How the most intentional families set their kids up for financial success — and what two of our own advisors who’ve lived the early-career grind know that most parents don’t think to ask.
Key TakeawaysWhat do financially grounded kids and families have in common? They started the money conversation early and were explicit about what family support would — and wouldn’t — cover. These are honest discussions about college funding, financial support, and family expectations, started early enough that there’s actually time to prepare for them. How much should you tell your kids about what you have? Usually less than you’d think. The goal isn’t secrecy. It’s building financial capability before financial dependence becomes a risk. What matters is sharing how wealth is built, what it’s for, and giving the motivation to build something of their own. What’s the most important first move for a young adult just starting out? Save first, spend what’s left. Get the 401(k) match. Open a Roth IRA — even if it’s just $50 a month. The habit formed at 22 compounds in ways that are nearly impossible to replicate at 42. |
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When a client asks us how to make sure their kids will be okay financially, our first question isn’t how much should I leave them? It’s what does ‘okay’ actually mean to you?
For some families, okay means financially secure. For others, it means self-sufficient, driven, capable of building something of their own. Those aren’t the same goal, and the planning looks very different depending on the answer.
We’ve seen this from the advisor’s chair and lived it ourselves. What we know for certain: the families who get this right aren’t necessarily the wealthiest ones. They’re the most intentional ones.
Start With the Conversation, Not the Balance Sheet
Once clients’ children finish college and enter the workforce, we’ll often meet with them directly — walking through the basics: how a 401(k) works, what a Roth IRA is, why investment allocation matters when you’re young. If they’re receiving annual gifts or have inherited assets, they should understand how that money is invested and why.
One question we hear often: should I tell my kids how much we have? Our honest answer: usually not — at least not with specific figures. Kids who grow up in a well-resourced home generally understand their family has built something. What they don’t need is a number that quietly removes the motivation to build something of their own. The goal isn’t secrecy. It’s sequencing. For more on this, see The Hidden Cost of Financial Silence in Wealthy Families.
Removing Struggle vs. Removing Growth
When we look at clients whose adult children are genuinely impressive — hardworking, grounded, financially capable — there’s a consistent pattern. They started early. Not “let’s open a brokerage account” early. More like: this family talks openly about money, values, and what it means to contribute.
One client brought her daughters into conversations about the family’s finances years before it was necessary — not to burden them, but to build them. She talked about college, about legacy, about the expectation that one day they’d give back. Her daughters are still young. But the mindset is already forming.
However, one of the harder conversations we have is with parents who want to eliminate every obstacle for their children. This instinct is understandable, but there’s a real difference between removing hardship and removing the growth that comes from navigating it.
Writing a blank check isn’t always helpful for parents or their children. Supplementing rent for a young adult in an expensive city while they’re building their career is very different from indefinitely funding a lifestyle. One builds a bridge. The other can quietly erode the motivation to build anything at all. Ultimately, to support children and young adults while also building good habits, we recommend getting clear on what support covers and how long it lasts.
For more about family giving, see Family Values and Traditions: How Wealthy Families Turn Generosity into Legacy.
Rights and Wrongs of Education Planning
The families who navigate college funding well share two things: they started a 529 early, and they were explicit with their kids about what the family would and wouldn’t cover. A 529 is one of the most straightforward tools available — contributions grow tax-free, withdrawals for qualified education expenses are tax-free, and many states offer a deduction for contributions. The earlier you start, the more time compounding works in your favor.
As for how much to cover, that answer looks different for every family. Some commit to 100%. Others say: we’re covering half, you cover the rest. That decision is shaped by a mix of factors — the family’s financial picture, their values around self-sufficiency, whether financial aid is in play, and how much they want their child to contribute. A student who contributes something — through loans, work, or merit aid they pursued — often approaches the experience differently than one who doesn’t. Either approach can work. What doesn’t work is ambiguity.
We’ve seen the alternative — a family that never had the conversation, a child who chose a school twice as expensive as the parents expected, and everyone scrambling to find cash at the worst possible moment. This could mean raiding retirement accounts, taking on debt, or derailing other planning priorities. Situations like these are almost always avoidable. The right time to have the money conversation isn’t senior year. It’s years earlier, around sophomore year of high school, when a teenager is just starting to think about what they want. Preparing for that conversation starts even earlier. To prepare, try to avoid a single conversation about money and school. It’s better to have a series of informal, low-stakes talks over the years than putting all your hopes in “the talk.”
From Experience: Our Advice To Every 22-Year-Old
Between the two of us, we prioritized getting a head start. Whether that means paying off student loans aggressively, working multiple jobs, or a few months of peanut butter sandwiches, prioritizing saving can be valuable, and can save you from some major financial stress like buying a car or a home. However, eventually we realized that extreme frugality has its own costs.
One thing we both came away with: being okay spending money is a skill, and one that takes real effort to develop. Going too far in either direction — hoarding every dollar or spending without awareness — tends to catch up with you. What we both got right early was saving first and spending what was left. The habit mattered more than the amount.
Practically, this means flipping your budget. Don’t save what’s left after spending. Spend what’s left after saving. First, decide how much you want to give and save, set both up automatically, then spend whatever remains. It takes the stress out of worrying about not having the cash you need while also being simpler than most budgeting systems — and it actually works because it puts priorities first.
- Get the 401(k) match. Don’t leave free money on the table.
- Open a Roth IRA and contribute monthly. Even $50. The habit matters more than the amount.
- If your teenager has earned income, consider matching their Roth contribution. It builds the savings muscle early and gives them skin in the game.
- Know where your money is going. Not to the penny — but well enough to understand what’s making up your financial life.
Whether you’re a young adult just starting your financial journey, a parent who wants to start thinking about how to have these conversations with your own kids, or a grandparent wondering about the smarter ways to structure how wealth passes to the next generation — please schedule a complimentary SWOT Session. We’d love to have that conversation.