What is the Right Way to Educate the Next Generation About Money?
Most families, even the more financially successful ones, don’t talk about money the right way, or even put much attention into discussing money as a family at all. For a variety of reasons this is harmful to a family’s continued wellbeing. Here are some tips for successfully imparting the knowledge and wisdom about money that your family needs to know to educate the next generation about money.
Family Money Conversations are Tough
More often than not, family dialogues about money don’t happen the right way. Everyone wishes they had more money. As a result, conversations can get emotional and often degenerate into:
Resentment (Mom and Dad paid to send you to med school and didn’t have enough for me)
Shame (I loaned my ex-boyfriend some money and he never paid me back)
Jealousy (My brother makes more money than me)
If money is even on the agenda at all, it’s normally not a constructive addition to the family meeting. How is that conducive to a system that will educate the next generation about money?
Money Silence is the Enemy to Wealth Transfer
Parents who are high income earners or who have considerable net worth tend to fear letting their children in on how much money they have because they worry that it will cause children to act entitled. But just like you had to have “the talk” about other subjects, living in silence about money is a harbinger of destruction.
Silence is the enemy of wealth transfer. If you want your kids to be able to continue the life of prosperity you have worked so hard to create for them, ignorance is not the solution; education must happen. It must be broad, thorough, and frequent.
Calling Upon Diplomatic Third Parties
It’s not just for the insightful financial advice they provide - most financial advisors have a job because they bridge some kind of emotional gap that human beings have between each other and their money.
Money can be so hard to talk about with people you love. It may be easier for your kids to talk to a perfect stranger about money. Sometimes the advice you give may fall on deaf ears, but hearing it form an objective third party (who isn’t the same person to nag you about cleaning your room) may hit home better.
How Financial Advisors Can Help Educate the Next Generation About Money
Find a financial advisor who knows how to work with all the family dynamics and make the experience of involving your kids in the family finances a positive one. It goes beyond setting up a nice dinner seminar at the steak house. They have to act as a liaison and bridge the gap. To do this, they must have the capacity to be objective and take the perspectives of all family manners into account in a manner that is equitable and fair.
Financial advisors typically educate the next generation about money in one of two ways: either one on one or by publishing materials about this topic. At this is of importance to us here at Financial Alternatives, we actively do both. If you’re interested in getting your children more involved in your family’s finances, please contact us for more information about how we can help.