Navigating Finances With Adult Children
From the Orange Couch

Phil:

Welcome to this segment of From the Orange Couch. I’m Phil Tull. I’m here with Robin Tull, and this is where we unpack questions from clients, as well as maybe some different circumstances or things that we see on a daily basis as advisors.

And in the true segment, we are father and son. We’re going to be unpacking today how to navigate adult children and finances. How to balance and walk that line of helping, but also caring for yourself.

Phil:

The analogy that we really like on this topic is, if you’ve ever flown before, you know to put your own oxygen mask on before you help someone else, right? How does that apply from a financial take, Robin?

Robin:

I think it’s a great analogy. I really do. I’ve got four kids. When they were young, they would fall down and scrape their knees. I wanted to help them and comfort them.

But when they become adults, it changes a little to being more coaching in that case. And I think your analogy of taking care of yourself first financially, and then there might be opportunities to help that adult child.

Phil:

Why do you see that adult children underestimate how much their parents need?

Robin:

I think they see a number that may have been accumulated over many, many years, and they go, “Mom and Dad, they’ll never spend that kind of money.”

But they don’t think about what those expenses might really be 20 or 25 years down the road. You think of health care, long-term care, medical care, and housing—all of those things can come into play.

We just had somebody today who was planning for long-term care at 80 years old. That’s money that has to be set aside. That’s their financial security.

I just don’t think sometimes that the adult child knows or understands those numbers. I sometimes say, “It’s not about the number. It’s about a calendar.”

If they’ve got 20 or 25 years left and they’ve stopped working, the adult child can still go back to work.

Phil:

If your adult children, for one reason or another, know how much money you have, maybe invite them into a meeting or at least have the conversation at home about how much it costs for you to live and what medical costs you may be accounting for.

As you referenced in today’s meeting, they may not realize how much long-term care costs are. If you help bring that perspective, I think that’s super helpful.

Phil:

How do you handle it when adult children have that direct ask to their parent?

Robin:

Yeah, that’s a really difficult one. I like to say sometimes, “Let me be the villain in this case,” because you have to have a plan, and you want to make sure that plan stays securely in place for you.

It may be a one-time thing, but if it becomes a regular habit where Mom and Dad’s checkbook always bails out that particular problem, then we have to look at that.

You don’t want to jeopardize the security of the parent.

Phil:

It’s a good point, and “keep it unexpected” is probably another way to put it.

I know Warren Buffett talks on this topic. He puts it in a way of helping your adult children so they can do anything, but not everything.

Phil:

I think that’s important—instilling character and finding that balance. Do you have any tips?

Robin:

When I was in high school, I drove a truck in a lumberyard. I carried sheetrock. I worked at a furniture factory in the heat, where you had to take salt tablets in the afternoon.

Those things made me want to go back to school, work hard, and have a career.

And I think the same thing applies to you and my other kids. I tried to do the same thing. There has to be that incentive and that fine balance.

You can help, but you don’t want to help in a way that removes their incentive to go to work or do something for themselves.

Phil:

Yeah. Instilling that character is so important, and I’ve had that conversation with a lot of clients. They want to find that balance.

You all did that well for us. You encouraged me to go into construction, getting up at 5:00 in the morning and working with concrete.

Those weren’t fun days. I found some joy in them, and they taught me a lot. Through high school and college, I remember one of the guys on the job site telling me, “Go get an education.”

It was good to set that foundation of hard work and instill those good traits.

Phil:

In terms of the loss of a spouse, I know Amy navigates this a lot and helps people go through it.

It’s a big life change. There’s a term, “newly single,” that we use, and it’s a big life change on many fronts—one of them being financially.

A lot of times, income is reduced. A second source of income, such as a pension or Social Security, may be reduced. Taxes will often go up because you go from married filing jointly to filing as a single person.

Phil:

Any tips for those who are newly single?

Robin:

I think that’s the hardest situation because there’s only one spouse, and you don’t have the other spouse to bounce ideas off or to say no.

It’s one of the hardest things I see. It’s very difficult. I often tell them, “Use me as the scapegoat.”

You have a plan in place. The plan is for the next 20, 25, or 30 years—whatever that life expectancy is. The plan is possibly for long-term care and health care.

Robin:

The second thing, besides having a plan, is maybe having a budget for gifting to children. That’s an easy thing to do.

The third thing is to bring your financial advisor into the conversation. It’s so important.

It makes it easier, especially for a widow or widower, to simply say, “My financial advisor said it doesn’t really fit into the plan. I’m sorry.”

You’re not being selfish. You’re really not. You’re just making sure you’re financially secure, and that’s the most important thing.

You don’t want to become dependent on that child.

Phil:

Yeah. Any closing tips for us?

Robin:

Yeah. I go back to that analogy, Phil, of making sure your mask is on first—your financial mask is on first—and having that plan of action.

Then there are going to be opportunities to give. There’s nothing wrong with gifting to children. There really isn’t.

Just make sure it fits into your overall plan and that your financial security is actually secure, if I can say it that way.

Phil:

I think that’s one of the most loving things you can possibly do for your loved ones: make sure that you’re taken care of and that you’re not a burden.

That’s a very caring and considerate thing to do for your loved ones and your family.

Thank you so much for joining us today on From the Orange Couch. Whether you’re newly single and need help navigating what life looks like now, or you’re interested in a family meeting, I’d welcome the opportunity to have that conversation with you.

Please reach out to your representative here at Tull Financial Group, and take care.