Holiday Family Giving Conversations Can Reap Great Benefits

At a recent University alumnae dinner, the host asked the attendees, to indicate, by a show of hands,
who engaged in family philanthropy. Nearly the entire room or about 150 guests raised their hands. But when the host followed up by asking who engaged the family in a conversation about the meaning of philanthropy and the impact they want their donations to have both for the organization (s) and the family, only 2 raised their hand.

With the holidays providing a favored setting for family conversations, perhaps this can be an appropriate setting to start a conversation about the impact of giving for the family.

Remember these 3 tips to make your conversation more engaging, should you choose to initiate a family conversation on charitable giving. Know and communicate the intention of the conversation and its intended outcome. Keep the conversation friendly and inviting rather than judgmental and limiting. Have an inclusive conversation by ensuring that everyone has an opportunity to say what is on their minds and in their hearts, without interruption.

When each member feels heard, understood and included, they feel connected. This connection can reap great benefits for families as they initiate or develop their family giving.

Holidays and giving, bring it home for deeper cheer.

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Trust is like a Spider Web

In a book I recently read, trust was defined in one word: predictability. That was powerful. And I began to inquire: “Is that all? Maybe that’s what trust comes down to.”

So, I started looking at trust more carefully, or more specifically, my use of trust, I understood it to be more than predictability. But what more was it? I looked at trust for me and saw that what was missing in this one-word definition were the additional components that give trust its almost mercurial characteristic. I would like to mention them here.

I have found that trust includes a sense of reliance in someone’s character. Where predictability infers expectation, reliability infers consistency. Whether it is a sense of reliance in their sincerity, their competency, or the way they show up, reliance in someone is a major ingredient to trust.

Another component to trust rests in understanding one’s motivations. Motivations reveal intentions, priorities, goals and needs. When I understand someone’s motivation, I can bestow trust.

Yet another component to trust is the feeling of true authority born by experience and not merely by knowledge. When I sense that someone is a student of what they are talking about, rather than a transmitter or information, I can grant trust.

What I find interesting about trust is that we can provide trust quickly, slowly, or not at all. There seems to be a continuum for the application of trust. I have found that this continuum revolves around feelings of safety, feelings of reciprocity, and feelings of being understood. Trust is a mighty bridge to building and sustaining connection. And like a spider web-strand which is ten times stronger than steel at its same weight, trust is a strong bond between people. And again, like the spider strand which can be easily broken and change the nature of the web, trust can be broken or withdrawn suddenly, and like the spider web, changes the nature of the relationship to which it was bound.

Let me know your thoughts on trust. How do you experience trust? How do you dole out trust? What causes you to withdraw trust?

Active Listening is Key to Strong Communication

How often do we fast forward through a conversation because A: We know what they’re going to say, anyway; B: We have something we want to say and are no longer listening to the other person or C: Our mind is wandering to something else and leave them speaking to the air? Never, right?!
When communication is rocky, use this tool to change the dynamic of the conversation: Active Listening. Active listening means listening to the intention of the speaker rather than inserting your own conclusion or meaning. It means taking the time to understand what the other person is saying instead of making assumptions.

For instance, the speaker may say: “I can’t give you money. I need it.” It is easy to make a judgment or assumption about what the speaker is saying but what is really being said here? As the active listener, you take the time to find out rather than jump to your conclusions and assumptions. This is an opportunity for inquiry with an exploratory response like: “Tell me more about what you need it for” or a question like: “So I can better understand, what is important about money to you?” Inquire with a sense of wonder rather than a sense of pre-conceived judgment.

It is important to learn, in active listening, what the speaker intends, with their words. In the example above, the speaker might be inferring that they have few resources and need to keep their resources for their immediate obligations. It could mean that the speaker is not yet convinced that your request is valid or important enough for them to give you any. It could mean that the timing of your request is inappropriate. It could mean that the speaker does not trust you. It could mean that you did not approach the subject in a way that was acceptable to the speaker. There are so many reasons that could have precipitated the speaker’s response. Active listening eliminates the need to assume, to judge or to react and use an inquiring methodology with your mind open to understand what is motivating the speaker to say what they said.

