Cementing the debt, savings and investing relationship
Congratulations! Your kids have finally reached adulthood. They’re now at an age when they can manage more complex financial responsibilities — like having a credit card, investing in the stock market, or paying a portion or all of their tuition or rent. As parents, one of your biggest challenges is to be there for them, even if they’re no longer at home. Keeping the lines of communication open helps you stay in tune with what’s going on in your kids’ lives and lets them know you’re there for them.
Using credit cards
A credit card is a great tool to help build both a credit history and a healthy financial life when used responsibly. Talk to your kids about what types of purchases they may want to pay for with their credit cards and which are best paid for in cash. Emphasize to them to spend only what they can pay off each month and encourage them to pay their monthly bill on time. For tips on how to manage credit, read this article.
Help your kids keep track of what they earn and spend over the year in order to figure out their average expenses and savings. Knowing this allows your kids to adjust their budget based on their current needs and lifestyle expectations. You can show your kids how you budget, and ask them to do the same. The CIBC budgeting tool is a great first step.
Educate your kids about investing early and regularly. This way, they’ll have a strong head start to achieving their long-term goals, including retirement. As the old saying goes, “it’s time in the market, not timing the market that pays off.” Share these resources with your kids to start the investment conversation:
Today, younger investors aren’t just looking to invest in companies with solid returns. They want to invest in companies that align with their social, environmental and governance ideals. That’s responsible investing. If your children are interested in responsible investing, share this video with them.
You know your kids best. With adult children, money conversations can include everything from savings and debt to investing. Preparing them now will lead to financial success later.
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