Two: Let them know you are human, too
Your children can benefit as much from hearing about your smart moves as they can from hearing about your blunders. Everyone makes bad choices in the moment, or choices where they didn’t understand all the consequences.
If you have a story of getting out of bad debt, or realizing you should have started saving for retirement ten years earlier - tell it. Lots of financial advice comes in the abstract, but the true story what happened to a real person in their lives will make a stronger impact and could be make all the difference in their own choices.
Three: Learn to be okay with their choices
Your kids aren’t going to take all of your advice. You can do the best job in the world of selling them on the idea of setting aside money for an IRA one day and watch them blow their monthly budget on a spending spree the next.
It can be frustrating to let go. Parents that are too judgmental or visibly disappointed with their children's choices can drive a wedge in the relationship. If you show them that you can keep your own emotions in check, you build more trust and openness.
Four: Set rules and boundaries for financial support
It’s fairly likely that your children will need at least some form of financial assistance at some point after they leave home. That could mean sending them some money to cover a power bill or for groceries, or that could mean co-signing for a loan, or even having them moving back in with you at some point.
It’s up to you to decide how far you’re willing to go, but it’s a good idea to be open about that. You could go as far as having an explicit conversation about how much you’re willing to help (or not). It’s completely appropriate for you to set up boundaries and expectations.
Maybe you’ll be willing to bail them out of credit card debt once. Or maybe you’ll give them a $1,000 loan under the condition that they pay it back in six months and that they start setting aside $100 a month for an emergency fund. A positive constraint could be something like allowing them to move back your home for one year, but they have to show that they are contributing $200 to an IRA every month.
Whatever the arrangement, the key is to communicate clearly and that they give their agreement.
Five: Talk about investing
Your situation is generally going to be different from theirs; but, it’s a good idea to start a dialog about the different investment approaches out there and how that might fit in with their lives.