When you listen actively, you provide space for the speaker to tell you about their intentions and motivations. When the speaker has completed their comment, you, the receiver, can reflect and paraphrase what you heard, and relaying what you understood their underlying motivation or interests are. For example, if the speaker were to say: “You never help in the house”, you can reflect and paraphrase by responding: “It sounds like another hand with chores is important to you.” Then follow up with a question: “What would it look like if you had help in the house?” Note how this helps diffuse any shame or blame tricks, tactics or techniques. Note how this type of a response can create a bridge of connection rather than create a wedge of contention.

Communication is active. Tell me where you have found active listening benefit you.

How Could My Parents Blow It?

As the multi trillion-dollar asset based makes its way from one generation to the next, in what has been called the biggest asset transfer in history, I hear a repeating question that has plagued families for hundreds of years: “How could my parents blow it when my grandparents had so much money?”

According to the Williams Group, a wealth consultant group, 70% of wealth families lose their money by the end of the second generation and 90% of these families find their wealth has been squandered, spent, or squabbled over by the end of the third generation. And they are not the only ones to have uncovered troubling findings. U.S. Trust found, in their survey of high net worth individuals, that 78% of the wealth holders feel that the next generation is “not financially responsible enough to handle inheritance.” 64% of those surveyed have disclosed little to their children about their financial wealth.

I have heard many stories due to the work I do with families, keeping them connected across generations, when money matters. One family’s senior generation, turned over all financial decisions, after receiving a large payoff for the sale of a product, to their financial advisor. The financial advisor has become the arbiter of family and friend loans. The financial advisor decides how and when the money is to be used. The family has not established its own purpose to the money. There are no family conversations about money. Although the sale of the product was completed two years ago, there are already disagreements about whether or not to let the next generation know about their wealth, where to send their children to college, and whether or not to help an older generation with their mounting health care bills. The financial advisor is not equipped to help the family build a framework of purpose to the money so family conversations about money can be neutral rather than tense.

Another family, whose story I know, doesn’t want their children to know about the money they received from the sale of a business. They decided, after receiving their initial check that nothing would change at home. But within a few months, one parent had quit work, wanted to move their parents to live near them, and was adamant that they did not want their older teenage children to know anything about “the money” as it may ruin them. The other parent has found that they cannot engage in a meaningful conversation with their spouse about their money. It has created a gap between them.

Money, in families, needs to become just another topic conversation or more families run the risk of finding that their money becomes a “home wrecker.” When money is not talked about and understood for its role in the family’s life, data supports the fear that the next generation will “blow it.”

“How did my parents blow it when my grandparents had so much money?” is a question I am often asked. “They didn’t know any better. Nobody taught them about what money meant to them nor helped them construct a framework of purpose that the family shared, developed and sustained across generations.

What can you do to affect a framework of purpose and financial smarts in your family? Let me know I would like to hear your comments.

Reduce Money Conflict by Instituting These 2 Key Elements

Conflicts can arise in families with family businesses in many areas, but one that seems to be prevalent and I see in many of these families is: conflict around money.

When there are family members both in and out of the family business, the topic of money can become heated when differing objectives are striving to be served. As the business grows, the business “side” may very well need and want to re-invest profits in the business, pay down debt, or expand while those not in the business may want their distributions or dividends to grow. This is a natural tension that can disrupt any family enterprise and family heart.

Families who want to sustain the family across generations while continuing the family business have had to create successful models to keep the harmony of the family objectives in partnership with those of the business. A successful model is one that codifies the purpose of the family money with the purpose of the business so both can be understood and appropriately developed.

Because individual expectations can disrupt what is being built or developed, it is critical that purpose be defined and codified by all appropriate family members. It is also important to conduct annual reporting meetings so each “side” is aware of the sustaining objectives of each other and stay in high communication with known expectations. This will reduce conflicts between the two entities. Without purpose, cohesion gives way to individual agendas and behaviors which in turn, ignite conflicts.

