Guiding Young Adults into Financial Planning and Investment Management

Written by Ashley Scher, CFP™

Numerous times throughout my career, I’ve had the unique experience of watching parents grapple with the questions of when and how to involve their young adult children in wealth and investment planning conversations. This is often a layered topic because on one hand, it involves general financial literacy education, and on the other hand, it relates directly back to the parents and their own estate and legacy planning considerations. Often, they have planned carefully for years to ensure there will be an inheritance to leave for their children, but they may not want to fully disclose their own financial position, or they aren’t sure if the child(ren) are mature enough to understand the complexity of the planning required. This is particularly true for high-net-worth families or those with cross-border considerations. This can lead to procrastination (sometimes for years) because they can’t settle on the right time or how much to share.

While decisions about involving children in estate planning conversations is nuanced, the education piece is much more straightforward. Parents can, and should, endeavour to begin introducing basic financial and investment planning topics throughout childhood in simple ways (i.e., providing them with a small allowance or pocket money to ration over a period of time, or teaching them to set aside a small portion for a “rainy day”). By the time they are young adults, it is imperative to introduce basic budgeting, planning, and investment basics to provide them with a foundational understanding before they leave home. It is not just about teaching them how to save or invest, it’s about equipping them with the mindset and tools to make confident, informed decisions throughout their lives.

Why Start Early?

• Compounding power: The earlier young adults begin investing, the more time their money has to grow. Even small contributions can snowball into significant wealth over decades.
• Financial literacy: Early exposure builds confidence in handling money, reducing the likelihood of costly mistakes later.
• Responsibility and independence: Financial planning encourages accountability and helps young adults transition smoothly into adulthood.

Below are some key concepts you may consider introducing to your child:

1. Budgeting and Cash Flow

• Teach the importance of tracking income and expenses.
• Encourage the “pay yourself first” principle, saving before spending. A general guide is to encourage them to save at least 10% if cash flow permits.
• If appropriate, consider introducing digital tools or apps that make budgeting intuitive.

2. Emergency Funds

• Stress the need for a safety net of 3–6 months of living expenses.
• Position it as financial independence insurance, not just a rainy-day fund.

3. Debt Management

• Explain the difference between “good debt” (student loans, mortgages) and “bad debt” (high-interest credit cards).
• Show how interest rates impact repayment timelines and overall cost.
• Ensure that they are not given access to a credit card without understanding this concept.  Debit cards can be a useful interim step to provide more autonomy while still ensuring they are not spending more than they have available.

4. Investing Basics

• Introduce the concept of risk and return.
• Explain diversification and why “not putting all eggs in one basket” matters.
• Discuss long-term vehicles like retirement accounts like 401(k)s, IRAs, and pensions as well as more accessible investment vehicles like brokerage accounts.
• Consider inviting your child to join you for a meeting with your financial advisor or help arrange for a separate session where they can get some basic education direct from a financial professional.
• Explain the importance of getting qualified advice.  With social media and the reach of influencers, it is imperative that they understand that such individuals are not licensed and are often paid for the products or services they represent. Getting qualified advice is paramount, particularly if your family has cross-border needs.

5. Goal Setting

• Encourage them to set clear short, medium, and long term financial goals.
• Connect investments to life aspirations such as travel, homeownership, entrepreneurship.

Practical Strategies for Parents

• Lead by example: Share your own financial journey, including mistakes and lessons learned.
• Start small: Consider gifting a modest investment account and reviewing statements together.
• Encourage autonomy: Allow them to make decisions, even if imperfect, to build confidence.
• Use professional guidance: A qualified financial advisor can provide structured education and help avoid misinformation from social media or peers.

The Long-Term Payoff

By introducing financial planning early, parents empower their children to:

• Build resilience against financial stress.
• Develop healthy money habits.
• Approach adulthood with confidence and clarity.

Financial planning is not just about numbers, it’s about values, discipline, and vision. When young adults learn to align their financial decisions with their life goals, they set themselves on a path toward lasting independence and success.

Moreover, by starting to educate your child early, they will be more equipped to handle more complex matters at an earlier age.  This may also aid in broader family estate planning conversations.

The Legal Stuff

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