Are your twenty-somethings about to move out on their own? If so, equip them with essential life lessons before they begin lives of their own. Every parent struggles to deliver actionable, relevant information to young adults, even if the instructions seem to fall on deaf ears. The good news is that there are several powerful things you can convey to youngsters as they approach full adulthood.
What are the essential points to pass on? Focus on common challenges, like purchasing a car, refinancing college loans, saving money for retirement, building a good credit rating, buying a home, finding a suitable marriage partner, and steering clear of substance addictions. Don’t worry if your sons and daughters respond unenthusiastically or tell you they already have all the facts. Some of the information will sink in eventually, which means your effort is not in vain. Here are a few of the relevant points they should know about.
Buying a Car
For adults raised in the US, Europe, and parts of Asia, purchasing a car is a rite of passage into the grownup world and out of childhood. There are dozens of sub-lessons in the car buying curriculum, including how to negotiate with sellers, evaluate bargains, find vehicles that one can afford, and acquire suitable insurance coverage. Fortunately, there are books and free instructional videos that cover the topic thoroughly. Review one or more helpful resources with your child and explain the pertinent steps of the process.
Refinancing Student Loans
Don’t miss the opportunity to talk to children about the pros and cons of refinancing education loans. Most young adults are clueless about this topic and can use a strong dose of truth on the matter. Before launching into your explanation, be sure to gather all the relevant facts so you can answer any questions they throw at you. The best way to prepare yourself is to review a detailed guide that discusses all the advantages and disadvantages of refinancing education loans. Working adults of any age who are armed with that kind of information can make the right decisions about how to handle college debt should they choose to refinance it at any time in the future.
Saving for Retirement
Putting enough money away to fund a comfortable retirement is a broad topic. Let your youngsters know that there are numerous books and other resources they can turn to for additional information as they need it. For now, explain the difference between the two main kinds of IRAs (individual retirement arrangements), the traditional account and the Roth version.
Show them on paper how using pre-tax earnings means a current reduction in income taxes but that after-tax funding, with a Roth IRA, is usually the better way to go. Roth accounts give savers a chance to earn interest for decades and make tax-free withdrawals later. Once they grasp the core concept, you can rest assured that they are ready to invest on their own, with a little help from the internet, of course.
Teach adult children the basic steps for building a credit rating. Most college graduates have either a thin financial history or none, which is why it’s so critical to show them the ropes. Go through the standard steps about how paying bills on time, using a secured card, and using free annual bureau reports can give them a leg up on becoming creditworthy working people. Warn them that it can take as long as a year before bill paying, and responsible card usage put them on the radar of the reporting agencies.
What is the best route to recovery for those who find themselves falling prey to a drug, alcohol, or gambling addiction? Explain to sons and daughters that many who enter the professional world suffer from psychological and physical ailments related to addictive substances and behaviors. The thing that separates the unfortunate from those who recover is the ability to seek help.
If you have a personal story, consider sharing it so your kids can see firsthand how you dealt with the challenge. Let them know they can always call on your for guidance and non-judgmental assistance should they need them. Without preaching, discuss the importance of being honest with themselves about life situations. Further, warn them of the potential legal and long-term physical problems that addictions can cause.