Talk to your children about money
It may be the most important thing you do with your inheritance.听
A child鈥檚 understanding of earning, spending, borrowing, saving and sharing money typically varies based on their values, and most of the time those values are learned in the home from family members. Consistent, honest and open conversation is the key to letting children know that their family is financially fortunate. It鈥檚 also a powerful opportunity for family to share what it took to create and build that wealth and how they play an important part in safeguarding it.
A child鈥檚 understanding of earning, spending, borrowing, saving and sharing money typically varies based on their values, and most of the time those values are learned in the home from family members. Consistent, honest and open conversation is the key to letting children know that their family is financially fortunate. It鈥檚 also a powerful opportunity for family to share what it took to create and build that wealth and how they play an important part in safeguarding it.
Know when to begin
Parents who take the initiative in teaching their children about money and encourage their active involvement at a young age make financial matters seem less intimidating.
Providing the knowledge and a framework for dealing with future financial issues will give them the means to preserve and steward the wealth they earn or inherit. That鈥檚 why it is important for them to understand:
- How the family鈥檚 wealth was created
- Why they should not take wealth for granted
- The significance of working and earning
- What it means to give through volunteering or by donating to a favorite cause
There鈥檚 a lot of hesitation to communicate with children about wealth. Take advantage of financial education resources. It鈥檚 worth having those conversations as early as possible.
Senior Wealth Strategist
蜜豆视频 Advanced Planning Group
Talk about what鈥檚 important in the family
Children鈥檚 attitudes toward money will鈥攆or the most part鈥攂e shaped by their parents and family members. Understanding money and wealth is a lifelong learning process and good money management skills can provide a foundation for happiness, stability and independence.
But beyond solid financial literacy, children can come to understand why passing on wealth is much more than simply passing along assets. They can gain an appreciation for their family鈥檚 sense of purpose, learn how to be accountable and see that they can carry on their family鈥檚 legacy as they chart their own paths in life.
It all starts with a family鈥檚 positive examples. That鈥檚 why it鈥檚 vital that parents and family members share what is most important: what are their stories, lessons and lifelong influences鈥攁nd how can those influences be a part of their children鈥檚 lives, too?
The longer you wait, the harder it is
Of course, it鈥檚 never too late to talk. But many parents are waiting for just the 鈥渞ight moment鈥 and maturity level to talk to their children about money. But that perfect time may never come. The older the child gets, the harder it may be to influence perceptions and values around wealth.
Talking openly not only teaches children about money but also how to better communicate about their finances, which can go a long way to helping prevent future difficulties. As they grow into adulthood and understand that they have a variety of resources for asking questions, they are more likely to seek out advice.
Teaching the next generation about money and guiding their values can give them the skills to deal with the benefits and burdens of wealth. This is an important part of a child鈥檚 life鈥攁nd it may be the most valuable inheritance a parent can provide.
Read the white paper by聽Casey Verst, Senior Wealth Strategist, 蜜豆视频 Advanced Planning Group:聽Teaching children about moneyDownload PDF
, a publication of the Advanced Planing Group.
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