How to talk to Kids/Parents About Money


Friend: “My daughter is graduating from college, so I guess it’s time for ‘the talk.’” Jill: “Didn’t you do that when she went away?”

Friend: “Not THAT talk, the MONEY talk!”

Why is it so hard for some families to have tough conversations about money? The answer is obvious: Because financial matters are often weighed down by emotional baggage. That’s why it can be so hard to talk to both your kids and your parents about something that should be quite easy.

Let’s start with the kids. Since it’s graduation season, it’s an ideal time for parents begin the conversation, especially if your child is graduating with student loans. Your role as financial advice-giver should begin with laying out a strategy to attack the debt. Depending on their circumstances, your son or daughter may want to consider deferment, consolidation and/or income-based repayment plans that are offered through the government. There is a lot of valuable information at

Even if there are no loans, the sooner that we encourage our kids to pay attention to their money habits, the better off everyone will be. The first step is to track how they are spending money. With that information, they can create an emergency reserve fund that can cover six to 12 twelve months’ worth of living expenses. And of course, encourage those recent grads with jobs to start contributing to retirement accounts, at least up to the company-match levels.

You should explain to your kids the importance of establishing and maintaining good credit. If you have so-signed on a credit card during the college years, it’s time to let the kids fly solo. To get started, encourage them to use a secured credit card, which is a great way to begin the process, without the liability of them racking up credit card bills. Remember that debit cards may be useful in managing cash flow, but they do nothing towards building credit.

Since you are already having the tough money talk with the kids, it’s also a great opportunity to talk to aging parents about their financial situation. Now this is a bit thornier, because you will be in full-blown role reversal. Unlike the talk with your kids, your parents may be more reluctant to have the conversation.

Remember that you are trying to open a dialogue to ensure that your parents know they can talk openly and honestly with you about what’s going on in their financial lives. Emphasize that this is an opportunity for them to make their own decisions and to make their wishes known.

The areas that you should be discussing include: cash flow (do they have sufficient income to maintain their lifestyle? Are they dipping into investments and savings to fund the gap between Social Security and needs?); estate planning (do they have current documents? Where are the originals? What is the name/contact information of the attorney who drafted the documents?); investments (Who is managing? Are they comfortable with risk level?); and insurance (Where are the policies kept?).

If your parents seem reluctant to reveal details, don’t push them, but say something like, “If you don’t want to talk to me about this, I understand, but you should consider seeking advice from a third party, like an estate attorney, a Certified Financial Planner or a CPA.” Before you send them down this path, be sure to remind them how financial salespeople can be very convincing. Tell them to talk to you or to get a second opinion before purchasing any financial product, or opening new accounts, or offer to receive duplicate statements sent to your address to make sure your parents are buying suitable investments.

Finally, you can only do what you can do. If your parents simply shut down or refuse to talk to you about their money, don’t fight it. They may not want to talk today, but at least they know that the door is open.