It’s the time of year when everyone returns home to the nest. Between meals, travel plans and old traditions, there are usually a few quiet moments when parents and young adult children can truly connect.
As many parents know, these moments can be fleeting once young adults are out in the world, but when they do occur, they can be a great time to check in on how things are going — including with money.
Whether your child is on break from college, in the midst of job hunting or settling into their first job, the holidays provide an ideal opportunity to have a meaningful conversation with the young adult in your life.
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As they begin to establish their own financial house, you can play an integral role in guiding them in the right direction, helping them build sound money habits.
But just like any conversation surrounding money, it can feel a bit awkward and tricky to navigate, especially when it’s with your own adult child.
So, how can you approach this conversation in a way that feels supportive rather than stressful? It starts with listening.
Start by listening, not teaching
For many young adults who have entered the “real world,” a lot of change has occurred in a short time. Maybe they have a new degree, a new apartment or a new job. All of that comes with excitement, but it also brings new stress.
As parents, our instinct is to share advice right away, especially if we’ve already learned a few lessons the hard way. But the most productive conversations often start with questions, not instructions.
Try asking, “How are you feeling about balancing everything now that you’re on your own?” or “What’s been harder about living on your own than you expected?” or “What’s been the biggest surprise about managing your own money so far?”
Questions like these keep the conversation open and show respect for their independence.
You can offer guidance once they start talking, but the goal is to help them think through decisions, not to make those decisions for them.
When freedom meets cash flow
I often notice something similar between two very different groups of people: new retirees and young adults entering the workforce. Both have more freedom and more control over their time, and both tend to spend more than they expect.
Retirees fill their days with activities that cost money instead of earning it. Young adults suddenly have steady paychecks and fewer restrictions, so they may start spending quickly without realizing how fast it adds up.
Helping them pause and plan before habits form can make a big difference. If they get in the rhythm of setting money aside for certain goals early on, it becomes second nature later.
Rethinking ‘needs’ and ‘wants’
Parents often teach kids to separate needs from wants, but for young adults, that line can feel blurry. Instead, I like to talk about goals: short-term, intermediate and long-term.
Short-term goals are the basics that happen month to month, such as rent, groceries, phone and internet bills, insurance, loan payments and yes, hobbies or entertainment. These are the recurring expenses that make up a budget.
When speaking to the young adult in your life, consider asking simple questions to open the door to this topic. For example, “How did you choose your health insurance at work?”
Many young employees pick the cheapest option because they want to keep more of their paycheck for other things. That might work fine for someone who rarely sees a doctor, but it can be a costly mistake for someone who takes regular medication or needs specialist visits.
Talking through a real example like this helps them see how financial choices connect to daily life.
Intermediate and long-term goals involve saving for the future. That includes building an emergency fund, contributing to a retirement plan and investing beyond the basics.
I often tell younger people that saving should be meaningful but manageable. They should feel the impact of what they’re putting away, but not to the point where they’re choosing between Netflix and Hulu each month.
If they’re worried they aren’t saving enough, ask whether their company offers a retirement plan match. That match can help fill a savings gap. You can also talk about how different goals call for different types of investments.
Money set aside for emergencies should stay in cash or a money market fund, while retirement savings can be invested more aggressively for long-term growth.
Keeping the conversation constructive
It’s natural for parents to want to protect their kids. But once those kids become adults, the best kind of protection is guidance that builds confidence.
I learned that lesson myself. When I started working, my parents could tell I wasn’t taking their advice seriously. They eventually introduced me to their financial adviser, and that conversation changed things for me.
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Talking with someone outside my family helped me see money differently. I didn’t feel like I was being told what to do; I felt like I was being treated as an adult who needed to make real decisions.
It also helped me realize that my parents weren’t trying to control me. They were trying to give me a head start.
Looking back, it was one of the best gifts they could have given.
Parents can take a similar approach. Offer to review your child’s first benefits statement together, share how you handled saving in your early career or connect them with a financial professional you trust. Sometimes hearing the same message from someone else helps it sink in.
Turning a holiday moment into a lifelong lesson
Money conversations don’t have to feel heavy or uncomfortable.
The goal isn’t to critique their spending or point out mistakes. It’s to help them build the confidence to manage their finances on their own and understand how today’s choices shape tomorrow’s options.
Once you’ve broken the ice, it gets easier. That first conversation can be the starting point for a more open, ongoing dialogue about money — one that evolves as your child’s life does.
From first jobs to marriage to buying a home, there will be new questions and new opportunities to share guidance when they’re ready for it.
So, this holiday season, find a quiet moment after dinner or while wrapping gifts and start the conversation. Ask questions, listen carefully and share just enough of your own story to help them see the bigger picture.
The time you spend talking now could be what helps them make smart, steady decisions long after they’ve headed back to their own lives.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