Change the Narrative of Money Conversations for Better Outcomes- Part 2 of 2

It is important for couples who are arguing over money to take a moment to change the narrative. Instead of rehashing the perceived problem, engage in a different conversation about money. Start your next conversation with a question.

 

The type of question you ask is critical. For starters, ask open ended questions as they elicit a more expressive response. Listen to the responses you receive, not merely for information but for feelings and intentions behind the words that the responder provides. Seek to understand them so you can create bridges to a conversation that brings you both to a satisfying outcome. Ask questions like:

  • “How did you observe about money when you grew up?”
  • “What did your Mother teach you about money overtly and covertly?”
  • “What did your Dad teach you about money overtly and covertly?”
  • “What did you like to do with your money as a child and how did that make you feel?”
  • What is an example of a challenge you have had with money and how did you successfully face that challenge?”
  • “What is something you are proud to have done that increased your savings?”
  • “What would you like to change with your current money management?
  • “What are three things that are important to you about money?”

 

There are many more questions that can be asked but I wanted to get you started. You may think of ones on your own as well. The key point is to remember to make your questions open ended and inquisitive rather than confrontational. A question like: “Why don’t you save money?” is more confrontational than “What is important about saving money to you?” which is more inquisitive and invites understanding. People want to be understood and it is important that questions be framed to do that.

 

Changing the framework of money conversation is beneficial for two big reasons:

  • It gives context to someone’s current views and behaviors around money.
  • It can transform the existing anxieties about money to understanding where the other person’s views on money derived.

 

Have your conversations be ones built on respect and understanding as you develop strategies to your productive conversations about money.

 

One final thought: share your responses to these questions as well…after the person you are engaged in the conversation with is done with their response to the question you asked. Trust is built when people feel listened to and understood. Here is an opportunity to listen, share, seek and offer a bridge to understanding.

 

Would you like more guidance as move your money conversations from mess to success? I would love to help you! Send me an email at bhaj@focusasndsustain.com and let me know an issue you are facing with your money. Let’s get you on track to having money conversations that work for you.

Do Not Forget the Past; It Provides Mighty Support

When we forget those who have come before, like our great- grandparents, we forget our history. When we forget our history, we must begin again leaving new footprints that are themselves, swept away and forgotten as our great grandchildren look back at photos of us and wonder who we were.

 

Contrast this with those families who have captured, and meaningfully nurture the values and enduring traits of those who have come before them as a pillar to support their own lives today and tomorrow.

 

If you do not care how your family will thrive or if it will drift into a fog of insignificance, your family’s history will play out as it has for centuries for most families. Great grandparents have no meaning, they have been forgotten. New generations start afresh as if nothing came before them.

 

But if carrying on the spark of “what matters most” to your family, as a group of like-minded connected individuals, then your family story is an important element to your family’s success. And you must create that story. It will not create itself.

 

Researchers at Emory University found that “…family stories provide a sense of identity through time, and help children understand who they are in the world.”  When adolescents can see the values and traits they share with past family members, they form a stronger sense of well-being and a stronger sense of identity.  This Emory University study also showed that ​there is real benefit in sharing the stories about where the family came from, both geographically and through their values. Family stories keep families connected through generations by its narrative.

 

Your story, the one that will live on, will include how you met challenges, what successes have meant to you, what values you deem to be important and why and how they have guided you. Your story will describe how you came to value what you do value so those who come after you can understand themselves better by hearing from you. When they understand themselves better, they have more confidence and feel more secure in a world where those without this foundation, struggle to be seen and known.

 

Do you have a family story in your family, one that benefits its members, is shared because it came from the “author’s” experience?  Let me know. I would love to hear your thoughts on this important recommendation.

