional support and guidance as your kids start to get more involved with finances is key. Listening to your kids and offering encouragement can make a positive difference in their self-esteem and confidence, which can translate into a strong ability to effectively manage their finances.
5. Teach Financial Literacy From a Young Age
Sadly, personal finance education in grade school is not a requirement nationwide.
Unless you grew up in a family that stressed the importance of financial best practices, you’ll likely lack sufficient financial literacy as an adult. This can translate into big problems once you enter the adult world and you have to navigate the ins and outs of taxes, interest rates, investing, etc. Do your kids a favor and teach financial literacy while you’re raising them. Your wallet will thank you later.
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This article originally appeared on GOBankingRates.com: 5 Ways Boomers Can Help Their Kids Financially — Without Giving Them a Dime