Grown-Up Money

Jonathan Clements

HUMBLEDOLLAR ISN’T the financial website for everybody. Instead, it’s the place that folks end up after they have made their fair share of youthful financial mistakes—and they’re ready to settle down and get serious about money. I even briefly toyed with adding a tagline to the site: “Where Money Grows Up.”

What does grown-up money look like? It’s less about the size of your nest egg—and more about attitude. Here are 21 signs you’re a HumbleDollar reader:

  1. When your neighbors show off their remodeled kitchen, you stare in terror and try to imagine how much it cost.
  2. The word “annuity” makes you twitch.
  3. When friends tell you about the great lease terms on their new car, you immediately assume they couldn’t afford to buy.
  4. You’d rather spend an evening with Jack Bogle than Peter Lynch (and, yes, you know who both of them are).
  5. When your niece mentions how much credit card debt she has, you suddenly feel the need to sit down.
  6. When friends boast that they save 10% of their income every year, you think, “Is that all?”
  7. When you worry about money, it’s about whether you’ve become too good at delaying gratification.
  8. If someone mentions cash-value life insurance, you instinctively reach for your wallet—to make sure it’s still there.
  9. When your brother-in-law talks about the hot tech stock he just bought, you try not to slap him.
  10. You suspect your heirs will be pleasantly surprised.
  11. When you hear about your cousin’s great vacations, wonderful home and European sedan, you just know your bank balance is bigger.
  12. CNBC makes you laugh almost as much as Comedy Central.
  13. When you read about the lavish lifestyle of some rich dude, you wonder whether all that money really makes him happy.
  14. You have this nagging feeling you could have got it cheaper elsewhere.
  15. When friends say they beat the market, you assume either they’re lying—or they don’t know the truth.
  16. The prospect of paying more than 0.2% a year for a mutual fund triggers an existential crisis.
  17. When the family takes off on a Saturday morning for the shopping mall, you just know it isn’t going to end well.
  18. When your neighbors mention the great guy they use at Merrill Lynch, you take deep breaths to calm yourself.
  19. Like everybody else, you have no idea where the market is headed. But unlike everybody else, you know you don’t know.
  20. You’re no longer capable of an impulse purchase.
  21. When your colleague announces she signed up for the 401(k), you offer a hearty “congratulations”—and silently wonder what the hell took so long.

And How About Them Kids?

MONEY MAY NOT BE the root of all evil, but it does seem to be the source of much stress. A therapist once told me it was the No. 1 reason that couples came to see her. Today, fewer Americans express satisfaction with their financial situation than they did in the early 1970s—despite living more than twice as well. The Federal Reserve found 44% of American adults either couldn’t handle a $400 financial emergency or would cover it by going into debt or selling household possessions.

Much of this angst could be avoided with just a handful of simple financial steps. Suppose you’re the parent of young adults in their 20s. What would it cost to set them on the right financial path, so one day they, too, will be HumbleDollar readers?

It is, alas, not nearly as cheap as I had hoped—which may explain why so many Americans lead lives dogged by money worries. Consider the price tag on six key financial steps:

1. Build up an emergency fund. You might open a high-yield savings account for your kids and add $250 every month, with perhaps both you and your children chipping in. The monthly sum is arbitrary, but the idea behind it isn’t: You want your adult children to have enough set aside to muddle through at least a few months. That’ll provide a modest safety net—and, I suspect, significantly reduce your children’s day-to-day money worries.

2. Pay off credit card debt. Among older college students who carry credit cards, the average balance is some $1,100, according to a 2016 study. Got kids who accumulated card debt during their college years? You might help them pay it off.

3. Stash $250 every month in a Roth IRA. While debt can be depressing, saving money is uplifting: It gives you hope the future will be brighter.

A Roth is a great investment vehicle for those in their 20s, thanks to the decades of tax-free growth they’ll enjoy. True, they won’t get the initial tax deduction that traditional retirement accounts offer. But for those in their 20s on relatively low salaries, that tax deduction probably isn’t worth all that much.

An added bonus: Roth contributions can be withdrawn at any time, with no taxes or penalties owed, as long as you don’t touch the account’s investment gains. That means the Roth could supplement your children’s emergency fund.

4. Purchase health insurance. You may have the option of keeping your adult children on your employer’s health plan until they turn age 26. If not, consider helping them buy coverage on their own. In their 20s, this will be relatively inexpensive—perhaps $300 a month, depending on how competitive the local insurance market is, and maybe even lower if your adult children qualify for a tax credit.

Make no mistake: The potential downside of skipping coverage is huge. Indeed, as a parent, helping to pay for your adult children’s health insurance ranks as financial self-defense. If they need major medical care and don’t have coverage, you will undoubtedly ride to the rescue—and it will likely cost you dearly.

5. Buy $250,000 in term life insurance. If someone doesn’t have a spouse or children, this probably isn’t necessary. But for those in their 20s, the insurance would be cheap, perhaps $330 a year. Want to turn your adult children into buyers of term insurance—and steer them away from costly cash-value life insurance? That $330 might be a small price to pay.

6. Get a will. Your adult children may have relatively few assets, so this might also seem unnecessary. Still, wills are cheap:’s starting price is $69 and is $59.99. Once your adult children have a will, it will become part of their financial mindset—and there’s a decent chance they’ll update it regularly.

To be sure, there are other potential steps you might take, like subsidizing your adult children’s 401(k) contributions—assuming they have access to one—or helping them buy disability insurance. But you’ll likely find the above six steps already carry too steep a price tag. Add them all up and the first-year cost might be $11,000.

What if you cut the six steps down to three—and focus on building up your children’s emergency fund, paying off credit card debt and purchasing health insurance? Even that could potentially cost almost $8,000. If you can swing it, it would make a great graduation gift. What if you can’t? If you have sound financial advice to offer, that could be just as valuable.

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