Financial Advice You Should Be Telling Your Adult Children

Handling money as an adult is very different from saving up allowance. If you're a parent, you’ve probably learned some financial lessons through punishing experiences, and you’ll want to pass that hard-won wisdom on to your kids so they can avoid making those same mistakes. 

It’s not about scaring your adult children into becoming penny-pinchers, even though they may initially accuse you of that. The point is that the earlier they learn good money habits, the better off their financial future will be in the long run.  

So share these tips with your children who are 18 and up, and who knows? They may even grudgingly thank you as you lay on your deathbed. 

Just because you have the “available funds” to buy something doesn’t mean you have to buy it. Spending less than you earn is the first step to building wealth, and it’s the very first good money habit adults should learn. 

Life throws a lot of catastrophes at you. Often. So save up for at least three to six months’ worth of expenses in savings for unforeseen calamities, like getting laid off or a drunk driver plowing into your house. Things happen! 

The sooner you invest, the more time your money has to grow through the miracle of compound interest. If you’ve never gotten into the wild and wacky world of investing, talk to a financial advisor before you invest one cent in anything. 

Credit cards aren’t free money, but sadly, many only internalize this lesson once their Master Card is maxed out and the repo men come. Pay off the card's full balance every month to ensure you’ll always have available credit and avoid paying interest. 

A solid credit score will save you money on bank loans, mortgages, and even insurance rates, to name but a few things. Pay your bills on time and keep your credit use low, and that number will go up, we promise. 

As much as we all dream of driving a new car off the lot, replete with new car smell, the sad fact is that it will lose value the second you put it in “Drive” for the first time and travel five feet. Consider buying a reliable used car instead. Those shiny new ones aren’t going anywhere, and you can always buy one later in life when it’s less of a heavy lift. 

You want a $7 latte. You need to pay the electric bill. This and other observations are all part of grasping a key precept — just because you want something doesn’t mean you need it. Prioritize necessary expenses over luxury spending. 

Knowing where your money goes prevents overspending. Budgeting apps, such as Rocket Money, show you all the money you spent in a single month, and when the app informs you that you spent over $1,000 on various unimportant things you barely remember, you will change how you do things. 

Successful hip-hop artists who become entrepreneurs will emphasize the importance of having more than one revenue stream, and they’re right. Tell your adult child to engage in freelancing, investments, or side hustles to provide extra security if their primary job disappears. 

This is one area where spending more money upfront is better. The product you’re buying that costs a little more money is likely sturdier and longer-lasting than its low-cost counterpart. So buy one good, upmarket pair of shoes instead of five inexpensive ones that won’t last a month. 

Congratulations, you got a new job and a fat raise to go along with it. Good for you! Does this mean you should start buying luxury items just because you can? Absolutely not! Just because you make more money doesn’t mean you should spend more money, so keep your expenses in check like a sane person. 

Health insurance is really expensive. Do you know what’s even more expensive? Medical bills, particularly when you’re uninsured. Many people have been financially wiped out because they needed healthcare and weren’t insured. The average cost of staying one night in a United States hospital is $3,025, so maybe get some health insurance?