Unedited Transcript:

Mark Struthers (00:07.15)

Welcome to the healthy and wealth retirement. name is Mark Struthers and I am your host. And today we’re talking about failure to launch. This is a based off of Lucy based off of Bloomberg article, maybe Bloomberg wealth. I work with them once in a while. Wasn’t involved in this article, but it was excellent. And I hit home because I have two teenage boys and I work a lot with parents and I work a lot with those that are entering retirement. So this article, the numbers are, are scary.

U S parents spend about 500 billion every year on their 18 to 34 year old children, which is double what they put towards their retirement. That’s a big number and the number itself is big, but obviously there’s some concerns just about having that generation. That’s not quite developing, you know, maybe like they should, who says how they should develop, but it’s a fact that retirement savings are suffering that if you have, you know, the tough part is, is that when you’re

kids are in their 20s, especially late 20s to early 30s, you are probably during retirement. And if you’re going through your 20s and spending more on your adult kids than you are retirement, as someone who wants everyone to have a healthy and wealthy retirement, that’s where I get concerns. More kids are living with their parents since the 1940s. And, know, as you probably guessed, the 1940s has had its own issues. How did we get here? Well, you could point a lot of fingers.

But student loan debt and affordable housing in the pandemic are three big ones. You know, those of you who had kids pretty much of any age, you could tell that the pandemic impacted almost all them. There are also cultures where helping your kids now is an investment in your future so they can, they can support you later on. I think this is something a little bit different, but you know, some, some folks do that. Some folks say, you know what? I’m foregoing them. My retirement savings is my kids.

I have two or three, four kids. I’m counting on it. It’s kind of like a venture capitalist. I’m going to throw some money and support here and all of them knowing one of them is going to make it well enough, make a big to support me. you know, in each culture has its own ways of it as a very open-minded financial planner. For me, it’s about helping them reach their goals and helping them make an informed decision. But this really, I don’t think is, is that so is.

Mark Struthers (02:29.11)

The only reason kids coming home financial, probably not. I think the pandemic had a lot to do with that just as far as the emotional and mental development. A year for a 14 year old is a lot bigger than a year for a 50 year old. So I think if you’re, if you’re delayed a year, like the pandemic, think that that could hurt. In the book failure to launch, why your 20 something hasn’t grown up and what to do about it. I spoke with much in the Bloomberg wealth article.

The author identifies three skills that kids need to have to succeed. One of them is finding a sense of purpose. Makes sense. Number two, developing administrative responsibilities. That is actually oddly enough is simple, fairly simple, but almost never done. And two, number three, which I like this one the best, it’s cultivating interdependence. The first one, you know, as you can see, it’s pretty obvious. You know, if we have a sense of purpose that helps us with motivation or developing habits.

It gives us a reason to wake up in the morning. That’s true with retirees. You know, it’s not just kid. It’s true with adults. For an adult, maybe less. So once you get your career going, you know, kids, you know, those are purpose enough. But I think for kids trying to find their footing, a sense of purpose or those in retirement, which maybe there’s some parallels there. Having a sense of purpose is critical. The last two might come as a surprise, but the administrative one, you know, really shouldn’t

teaching them how to do a budget. I know more of this has started schools, but their credit score teaching them to proactively address these things, get on top of them, live within their means, start to earn some money, start to save some money, how to pay bills, know, that, that how is a big one as well. You’re simply telling them, but if you actually have to show them, you know, and I, you know, I’ve, sometimes when folks will go by and go keep saying how, how, how, to where they might be trying to avoid just doing it.

But helping them down that path, at least a little way to say, this is how you do it. How do you get a good credit score? You can say you pay your bills on time. Show me how to do it. So showing the kids set up auto pay, but making sure there’s enough money in there each month or having them physically write a check, which I know boomers did that a lot still do. Gen Xers, I’m surprised how many actually write checks, but we need to do, but doing those things, giving them the base to show them what you need to do, why you’re doing it and how. the, the

Mark Struthers (04:53.258)

administrative stuff and including the credit score, have them open up, getting them lines of credit early, establishing a file early. And many adults really don’t know how the credit scores work, you know, learn, get some help. If you’re a Sona client, we’re very, very happy to help get them going down that path, you know, and then you start joining things like Roth IRAs or I bonds or whatever the case may be starting them down that path gives them the base to do it.

It’s odd that we will often spend so much time and money helping our kids get an A in chemistry and they could be an A student in AP chemistry or helping them make the varsity team in two sports with hundreds of hours of camps and of thousands of dollars. Yet we don’t teach them how to pay bills, how to have a budget, which on a relative basis is pretty easy. Even getting a feel for the credit score might take you some time to realize, to learn about credit utilization.

types of credits and so on. But you really do, it start fairly early getting the kids used to setting that up. And the interdependence I thought was a good one. All too often parents don’t have these talks with their kids. A lot of times parents don’t have spouses don’t have these talks with each other. But knowing that you’re all in this boat together, you’re, I’ll use a Minnesota golden gopher since they’re winning. They’re all rowing the boat together.

