Nancy Graham November 4, 2020 Personal Wealth Talking About Family Wealth with the Kids When is the last time you had a heart-to-heart with your kids about money? I mean, an actual conversation, versus a lot of uncomfortable dancing around the subject? While talking about your family’s financials may not be at the top of the list of fun things to do on a Friday evening, there are at least three good reasons to carve out some time for it anyway. I covered these in a video last January. These days, there are two more reasons to add to the list: First, many of us are spending more time at home, so you may have more time to strengthen family bonds with overdue conversations. Second, 2020 has been a stressful year. Your kids may be worrying (or at least wondering) how the money’s holding out. You, in turn, may be wondering how any recent changes in your wealth may impact your family’s goals moving forward. You may be able to dial down the worry-o-meter a bit simply by talking about where you stand in a candid, caring manner. This year or any other, here are those three more reasons for talking to your kids about family wealth. 1. It’s in Your Children’s Best Interest To pave the way for your children’s eventual financial independence, the most important thing you can do is start talking to them about money matters early on … on two key fronts. First, there’s the practical information and tangible skills, such as how to: Open a bank account Apply for a loan Read the fine print Invest in sensible, low-cost index funds Understand when they are being sold something they don’t need Second, you want to connect financial practicalities with what really matters in your child’s life: Security, purpose, love, joy, and similar aspirations that money can facilitate, but can never buy outright. What does these conversations look like? Preferably, hold them regularly, as part of your family’s routines. Use your household’s real-life challenges, opportunities, and decision-making. if your kids are wondering how 2020 has impacted the household wealth, consider asking for their thoughts about the tradeoffs you’re considering. That way, they can learn to appreciate that spending and earning don’t happen in a magic parental bubble, and that the credit card bills need to be paid! 2. It’s in Your Household’s Best Interest Let’s face it, each of us probably has our own hang-ups about money, developed from our own childhoods. And we often put a great deal of pressure on ourselves to provide. If you give your child the space to question your financial choices – and you have the courage to listen – you may find yourself making better choices for all concerned. Sometimes, there’s nothing like the brutal honesty of a child, who has no preconceived notions, to uncover the flaws in our own thinking. 3. It’s in YOUR Best Interest By removing the elephant from the dining room (where most of my family’s money conversations have taken place), you’re creating an environment for a lifelong dialogue. In other words, while equipping your children with the financial literacy they’ll need to take care of themselves, you’re also equipping them with skills you may have to rely on later in life. After all, if you become unable to manage your finances, your children may be the ones stepping in for you. In the face of life’s greatest financial challenges, the earlier you’ve established open lines of communication among the generations, the easier it should be to figure things out – together. Isn’t that one of the main reasons you’re trying to build lasting wealth to begin with? Share: Facebook Twitter LinkedIn Email CIRO Advisor Report