As with helping a child learn to walk and talk, we can help children gain the tools and knowledge necessary to become financially independent adults.

Early discussions about wants versus needs, as well as earning and saving their own money at a young age will give children the foundation for independence when they are older.

Yet parents may have to provide financial assistance to their children long after college graduation due to increased student loan debt and a competitive entry- job market. Below are some tips to help your adult children become self-sufficient.

Help Them Create a Budget

Ideally, a young adult will have had some experience budgeting through high school or college. If you plan to pay an allowance while they are young, it is helpful for them to be involved in calculating a realistic amount. It will force them to reflect on reasonable expenses, frequency of expenses and the profile of healthy spending (e.g. 50%needs/30%wants/ 20%savings). Popular budget apps for today’s young adult abound and include Mint.com, Wally, YNAB and Home Budget with Sync.

Explain Paychecks And Taxes

Review tax basics and the components of their paycheck. What and how much is being withheld from pay? What information do they need to file their taxes and which expenses may be tax deductible?

Balance the Books

Teach them to balance their checking account regularly. This will help them understand inflows and outflows and can also help identify any extra fees and charges that may be avoided. Using the bank’s website or an online budgeting program can help.

Privacy is Paramount

Stress that keeping financial information private and protected is extremely important. The growing incidences of financial fraud and identity theft make it essential that passwords and account numbers are safeguarded.

Healthcare and Insurance

Assist them in navigating their healthcare options and, if they have their own children, ensure that they have adequate life and disability insurance.

Savings and Emergency Funds

Drive home the importance of saving. It is vital that they establish an emergency fund to cover the unexpected. Ideally they should set aside up to six months of typical monthly expenses.

It’s Never Too Early to Create Goals

Discuss building a nest egg for long-term goals, such as buying a home and retirement. Encourage participation in any employer sponsored retirement plans through automatic payroll deductions, however small the amount. They won’t even miss the money! If they are financially able, starting an IRA or Roth IRA when they are young can be a very powerful savings tool.

The Importance of Credit

Help them to understand and establish their own credit. Credit is an important factor when applying for an apartment or car lease and even when applying for insurance. Disciplined use of credit (paying their credit card bill on time and in full) is critical to their financial future. A good website to learn more about and compare credit cards is www.creditcards.com.

The Real Cost of Debt

Explain the cost of debt. While it’s expected that one will take a loan to purchase an appreciating asset (like a house), it is less advantageous to incur a loan on a depreciating asset. Help establish a game plan for repaying any outstanding debt, such as student loans.

A Home of Their Own

Outline the benefits and costs of homeownership. They may need a primer on how a down payment and mortgage work, as well as the true costs of owning a home.

Set Boundaries to Encourage Self-Sufficiency

Emergencies happen. It is ok to be a safety net when your child faces an unexpected financial hardship, but be clear on the terms of the assistance. Is this a loan or a gift? If a loan, outline the repayment term and interest rate. Strive to create situations in which they have some “skin in the game” so incentives are well placed.

Be Transparent About Intentions

Discuss a plan for their independence, reinforcing that they cannot remain under your financial umbrella forever. Talk over how long it makes sense for them to remain on your insurance policies or mobile phone plan.<

Once the basics are in place, let your adult children know that you remain a financial sounding board for them and will provide financial advice when needed. Then sit back and watch them travel the road to financial independence!