Launching Financial Grownups. Bobbi Rebell

“the kids,” around even though they were in their twenties, at home. A routine developed. My husband, stepdaughter, and I were all working. My stepson finished out his sophomore year at college virtually from his bedroom. My 12-year-old completed sixth grade via Zoom. We were all at home all the time. We were less busy. There was a lot less logistical planning and more hanging out. We weren't running late to get somewhere. There was time. We started talking more.

      Some of those talks were with our older kids about our own finances, because sometimes they were in the room when things came up. We had avoided sharing much when they were younger because we did not want them to worry – or to know where we'd messed up. They had never expressed much interest. Their college tuition bills were paid, and as far as they knew we never had any stumbles. They had no idea all the ups and downs we had over the years. It became apparent that we had sheltered them too much by not giving them a realistic view into adult financial realities.

      On the upside, it became clear that with so much upheaval in the world, the older kids were more willing to listen. They were hearing stories about massive job losses. They were worried and asking questions. They were paying attention to our answers. It was starting to sink in: their financial outlook was closely tied to ours.

      And since they were quarantined, they had nowhere to go.

      We had a captive audience.

      We also started to realize that this financial dialogue was a two-way street. We were all stakeholders. The conversation was about more than teaching them financial independence from us so we could have our financial freedom. We needed our kids to know more so they could be our backstop in case the unimaginable ever happened. What if we needed them to take care of us? Living through the coronavirus pandemic created a new urgency to make sure our kids were ready for the next who knows what.

We were not alone. I started to hear stories of kids leaving school to come home and help save their parents’ businesses. Many stepped up to help out with bills. Family finances tend to become a lot more transparent in a crisis. I have been so impressed with all the young adults who rose to the challenge of giving back to their parents when they needed them most.

      That is the silver lining in this unique chapter of our lives. The time families are spending together has created a season of our family evolution where we have had few distractions and many opportunities to better understand each other. Families have bonded in a common mission: to protect the family financial ecosystem. It's one thing to “get financially naked” with your partner; it's another to do it with your kids no matter their age.

      The door has been opened to financial conversations happening more often and more organically. It's pretty much impossible to filter conversations when you are with everyone all the time. People started to let down their guard while we were quarantined. Information leaked out. And we started to see things we used to be too busy to notice.

      For my family, because we are all in the same place, all the time, the kids literally see how intensely my husband and I work. They see how our cashflow expectations can sometimes impact our decision-making. They have a front row seat to witness tough decisions we sometimes make about how best to spend our money. They also see that we still make some mistakes along the way and that it is not always smooth sailing. They see how frustrated we get when we can't buy something because we have to allocate savings to something urgent and unexpected, like a big repair or a medical bill. They see us make tough choices about spending and how often we can go out with friends to nice dinners. They know our financial resources are not unlimited despite each of our accomplishments.

      On the flip side, we have also been able to see more clearly why the kids make decisions that used to baffle us. We observe more and can better understand the context. Money conversations that used to focus on simply getting money to pay for something they want have largely gone away. When they do come up, there is a new sense of appreciation of all the work it takes for us to earn the money to give to them.

      Will this progress in communication and transparency last when the world opens up again and we no longer have a captive audience? Let's hope.

      For families, I see an opportunity to hit the restart button on some of the bad habits we as a society have developed that undermine our true goal: launching the next generation of financial grownups and giving all of us the best shot at the financial security and freedom that we all deserve.

Introduction

      In October 2019, Kelly Ripa appeared on The Jimmy Kimmel Show and joked about how her son, Michael, was adjusting to being an adult: “He hates paying his own rent, and he's chronically poor. I don't think he ever really experienced extreme poverty like now.”

      The comment, taken by some out of context, sparked some backlash. But Ripa stood by her parenting strategy, posting later on Instagram, “Michael goes to college and is a senior and works full time. He is in his first non-parent subsidized apt with roommates. I didn't grow up privileged and neither did @instasuelos [her husband, Mark Consuelos].”

The truth is, Ripa and her husband are probably doing a better job at helping their kids become financial grownups than the majority of Americans. Data from Merrill Lynch and Age Wave shows that 79 percent of parents are providing support for their adult children.¹ As so-called helicopter parents get older, they seem to be doubling down on their overparenting. This is having a huge impact on their adult children's ability to gain financial independence. Many aging Gen X parents are on a dangerous path that could have catastrophic consequences for their own golden years. I first witnessed this phenomenon as a parent. And then, as a business journalist and a certified financial planner™, I realized I could become part of the solution.

      It started on New Year's Eve 2019.

      My two older kids, both in college, had come home for the holidays. We had been discussing putting their earnings from their jobs into Roth IRAs. They would then be able to grow their money without paying taxes on the earnings. They both had agreed to do it. #parentingwin

Yet here we were, hours away from the deadline to open an account. It wasn't done. Nothing was happening. I had given them both the phone number and email of the brokerage firm we used as well as the contact information for an actual human they could call with questions who had been assigned to our family. I had told them that I was available if they had any questions. And they were free to research and find their own investing platform if they didn't want to use the same company. I had reminded them of the deadline. They had said they would do it.

      But here we were.

      And here I was, having spent a couple of decades as a financial journalist. I actually wrote the book about becoming a “financial grownup.” After the book came out, I had gone one step further to bolster my knowledge and became a CERTIFIED FINANCIAL PLANNER^™ practitioner. I was facing the harsh reality that I, as a parent who knew on paper what should be getting done, could not get my own kids to do this one simple thing.

      My own journey into this laser focus on getting adult kids to pay attention to their personal money situation started a few years earlier when I was a full-time business news journalist at Reuters. After 15 years in the business, I was the old guard. Younger colleagues would ask me for money advice. I always thought that was odd, because literally everything is available online. (The IRS website, irs.gov, if we are being honest, is pretty awesome. Check it out sometime.)

      But the advice was never put in human terms, so it felt like a chore to them. They wanted to hear from someone they viewed as accomplished. They wanted to hear how successful people – role models – made financial decisions in the context of real life. And of these financial decisions, they wanted to know which ones were the most important for accomplishing their larger adult goals. From my experience offering guidance to my younger colleagues, I came up with the idea for my first book, How to Be a Financial Grownup.

      In my years of journalism, one skill that had carried me far