If one person in that boat is not rowing or rowing against you, you might not make it to shore retirement shore. I threw that little analogy together quickly. Forgive me if it’s not perfect, but many times child children don’t realize that kids need to know you need to stuff conversations early that what they do affects you. know, and for me too, I see this with a lot of parents. need even this. It’s not just the sometimes it’s not just the cost of travel, basketball, hockey, sports.

dance, whatever it is, it’s not just the cost of the parents and the time of the parents, which at the time parents are taking time away from work, it’s going to affect their future. And not to mention the money they’re spending, but also if you don’t get that scholarship. Now, again, part of being a good advisor is making sure you’re well balanced. There’s there’s always a cost and risk. You don’t want to be perfect financially and academically, but you know,

Mark Struthers (07:15.15)

but be miserable and have lost out on memories. need to return on memories as well as return your investment. But when, when a child is playing three sports and doing travel teams and doing all these things, it’s understandable where their ACT might not be a 32. Their weighted GPA might not be a 425. So making informed decisions that everyone knows that we’re in this boat together, we have a finite amount of time and resources. How are we going to allocate this as best we can?

And it does not have to be perfect, but the idea is that you make an effort here so that I think that interdependence will help get children. Even if it doesn’t click right away, I see us with my own boys. It might even be months or years down the road. All of a would they have a choice to make? Then it might hit them. Do I want to take this AP class? And one of my boys, do I want to take a summer class? I know how much this school costs. I know what this means.

And as a parent, think you kind of have to guide kids both ways to say, know, you might be taken on too much. Are you sure you’re you’re you sure you have the social life that you need? But the important thing is, is that you’re putting some thought together and it’s not just the kid. The kid doesn’t realize if you don’t teach the kid accounting or credit bureaus or you don’t expose them to the fact that their actions have consequences, not just for them, but for you as parents, you know, you just can’t expect them to all of sudden a switch to go on. And all of sudden they.

they know. So the biggest thing is one word plan. Planning, not just the numbers and scenarios. It means having these conversations with your child and spouse. And I say this as someone who’s been married for 20 years, spouses are not going to always be on the same page, but they should at least try to be reading from the same book. That means trying to have those conversations with each other. You you don’t want to get to when the kid’s 22 and wants to move home for several years. And one spouse says, yep, move right in.

And the other spouse says, you know, things aren’t going to be perfect, but you have a better chance for success if you start these conversations early. For boomers and Gen Xers, moving back home was a sign of failure. Now that’s changed for good and bad. The idea that a kid coming home, if it’s well planned out and sometimes things just happen, you know, life happens, but it’s, how we prepare before life happens and how we address life after that. That’s a

Mark Struthers (09:36.686)

Also, when there’s no plan, there’s usually fewer options. It’s like with college or retirement. If you’re forced to do something, then it comes out of nowhere. Your options are usually fewer and it usually costs more. So here, I know I’ve kind of alluded to this, but here are my list of things parents should do to help kids to launch. Create a budget for them while they’re at home. And this means that once they move home and no expensive cars, I think this was the article where they talked about a child who

was living at home, but driving like a 50, $60,000 car. You know, they get, is why you, you need to attempt to get on top of these things early, communicate with the children when they move home, communicate pre-teens, establish boundaries, let them know what to expect as teens too. Let them know what college costs. If you tell a child and they’re not going to fully understand, especially when you’re trying to, when you’re a teenager, trying to picture something in the future.

But if you give them an idea of what college costs, what life’s going to be after college, and you at least get them thinking, it does start to have an effect as far as their choices. What schools they look at, what majors they choose. Our podcast and DTube channel is just getting started, so I don’t think we’ll get a lot of hate mail, but honestly, this might scare some kids moving away from liberal arts degrees. There’s nothing wrong with the liberal arts degree. And maybe with AI, more more companies are going to want folks who

have that background really leads to a higher emotional EQ, emotional intelligence. But if you have these conversations, it’s going to set them up to make better decisions and have a better chance of success. And also show them how it’s impacting you. If they are trying to get into a certain school and they want you to pay for it, tell them we, we might have to work an extra two or three years teaching the kids to fish the admin stuff, the checkbook, the credit book.

And for a sense of purpose, think about guide, encouraging, helping them find a path forward and explore all options. Don’t be too close minded based on what other people think. Trade schools come to mind for this. Make sure you are thinking outside the box. Get out of your comfort zone as far as thinking the way things should be. You need to think about where things are. The child’s having trouble. Maybe they dropped out of school. OK, what do we do to move forward so they can get to independence?

Mark Struthers (11:55.33)

And how does that impact me? And that means everyone’s involved. Lastly, don’t, don’t be so hard on yourself. All parents make mistakes. You can do everything right. And things still don’t work out. Focus is on the positives, the resources you have. Now try to put the past, learn from the past, but put the past behind you and say, what do we have? Where do we want to go? And how do we, how do we get there? So I think if you’re trying to make the most of your journey, your child’s going to be happier.

And you’re probably going to have a healthier, a wealthier and a happier retirement. Don’t forget to hit subscribe there. Hit it. Hit it.