Launching Financial Grownups. Bobbi Rebell

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СКАЧАТЬ in a crisis – financial or not. A family has to be an ecosystem that embraces its lifelong connections and support. Being a financial grownup does mean that our children have to be able to run their own lives and that as the younger generation moves through life, the roles and financial responsibilities will have to adapt to different life stages and challenges.

The Grownup Mindset

      The most realistic mindset is to be able to adapt when your kids need you and to separate that from ongoing financial support of adult responsibilities because it is just easier to use money to solve problems and challenges. That said, there is nothing wrong with helping a child with the down payment for a home that will accelerate their path to financial independence if it does not impede your own financial goals and security. What should be avoided is paying their rent for a couple of decades! If that is happening, the child is living a lifestyle way beyond their means, and both generations need to do some serious introspection.

      Creating or contributing to a college fund for a grandchild will ease the burden on young adults struggling to pay for the everyday expenses of parenting young children. That's a wonderful gift that will have a positive and priceless impact on the family. Remember, that grandchild's education will help launch them as financial grownups. And yes! You can absolutely treat your kids to a memorable family vacation, a nice dinner out, or a spa day. It's fine.

This all assumes that you can afford to do this – which is not always the case. According to a 2019 Bankrate survey, 50 percent of parents sacrifice their retirement savings to help their adult children.¹ In that case, we need to resist our desire for generosity at the expense of our own self-sufficiency in the years to come. It is not surprising that this trend continued during the pandemic in 2020. CreditCards.com found that 79 percent of parents who helped their kids financially during the pandemic did so with money they would have used for their own personal finance needs.² This data is alarming because parents are putting their own financial health at risk, increasing the chances that ironically they will need their kid's financial help.

      Let's face it: the only thing worse than needing your adult kids to bail you out financially is probably them not being able to help because they are still not financially secure themselves. In fact, during the pandemic, many parents faced unexpected economic turmoil and were reliant on young adult children to help the family. That's why it is so important to develop a family ecosystem, where we can all aspire to be financially independent of each other but know that we are also there for each other in the seasons of life where we need each other.

The Benefits of a Strategic Boost

      Jason Feifer is editor in chief of Entrepreneur Magazine and hosts several podcasts, including Hush Money. He lives in Brooklyn with his wife and kids. As a child, he says he was not materialistic. He would chide his dad for buying nice cars and was keenly aware that his family had a strong financial foundation.

      I reached out to Jason after his Hush Money podcast cohost Nicole Lapin called him out for having recently admitted that his parents still paid his phone bill. Jason, age 39, appeared to be a fully financially independent and, frankly, incredibly successful adult. I wanted to hear more about what exactly was going on in the Feifer family ecosystem, so I asked his dad, Roy Feifer, to join us as well. Our conversation revealed a pattern of parental financial support early in Jason's career. In context, though, it was done with intention and purpose and got successful results that may not have happened otherwise. Support at the right time can be a powerful strategy if it can fit into your family ecosystem.

      Jason explained that he resisted financial support early in his career even as his dentist dad would offer it. But Jason was ambitious, and when he got an offer for his dream job he was determined to make the move to New York City. “That meant that all my expenses went way up. I was 28 years old. It was 2008. I was making $50,000 at Men's Health and I got their blessing and encouragement.” Jason also got their financial support. They subsidized his one-bedroom Manhattan apartment so he would not have to live far away from his office and face a tough commute while working long hours. He was also able to live without roommates. His parents were pretty hands-on when it came to the logistics of finding that place and making sure Jason knew all that would be involved in renting an apartment and running his financial life in New York. Some might say they were doing a little concierge parenting, but they also were steering him on a deliberate gradual path toward independence.

“I remember being very mindful every month,” Jason explains. “I didn't really like asking them for the rent. They would always give it. There was never any pressure not to give it, but I wanted to be as financially independent as I could.” In Jason's case, he was very motivated to pay his own rent, and while the plan was not formalized, he did gradually pay more and more of the rent each month as his financial situation improved over the next few years. He stressed to me that he might not have made the move to New York City for that dream job had it not been for his parents' support – both emotionally and financially. It was a strategic financial boost that was money well spent because the end result was a more lucrative and fulfilling career.

      Jason's dad was very transparent with him about money during his childhood. Many conversations happened in the car. Jason recalled one memorable conversation in high school when his dad told him how much his dental practice brought in each year. “I remember being shocked by it at the time,” he says. “Because it was a successful dental practice. And then immediately having an understanding of how much money was coming into the family versus how much was being spent.”

      Jason's dad Roy has continued to be open with his adult children even as they have had children of their own. “I do tell him exactly what our finances are, what our savings are, what's in the bank, and where we stand financially and my investment strategy.” Roy explained why he felt so compelled to make sure his kids (Jason also has a sister) were aware of money and their family values. His own father, a postal worker, had passed away at age 49, after having not worked for years for medical reasons. At the time of his father's death, Roy was a sophomore in college at State University New York at Albany. “Dad was in charge, and he didn't discuss anything there. His motto was kids were to be seen but not heard.” Roy, his brother, and mom had to fend for themselves. There were lots of money decisions to be made because “our finances were kind of limited,” Roy told me.

      Roy didn't want his wife and kids to be in that kind of predicament should anything happen to him. “So I brought to the marriage frankness and openness that everything can be discussed – and that included finances.” Roy also stressed that his wife has been very much an equal in both the financial decision-making and in the discussions with their kids about money. Consistent messaging within the family is essential. The couple also let the children learn about their financial values by example and observation when they were growing up, even as the family became more financially successful. The Feifers lived a low-key lifestyle below their means in South Florida and had a large amount of savings. The parents didn't talk directly about a budget because the kids were already extremely careful with their spending and extremely financially conservative. They led by example, not by lecture.

The one soft spot for Roy was his love of luxury cars. And that's where the tables turned at times with both kids chiming in, urging restraint. At one point, Roy says his daughter, Jody, talked him out of buying her a Lexus, arguing it was too fancy and she would be embarrassed. You see, when it comes to family ecosystems, it's complicated. And parents should be aware that it can be very much a two-way street, especially as the kids get older and have their own distinct points of view when it comes to finances.

      That's СКАЧАТЬ