Three Must Have Conversations with Your Adult Children
Why structure, timing, and habits matter more than perfection.
As a recent college grad, I remember not feeling fully prepared for all the financial decisions that come with leaving home and going to college. Topics such as credit cards and student loans were rarely discussed in my home growing up. It was in my first semester that I realized how many of my peers and young adults feel unready when these responsibilities do arrive.
Choosing to major in finance pushed me to develop a clearer understanding of how financial decisions can shape long-term outcomes. My major made me realize how valuable it is to have early conversations about money. Looking back, there are three main financial topics I wish my parents had discussed with me before I entered adulthood. As your children graduate from high school and step into independence, financial decisions tend to arise sooner than expected. Have these conversations early. They don’t need to be complicated just timely.
Learning How Credit Works
For many young adults, credit cards are the first real financial tool they are given. Unlike many other financial decisions, credit cards generate an immediate feedback loop. Balances are updated monthly, interest charges accrue, and credit scores respond quickly to repayment behavior.
The main idea to communicate about credit cards is that they are beneficial when used as a payment vehicle, not a borrowing mechanism. Points and rewards can be beneficial, but only when the balance is paid in full.
Carrying a credit card balance is common. A Federal Reserve study found that in 2024, 46% of credit card holders reported carrying a balance at least once in the past 12 months (FRB). Credit cards can be a tool for the disciplined person, but once a balance begins to accrue, they quickly become a liability rather than a benefit.
With credit cards being the first short-term financial resource made available to young adults, student loans are often the first long-term commitment. The conversation about student loans is much less about day-to-day discipline and more about understanding the structure, vast range of options, and trade-offs.
The Student Loan Timeline
Not all higher education funding is the same. There are several “free” money options, such as scholarships and grants, that can substantially reduce the financial burden of higher education. In many cases, there are state-sponsored programs that require only a bit more than an application or a short essay to be considered. In fact, a recent analysis done by the National College Attainment Network (NCAN) found that high school graduates left an estimated $4.4 billion in unclaimed Pell Grant aid simply by not fully completing the FAFSA form in the 2024 cycle.
Although many student loans are structured with 10-year repayment schedules, in reality, they stick around much longer. Research from Education Data (ED) shows that the average borrower takes closer to 20 years to completely repay student loan debt. Due to this extended timeline, student loans often overlap with other major financial milestones, such as investing, starting a family, taking on a mortgage, and career changes.
Student loans are a calculated sacrifice. Borrowers accept short-term financial obligations in exchange for higher future earnings. Understanding and explaining the structure of large commitments, such as student loans, can help families make more informed decisions and avoid unintended consequences further down the line.
Taming Lifestyle Creep
The final challenge many young adults face is lifestyle creep. This typically occurs when young adults finish school and start earning what feels like “real” money. As the real money comes in, so do the fixed costs. Things like rent, car payments, subscriptions, insurance, and recurring bills quickly become a monthly routine. Individually, these bills don’t seem like much, but together they can quickly become overwhelming.
Lifestyle creep isn’t about occasional spending or budgeting; it's about how a raise or promotion can result in increased monthly obligations. Social pressure plays a big role as peers upgrade their housing, vehicles, and everyday conveniences, enticing others to do the same. As time passes, these monthly obligations become harder to unwind than discretionary spending, ultimately eating away at cash flow. Maintaining healthy cash flow as income increases is critical, as it can affect how one feels during career changes, recessions, or a market downturn.
This is the stage at which long-term financial flexibility is either earned or given up. These early-life decisions affect cash flow for years thereafter and, in turn, shape the ability to save consistently, invest, and respond to life changes. In many cases, we see that financial freedom later in life is shaped less by future income and more by being intentional with spending as income increases.
These talks do not need to happen all at once and do not require perfect execution. What is most important is knowing when these decisions arise and being prepared to talk with your kids about them. Like investing, decisions compound over time, and the earlier the right decisions are made, the easier it is to reach financial flexibility. From my own experience, having these conversations early and taking a proactive approach can help build strong habits and establish a strong financial foundation.
For parents, it can begin with simple, open-ended questions to encourage discussion, such as:
- “What financial goals feel most important to you right now?”
- “Do you understand how your credit card works and when balances should be paid?”
- “How often are you reviewing your paystubs or bank account?”
These conversations do not have to be elaborate; they just need to start early.
~ Ricardo Salinas
Sources
Federal Reserve Board, Report on the Economic Well-Being of U.S. Households in 2024 (published May 2025)
National College Attainment Network, FAFSA Completion & Pell Grant Analysis (2024)
Education Data Initiative, Average Time to Repay Student Loans (updated July 15, 2025)