What You Can Do when the ‘M’ in ‘Family’ is Money

How do I tell my kids about our wealth in a way that keeps us connected as a family and not just connected as a ‘bank?’ is a question I have been asked several times recently.

Because the age and financial maturity of your kids is varied, I want to introduce you to a few parameters that will shed some clarity.

Generally speaking, there is a framework that applies to various age groups. In a nutshell:

  • Preteens:  They see the lifestyle they are raised in. They think this lifestyle is the norm.  Being told one thing while experiencing another is difficult to understand.  Not having a way to talk about money that makes sense to them is difficult for them.  Having them mirror your desired use of money at the grocery store or when buying clothes is a great way for them to see money well used. Having conversations about limits to money for you as well as them is a valuable tool to use. Exposing them to the effects of money in their lives is yet another tool to implement.
  • Teens: They are feeling the pressure to lead or join peer groups so the sense of belonging can tug at their purse strings. Impressing, showing off, isolating themselves in expensive hobbies can be a deterrent to financial literacy. Introduce a sense of responsibility with money that they can relate to that also relates to the general family values around money.
  • Young Adults: They may have feelings of guilt, shame or an inability to add to their family’s financial success. They may hide in binge spending, destructive habits, or a desire to mount a big push to expansion.  Research has found that 70% of family wealth does not make it through the second generation successfully.  Knowing their values and how these values benefit the family as a whole as well as how these values form their talents and skills play a gigantic role in mitigating young adult disasters.
  • Parents and Career Adults: Busy with careers and raising children, these family members can find they are too busy to teach more than the rudiments of finances to their own kids. Financial literacy is delayed in pursuit of academics and hobbies. Only 17 schools out of all of the public schools in the US offer a financial class. Financial conversations have to be part of the family structure and family meetings.
  • Senior Adults: They can feel frustrated at the lack of financial acumen and interest in their family. They can sense a feeling of entitlement growing in their grandchildren’s lives. Because of the frustration they feel they might be tempted to make hasty decisions that could negatively impact the family’s longevity. The family mission, family meetings, and meaningful (not heavy handed) family governance, provide the framework of a meaningful and connected family for generations.

 When money is integrated into the familyculture, the ‘m’ in family becomes united with the rest of the family significance today and for generations to come.

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