 

 

 

 

 

 

Sometimes, Money is Hard to Talk About. But…

When money can be talked about without the added emotions of hidden blame or unrelenting shame, money conversations can become like other productive conversations: meaningful and connective.  When money conversations become supportive rather than decisive, money conversations can be engaging and powerful. Instead of blaming others for their behaviors or shaming ourselves for behaviors and habits we are exhibiting, we become supportive of another’s and our own objectives with money. We become engaged in conversations as we understand others and our own motives and intentions with their and our own money. We can then put in play powerful actions to attain our common objectives. What makes this transformation from feeling divided to feeling unified around money?

When we understand each other’s views and stories about money, we become more engaged with their struggles and triumphs with money. When we take money “out of the closet” of isolation, blame, or shame, and bring it into our shared lives, as partners and as a family, money becomes a productive tool.

What restrains you from talking about money? Is it lack of confidence on your ability to make consistently good decisions about money? Is it an inability to engage your partner in conversations you think are important with your money?   Is it an inability to know how to approach planning your financial goals? Is it an inability find time to spend on financial matters and if you had the time, not knowing how to frame a conversation on financial matters? Is it a fear that conversations about money will lead to tension or disinterest from your partner? These can be dealt with productively and effectively.

The first question you can ask someone you share finances with is:  What is important about money to you? And let them response without interruption from you. You can learn a lot by asking this one question.

When you find out what is important about money to yourself and to those with whom you share financial interests, money will transform from being hard to talk about to being a welcomed subject of conversation in your house.

Let me know what keeps you isolated with your money or, how you have created a bridge from isolation around your money to it being a productive tool in your and your family’s life.

 

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Prepare Your Family for Money It Will be Inheriting

It is estimated that 20,000 families will each transfer over $20,000,000 to the next generation next year. They will continue doing so, it is forecasted, for the next twenty-nine years. Although this may sound fortuitous, research tells us that 70% of these families will find their wealth gone by the end of the second generation and by the end of the third generation 90% of these families will find their wealth squandered or spent. Unless they take steps to keep the wealth, families will find themselves falling into this statistic.

Money that has been amassed, will be gone, for most families, by the time their grandchildren are thinking about what they can pass to their heirs.  The great estate and trust planning coupled with the precise tax and investment positioning, although essential, is not enough. There is an element that most families do not put in place to ensure that their money passes to next generations intact. And that missing element is the preparation of the family for the receipt of the money.

Heirs need a blueprint and a roadmap to know how to sustain the wealth through the generations. They need to master skills of leadership, and family cohesion to successfully steward their new responsibilities associated with the money. Only when families have and master the roadmap to success, will they be able to grow cohesively as a family for many generations.

 

Let me know how your family is attending to preparing the family for its roles as financial beneficiaries. What kind of conversations are you having? How do family members feel about this forthcoming transfer? How is the family talking about the transfer of financial stewardship?

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Statistics Show We are not Raising Financially Literate Kids

Kids, ages 10-14 scored a 54%, ages 15-18 scored a 60% on a 30 question national financial literacy test. This test measured their ability to save, earn and grow money.

 

Kids have access to money but do they understand how to use money? According to this financial literacy test, no. Of course, they know how to spend but can they count the change they have received? Is it the correct amount?  Next time you have a transaction where you give a $20 bill for an item costing less than $10 watch the change making ability of the cashier. How easy or hard is it for your child to determine if the cashier gave them right change when the register does not tell them what the correct change should be?

 

Do kids check their receipts to make sure they were charged correctly?  Research conducted in 2012 by uSwitch found that 70% of consumers were overcharged on a bill in the last year…and did not know it until it was pointed out to them.

 

Just how familiar are kids with making change, with being charged correctly, or with being overcharged? When they see these habits in adults who show them how to model behaviors, it is easier for them to do the same. When kids do not see a model to imitate, checking receipts or counting change can be embarrassing. They feel uncomfortable not trusting or believing the cashier. They have not been taught how to properly deal with this.

 

It’s time to teach kids about money. After all they use it every day and checking their receipts and counting their change is a good habit to learn. You might even decide to reward them for discrepancies they find.  This will go a long way to raising health financially literate kids.

 

Leave a comment and tell me what you do to encourage and build your kids’ healthy money habits? Let me know if you need help with this endeavor. We can help.