Читать книгу Launching Financial Grownups - Bobbi Rebell - Страница 8

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 was my ability to identify and then get high-profile people to be interviewed. I always made sure they had a great experience, so they would come back. At one point, when I led booking at CNN's short-lived business news network, CNNfn, I supervised a staff that scheduled as many as 50 guests a day on various programs. I loved chatting with them before and after the segment. The guests were fascinating people with so much more to say than the three minutes typical of a television segment – often focused on data and quick tips – would allow. They had valuable life lessons to share. But a short television segment did not allow for that.

And then the big idea: What if I could give these high-profile people the opportunity to share personal money stories, not just regurgitate the data their company compiled in a survey. Now that would motivate and inspire readers to become financial grownups. I started close to home with the editor in chief of Thomson Reuters: Steve Adler. He loved the concept but was skeptical about whether I would be able to get what were effectively business “celebrities” to really share personal stories. That said, he was the first one to agree to participate, and I am forever grateful.

In the end, I pulled it off. How to Be a Financial Grownup featured a mix of business headliners from Tony Robbins, Kevin O'Leary, and Sallie Krawcheck to Cynthia Rowley and Jim Cramer. I even managed to snag an impromptu interview with actress and entrepreneur Drew Barrymore. I extended the concept in podcast form, and with about 350 episodes have been able to continue the conversation with young adults (and financially young adults of all ages) through that platform.

But I've also come to realize as my own children become young adults that parents play a bigger role than many of us fully appreciate. In an ideal world, my young colleagues at Reuters who were so hungry for money advice would have started their journey toward financial literacy at home.

Sometimes we, the parents, are the obstacles keeping them from truly growing into their own and moving away from dependence on us. The term helicopter parent grew in our culture for a reason. It's pretty accurate for many of us. If we coddle our kids financially, they will feel safe and protected. If we had a tough time in our own childhood, we want to shield them from the pain. Life is stressful enough. We want them to have an ideal, blissful, carefree childhood. But then what? How will they ever be on their own? And how will we secure our retirement if we continue to support the next generation at the expense of ourselves.

The urgency of this was becoming more apparent.

Here's the thing: if young adults don't launch as financial grownups, we, their parents, will not have the financial freedom we deserve and need as we age and move into our golden years. Without our children's independence, we risk our very survival. We pay for things for our kids with the best intentions. They are working hard. They deserve it, right? Plus, we don't want them to worry about us financially, and if we say no they might think we can't afford it and that we are in financial trouble and then panic.

Our own egos play a role. We've been trained that our #1 priority is to make our kids feel safe and secure. But in reality, our top priority should be giving our kids the skills they need – including financial skills – to survive and thrive independently from us. The coronavirus pandemic has amplified the urgency of this cultural phenomenon. In the spring of 2020 when the U.S. government began to implement stay-at-home orders, multigenerational living situations became much more common. College students were sent home from their dorms to continue learning online. Many young adults in their twenties left their roommates to shelter with their parents and sometimes grandparents. Suddenly everything we took for granted about the typical life stages of young adults was turned upside down.

With that came countless money questions. If a 20-something child came home, would they contribute financially to the household? How would that look? Many parents reported suddenly finding themselves at a loss. There was no precedent for the situation. Who pays for what? It seemed weird to charge the kids for groceries or for the Netflix account.

What if the kids were still employed but a parent was one of the millions of Americans who lost their job because of all the mandatory shutdowns? Would the child then support the parents? For how long? How would this in turn impact the next generation's ability to move forward as financially independent adults. What if there were grandparents in the mix? What would their place in the family look like from a financial perspective? How would everyone communicate and resolve expectations?

The pandemic has created a new layer of urgency to get our intergenerational money situation in order. Parents who spent more than they could afford supporting adult children may not have enough saved in an emergency fund for a rainy day – or a pandemic. They could become a financial burden on those very children, potentially creating a multigenerational downward spiral. And as we have seen with the pandemic, the economic balance can change faster than we imagine.

We may not have as much time as we think.

New data finds that nearly half of empty nester parents still financially support their adult children. And it's not just a one-time cash injection to buy a first home. The support often includes groceries, rent, cell phone bills, car payments, and dining out, according to data from 55places, an adult community comparison site.² According to a report by Merrill Lynch and Age Wave, 58 percent of young adults ages 18–34 say they can't afford their lifestyles without parental support. And parents who expect eternal gratitude from their children may get an unwelcome surprise as the kids get older. According to financial psychologist and CFP^® certificant Brad Klontz, subsidizing adult children can backfire:

It's not just dependence on money. It's a whole psychological syndrome. It basically leads to people who are less motivated, having less passion. They actually are more likely to sort of have self-loathing and depression, not feeling good about themselves. There's no sort of sense of purpose. And then ironically they end up resenting the source of the income.

Klontz adds that parents often use money for their own psychological reasons. They want to feel important and maintain their connection to their children. They use money and dependence as a tool to do so. Parents want to be needed.

