Parents want the best for their children. Parents invest time and effort in teaching their children how to walk and tie their shoes, how to look both ways before crossing the street and how to read and do math. In fact, for many parents, that protective instinct doesn’t end as their kids transition into young adults.

The Financial Journey of Modern Parenting: Joy, Complexity and Sacrifice, a 2018 study conducted by Merrill Lynch and Age Wave, reveals that 79% of America’s 173 million parents provide some financial support to their adult children, with expenses ranging from weddings and higher education to rent, phone bills and groceries. The total amount for this continued “family bank” funding has reached a whopping $500 billion annually.

According to the survey, that astronomical figure also represents twice what parents invest in their own retirement accounts. That real cost is just one consequence that can result from a child being financially coddled. Enabling children in this area can create an environment of overdependence on providers, stunt self-sufficiency and ultimately breed resentment.

So how should you entrench the financial habits and knowledge with your kids that can help them be financially independent? Use open communication and smart practices to set your family down the right path.

Start them young

Introducing the concept and importance of money to your children early on can pay big dividends both immediately and as they grow. Talk to them about what money means to your family and the shared values you want to impart to them in that area. Indulge their inquisitiveness about money, possibly even through regular family meetings. The goal is to start creating solid habits and encourage the importance of financial independence. These lessons can help form reasonable expectations when they need help from you later in life.

Let them manage

Help your children get comfortable with money by allowing them to view it being used regularly and eventually handling it on their own. When out shopping, let them know the difference between needs, wants, splurges and smart purchases.

You can expose them to banking principles such as preparing deposits, paying bills and understanding debt. Give an allowance that can be tied to chores or simply as a teaching tool on money management, then set rules for savings and how it can be spent. Start with piggy banks and later small savings accounts to help them feel pride about saving their own money and as an opportunity to provide guidance.

Get to work

As your children become old enough, it could be time to urge them to get a part-time or summer job in order to ramp up their financial responsibility and business smarts. With significant items such as a car or a college education potentially looming, now is the time to expand upon what they have learned about saving, budgets and real-life expenses. These strategies can even include investments such as stocks, bonds and mutual funds. Debit and credit cards also can help them establish a sound credit record.

Teaching your children financial literacy is no easy task, but ongoing challenges for

young adults like the rising cost of education and shaky employment prospects make it an absolute necessity. Educate them early and often to create a more secure financial future for your entire family.

AUTHOR

As a child, Dallas-based freelancer Brian Keagy could never understand how an entire bag of recycled cans only equaled to $2.37. He’s gone on to learn better saving options and write about finances and lifestyle for publications like Intelligent Collector and Spirit Magazine.