AFL’s Joanne Reilly, Ameriprise

–  Millennials are navigating a tough job market and a post-recession economy

–  Financially supporting adult children could deprive them of “teachable moments”

–  Sharing your experiences is an invaluable way to teach fiscal responsibility

You probably talked to your kids about money when they were younger — saving, spending and everything in between. But what about when they are grown and out in the world on their own? You know from your experience that money decisions made early in life can have a lasting impact on finances. But, it can be tough to balance providing ongoing financial support with letting them find their way.

Christine Romans, CNN Chief Business Correspondent and author of Smart Is the New Rich: Money Guide for Millennials, offers tips for three important conversations parents should have with their adult children.

1. Saving money whenever possible

Romans says people should spend only 85% of every dollar they make, but that goal can be more complicated for young people unable to set anything aside from their early-career income. This is especially common in areas such as the Northeast or Silicon Valley, where the cost of living is higher than the national average.

Romans suggests that you refrain from giving direct advice or unlimited financial support. Instead, share how you saved money on day-to-day expenses when you were their age. “Since no one wants a lecture, it can be very effective to discuss your finances with your adult children,” she says.

Another option Romans has seen work: Since housing is usually the largest expense in a budget, you could invite a child living in a high-rent area to move home with a two-year contract, including an “out clause” at the end of year one (for either party). Consider asking your child to hand 10% of each paycheck over to you to be set aside for an apartment deposit or home down payment.

2. Avoiding debt and paying down balances

Here’s a sobering statistic: Recent college graduates have an average of $29,400 in student debt, with a median monthly student loan payment of $351.¹

Even if you were able to provide financial support for a child’s education, there’s still the looming specter of consumer debt. Forty-four percent of Millennials have either missed a credit card payment, exceeded their credit limit or had to work out a payment plan with a credit card issuer² — all of which can negatively impact credit ratings.

Those debts can also take a long time to pay off, delaying saving and investing. While it can be tempting to pay off a child’s credit card balance, they won’t learn as much from the experience if you do. One alternative is to offer them a loan to pay off outstanding debt, with a monthly auto-pay set up from their account to yours. Removing the burden of credit card interest allows them to pay the debt down more quickly without jeopardizing the valuable lesson that comes with spending more than they’ve earned.

“Since no one wants a lecture, it can be very effective to discuss your finances with adult children.”

— Christine Romans, CNN Chief Business Correspondent

3. Starting a retirement fund early

Romans recommends talking with your adult children about your investments and encouraging them to begin saving and investing by age 25. This can be another challenging discussion, as retirement seems a long way off for a 20-something.

One way to open the dialogue is to talk about the choices that your parents made as they saved for retirement and how it affects their lifestyle today. You can then share your financial situation and goals for the future. This serves two purposes: Telling your adult children what they need to know about your plans and wishes, and helping them learn from your successes and mistakes.

Your financial advisor can also recommend ways to help your adult children learn fiscal responsibility without enabling them. This could include gifting simpler investments for them to manage or bringing them along to a meeting with your advisor.

If you struggle with knowing when it’s appropriate to provide financial support, consider that helping your grown children too much may actually hurt them. How? By depriving them of valuable money lessons that could help them in the long run — and that they can also pass on to their kids.

While you may feel you are being too tough on them at times, remember that the more reality checks they get while young, the more likely they are to enjoy financial success later.