The toughest conversations to have with your father may revolve around money.
But ignoring them altogether won’t help you or your family’s finances. If you’re wondering what key conversations you should have as you navigate life, experts shared a timeline for everything from financing student loans to talking about inheritance.
“The most important thing at any age is to open the conversation,” said Mitchell Kraus, founder at Capital Intelligence Associates, a financial advisory firm. “Talking about money is taboo in our culture and that can lead to the same money mistakes being made generation after generation.”
Any age: Why talk about money?
It’s never too late to establish transparency and a sense of trust when it comes to family financial matters.
“I’d start by asking Dad: ‘What is the biggest money mistake you ever made? What was the best?’” Kraus said.
Starting early can help foster confidence for future decisions, and if you have siblings, bring them into the conversation, Kraus said.
“I can’t tell you how many clients have terrible relationships with their siblings because one feels that mom and dad treated them better financially,” Kraus said.
You’ll also learn what’s important to your father and how money shapes that.
“It is my experience that many dads strive to provide for their children in such a way for them to enjoy a better life than they had for themselves,” said James Guarino, managing director at Baker Newman Noyes, a financial firm. “But in its most basic form, a dad’s goal is to impart a legacy to his children that might include a number of family principles/values.”
Ages 16 to 18: How will I finance college?
As you approach your high school graduation and look toward college, you should discuss not only your four-year plan with your father, but also how to finance your degree.
“Start with college costs as most middle to upper income parents do not have an appropriate ‘college cost’ discussion with kids,” said Catherine Valega, certified financial planner at Green Bee Advisory, a financial firm. Parents need to be “honest about how much they are willing to contribute to education, and what they will leave for the children to finance.”
Student loan debt has reached $1.54 million, according to the New York Federal Reserve’s Household Debt Report for Q1 2020. The average debt load per student was $35,620 in 2019, according to Experian.
“While loans may be available, even today, kids have no idea how that future debt will impact them,” Valega said. “There should be an open conversation with high schoolers.”
There are some parents who can afford to help financially support their children’s higher education, but are reluctant to do so because they believe their child will be more committed to their studies if they have to pay for it, said Matthew Gaffey, wealth director at Corbett Road Wealth Management.
“I have seen some of these parents put stipulations on the tuition they will cover,” he said. “For example, any class that you receive a grade lower than a B, you will be paying for.”
20s and 30s: Will dad (and mom) help pay for my wedding or house?
You can hit many life milestones in your 20s and the 30s, including marriage and buying a house. There is also a financial component to these, and you may seek out financial assistance from your dad (and mom).
“If you want your dad to save help pay for a wedding or the down payment on a house, you should start thinking about it sooner rather than later,” said Sean Pearson, a certified financial planner at Ameriprise Financial Services. “A dream without a plan is a wish.”
The average U.S. wedding costs more than $38,000, and the median home price is almost $249,000, according to Zillow. Pearson recommends the earlier you start the conversation, the better, so you can save regularly towards the goal.
“Thinking that you want to pay for a wedding or down payment without earmarking some money or saving regularly towards that goal will create a situation with either conflict or debt, neither of which is ideal,” Pearson said. “However, like any journey, planning now will help make any challenging financial decision easier.
35 and up: What will happen to your retirement accounts/inheritance?
As you become stable on your own, one of the areas to discuss with your father is retirement and inheritance.
“A huge discussion should be regarding estate planning and long-term care issues, such as how accounts are titled, beneficiary reviews, and how is Dad going to be cared for,” said Dennis Nolte, certified financial planner at Sea Coast Bank, a financial firm.
These conversations should occur in light of the recent rules to the CARES Act, which states that non-designated beneficiaries who inherit a retirement account have six years to distribute the account, if one of those years is 2020.
If you know your father is likely to hand down his retirement account, it’s important to have these sensitive finance conversations.
Experts acknowledge that the minute you decide to have the conversation, it gets easier afterwards.
“End-of-life discussions are not easy to initiate, but they are critical to communicate a person’s wishes and intentions,” said Michael Fuhr, founder of Evergreen Wealth Services. “There is no ‘perfect’ time to start a discussion [around] health, financial and legal information and wishes.”
Read more information and tips in our Family section