Supporting Your Children Through Life’s Milestones

Whether it’s starting a career, planning a wedding or welcoming a new baby, milestones in early adulthood are often accompanied by major financial decisions. While it’s natural to want to help your adult children, it’s essential your generosity does not compromise your own financial security, especially as you plan for retirement. Here are some thoughtful ways you can support your family without sacrificing your own long-term goals.

When Your Child Enters Adulthood 

The financial impact of your child’s choices following high school can vary greatly. Here are some ways you can help while limiting the impact of those decisions on your finances.

• If they remain nearby for work or education, consider supporting their savings by offering space at home – either rent-free, at a reduced rate or in exchange for regular household responsibilities. If they decide to go out on their own, sit down with them to establish a clear lifestyle budget that’s within their means. 
• If you do want to support them financially, consider offering well-defined assistance rather than indefinite and ongoing payments – having a fixed amount and an end-date makes it easier to set limits. There are many ways to help, including funding a study-abroad program, an internship opportunity or a down payment on a vehicle.
• Co-signing loans is also a possibility, but be aware that doing so can put your credit at risk – this option might be best suited for young adults who have already demonstrated good financial habits. By co-signing a loan, your child could be approved more easily, receive lower interest rates or have better terms, like a lower down payment. Make sure to set clear expectations regarding timely repayments and financial responsibility for the loan.
• Adding your child as an authorized user on your credit card may help them build credit, but if you or they use the card unwisely, the credit scores for both of you could be negatively impacted. Remember, even if they are an authorized user on your card, you are responsible for paying any charges. Be aware that lost or stolen cards could also impact your credit.

Consider doing regular financial check-ins with your child and your Baird Financial Advisor for joint family budget planning. This can reduce misunderstandings and even align financial goals across generations.

When Your Child Is Getting Married 

Whether your child dreams of a simple ceremony or an extravagant celebration, remember that how much you contribute financially is entirely up to you.

• Set a firm budget early on regarding how much you can comfortably afford without dipping into retirement accounts. No matter how you decide to give, talk it through so everyone knows what to expect and you can keep your own finances on track. 
• A trust can also be used to cover major life events like your child’s wedding. You can set clear minimums and maximums for those expenses in the trust that ensure funds are allocated thoughtfully.

If you decide to help with wedding costs, consider using the annual gift tax exclusion (up to $19,000 per person in 2026) to avoid tax complications.

When You’re Expecting Grandchildren 

Welcoming grandchildren is an exciting milestone, but it’s important to balance generosity with your own financial security. There are many ways to show love and support without making ongoing financial commitments. 

• Offer time instead of money. Babysitting for a night out or even watching the kids for a few days per week can significantly reduce childcare costs for the parents and give them a much-needed break. Clearly communicate the value of this exchange.
• Consider one-time gifts over recurring support. Helping with baby essentials or a nursery setup is safer than committing to ongoing expenses that could erode your retirement savings. 
• Create a small fund for annual traditions that apply to your grandchildren, such as holiday gatherings, birthday celebrations or family vacations. Planning in this way lets you budget accordingly while creating an experience the whole family can enjoy and appreciate.
• Consider contributing to a 529 college savings plan or funding educational experiences. These options allow you to invest in your grandchild’s success without creating financial pressure during your retirement years. 

One of the most helpful ways to support your kids financially is to ensure you’ve fully funded your own future – including housing and healthcare for all seasons of retirement – so you’re not relying on them for support.

Helping your loved ones through life’s big moments can be rewarding, but it shouldn’t come at the expense of your retirement. Your Baird Financial Advisor can help you set clear boundaries and explore options to find the right balance between generosity and security.

This information has been developed by a member of Baird Wealth Solutions Group, a team of wealth management specialists who provide support to Baird Financial Advisor teams. The information offered is provided to you for informational purposes only. Robert W. Baird & Co. Incorporated is not a legal or tax services provider and you are strongly encouraged to seek the advice of the appropriate professional advisors before taking any action. The information reflected on this page are Baird expert opinions today and are subject to change. The information provided here has not taken into consideration the investment goals or needs of any specific investor and investors should not make any investment decisions based solely on this information. Past performance is not a guarantee of future results. All investments have some level of risk, and investors have different time horizons, goals and risk tolerances, so speak to your Baird Financial Advisor before taking action.