I have seen this in my own home in recent years, as my husband and I have co-parented two children through their teens and now in their early twenties. We have interrupted vacations to help a child respond to a jury duty notice just before a deadline (call the number on the letter!) and have put off our own work to fill prescriptions and mail them to school rather than push a child to manage their own health care. We pay phone bills, give them an honor policy on charging things to our credit cards, and, yes, stretch ourselves financially to pay for their tuition so they will not have student debt.

Despite all the book knowledge I have as a CFP^® and a longtime business journalist, I have realized that raising these kids to be financial grownups has been a lot harder than I ever imagined. My husband and I have discussions and make plans, but we don't always agree. Actually executing a plan has often proved impossible. Teaching a young child to put money in three jars labeled Save, Spend, and Give, as popularized by Ron Lieber in The Opposite of Spoiled (HarperCollins, 2015), is less complicated than teaching an adult child how to manage their life as a financial grownup. It may be a priority for us, but that doesn't mean they feel the same way. The relationship between the adult child and their parent is so different. There is a ton of psychology and relationship nuances involved on all sides.

Reality check: when my stepdaughter came to me to help with her 401(k) at her first job, she was on her way out the door to meet friends. I had nagged her enough that she had finally caved and set it up. She thought she was done because, as I instructed her, she had put in at least enough to get her full company match. She just wanted me to sign off and say, “Great job!” She was already annoyed at me that her paycheck would be reduced by so much. But the money wasn't invested in anything, and she was about to walk out and didn't seem to care. So I was left with a real parenting dilemma. Do I:

 Say, “OK bye!” and let her deal with the consequence of the money not being invested – indefinitely?

 Say, “This isn't invested,” explain that she needed to choose an investment, and try to walk her though the choices despite eye rolls and her insistence that she needs to leave?

 Say, “Bye!” and then just put her money into a low-cost index fund without telling her and plan to circle back later on to explain – which may never happen?

In the end I got her to sit briefly. If we are being honest, though, she still didn't see the difference between a fixed-income fund and a stock market index exchange–traded fund offered by the same company, almost checked the wrong box, and then didn't stay for the explanation after I fixed it. I “saved” her from not having her 401(k) invested but failed to actually teach her anything about investing at that time. I vowed to look for a time to circle back. But this example shows that even with all the knowledge and best intentions, it is complicated.

My podcast business partner and former Money with Friends cohost Joe Saul-Sehy has reminded me that his parents cut him off financially when he was 18. Although the lessons he learned in a few rocky years were really tough, he eventually found his way. The truth is that in previous generations that was likely more common. Saul-Sehy has been more financially supportive with his own kids, who are now in their twenties. Thanks to his discipline and teaching, they are both in strong financial positions for their age, making adult financial decisions for themselves. One even owns a rental property that he is managing.

Frankly, though, many of us Gen Xers, and to a large extent also Boomer parents, love to hover and “help.” Many of us have gone from being just helicopter parents to snowplow parents, moving obstacles out of the way to clear the path and make life easier for our offspring. Concierge parenting, where we parents are standing by, on alert to solve problems, often by throwing money at them, is now emerging.

Realistically, chopping off support right after graduation isn't a plan most of us will stick to. So a surprising compromise may be the answer. On the surface, telling a kid to live at home until they can afford to live independently makes sense. Based on recent data, however, that strategy can backfire and can lead to lower occupational status. The concept: having kids live in their childhood home, with their parents taking care of them, keeps them in that life stage.

It seems counterintuitive, but the research actually supports the idea that having a child live independently, even if it means financially subsidizing that young adult's “independent” life leads to better career outcomes. The theory is that they are getting used to the daily rituals of financially independent living. Even if they are not paying 100 percent of the financial costs, they are starting to understand all the different money-related variables of life as a financial grownup. Parents can set up a gradual schedule to scale back on the support.

In my case, after living at home for about six months following college graduation and getting a few months of working at a real adult job under my belt, my parents helped me move into a brief rental and then buy my first apartment in my early twenties. I was so fortunate that I had a backstop, but the reality is that almost all my take-home pay went to housing costs and other fixed expenses. Sharing a 99-cent box of mac and cheese with a close friend most nights quickly made me aware of the costs of adult life. I pushed for promotions at work. I left for a better paying job. I watched my money very closely. I'm not sure I would have been as tuned in if I lived at home, with food always in the refrigerator and my laundry done each week.

Of course, this is not always financially viable for parents. Spouses may disagree, and every young adult is different in terms of their personality, readiness, and maturity. The key is that there has to be a phasing out of the financial support. We will get to that later in the book.

My work focuses on the money stories that drive us to find a path through the different life stages of growing up. But the focus had always been on the person doing the growing up. What I have not fully explored – and frankly solved for – is the role older generations, the parents and grandparents, need to play in the process.

Launching Financial Grownups is a call to action for parents of young adults who want the best for their kids but are beginning to realize that their own financial independence and financial separation from their children must become a priority as well. This will be your practical guide for how best to raise children to become financially responsible, independent young adults in our rapidly changing, increasingly competitive economy so they can create their own grownup lives.