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Home > Our Resources > The Whitnell Way > How Do I Help My Adult Children Learn Financial Discipline?

How Do I Help My Adult Children Learn Financial Discipline?

Why You May Want A Partner For This Job

By Michael Loizzi
Learn more about Michael Loizzi by visiting his bio page.

When I sit down with clients today, I am hearing a consistent theme. A new thread is running through our conversations. It has little to do with investments, taxes, retirement or other topics that have traditionally been a focus. Instead, my clients who have adult children now often want to know how they can help those children adopt the financial disciplines that allowed the parents to achieve success. These parents know that their children will one-day inherit a large portion of wealth and they want them to be prepared to be good stewards of that wealth.

This is not as easy as it may sound. Most of what needs to be “learned” cannot be taught in a classroom because it has to do with lifestyle, mindset, life-experiences and appetites. If you or someone you care about is struggling to achieve this goal, I might recommend that you consider us as your partner in this endeavor. Here are my reasons.

How I became aware of this situation

Over the last several years, my affluent clients have been making a surprising request that at first I did not know how to respond to. After we would finish a review of their financial situation, I would ask if there is anything else I could help them with. Their questions surprised me.

They would say things like:

  • My child just graduated from college, is getting their first job and now they have to learn how to live on a budget. Can you help them with this?
  • My child has been working for a couple of years now and does not seem to be investing enough in their 401K plan. We’ve talked to our child about this, but the message doesn’t seem to be getting through. Can you help?

This is when we started offering a second-generation wealth planning service. This service is specifically for the children of affluent parents who may not be aware of the best ways to build and manage wealth.

Before I explain how this approach works and why it seems to be successful, I want to characterize the often complicated family dynamics that make this goal difficult to attain.

The parent’s point of view

Affluent parents have learned some financial disciplines that have positioned them to accumulate wealth. Here is a partial list:

  • They have learned how to live within their means.
  • They have learned to save and invest wisely.
  • They have learned to take calculated risks – especially those who own businesses.
  • They have learned the impact of expert counselors and advisors.
  • They have learned the value of hard work and diligence.
  • They have learned how to set and achieve goals.
  • They have learned the importance of constancy and taking a long-term-view.
  • They have learned delayed gratification.

These are all important lessons that, in part, account for the success that parents have achieved. But herein lies the challenge. Most parents have learned these lessons over a lifetime of trial and error, often marked by mistakes that they did not repeat. Their children, on the other hand, are just beginning to encounter the situations and circumstances that will give rise to these lessons.

Why parents and adult children struggle with these issues

The parents have usually wanted to build their wealth so they could care for the ones they love, shelter them from life’s difficulties and give their children every advantage. This desire to protect their children often shields those children from learning life lessons that could benefit them – the hard way.

So this begs the question – is learning from the school of hard knocks the only way or even the best way? I really don’t think so. But it appears to me that adult children often do not want to listen to the wisdom of experience from their parents. I explain more about this below.

Here is the situation as I see it. Parents want their adult children to learn, but not the way they had to learn – from the school of hard knocks. But just when adult children are in greatest need of guidance, they may be the most resistant to that guidance. This is indeed a conundrum.

The adult child’s point of view

Children of affluent parents often have little visibility into what it took for their parents to build wealth. Usually the parents were building the wealth while their children were still young. So from the child’s point of view, the money has always been there.

The children typically grew up in a middle-to-upper-middle-class home. All of their needs and most of their wants were satisfied because this is why the parents worked hard. A lovely home, their first car, expensive vacations, a good education and all the benefits of affluence have been the crucible in which the child’s lifestyle expectations have been set.

While children of wealthy parents certainly appreciate the lifestyle benefits of affluence, it is very difficult for them to appreciate the work and personal discipline that is required to build that wealth. How could they? Their life experiences have not made this necessary.

The adult child’s situation

But then something changes. Right about the time of college graduation, parents often want to push their children toward complete financial independence at a time when those children are in the weakest earning stage of their careers. Suddenly, there is a huge gap between the lifestyle to which they had become accustomed and the lifestyle they can now afford.

But there is a psychological factor here as well. Children of successful affluent parents usually want to be successful as well. But they typically don’t want to be under mom and dad’s wing. They often want to set their own course, blaze their own trail and make it on their own.

So while they may need mom and dad’s advice and could even greatly benefit from it, they might not be particularly open to hearing it. This becomes even more complicated if parents are ratcheting back financial support.

How might a partner benefit this conversation?

Have you ever had the experience of saying something to a loved one, which they ignore, only to have them hear the same advice from someone else and they suddenly get it? This is nowhere more true, it seems, than with children.

I cannot explain why, but somewhere around adolescence children seem to think their parents know very little. It’s usually around age thirty when children discover how wise their parents actually are. But by then, it may be too late. The adult child may have charged up large credit card debts or developed habits that could be very hard to change.

Sometimes a third-party, an expert, someone without a vested position in any standing argument, can say something that really gets through. If this expert can start working with a young adult right out of college, the benefits could be life-altering and life-long.

This has been our experience when working with children of affluent parents. Often the parents have built a relationship with one of my senior colleagues here at Whitnell. Their children usually prefer to work with someone closer to their own age. The parents would like the continuity of one financial advisory relationship and the comfort of knowing their wealth will be looked after by an organization they trust.

What to do next

If you are in the position I’ve described here, I’d like to ask you to reach out to me for a conversation. I am offering this service now to several young adults who are the children of affluent parents. I can tell you more about how we approach this.

More importantly, I might be able to offer your child the gift you really want to give them: knowing how to manage their wealth wisely without having to go through the school of hard knocks.


The information contained in this article is provided for informational purposes only. No illustration or content in it should be construed as a substitute for informed professional tax, legal, and/or financial advice.


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Michael Loizzi - view full bio

mia erickson

“I enjoy working with young professionals and helping them chart their course toward their financial future.  I also enjoy working with my colleagues on the Investment Committee to create solutions for our clients.”