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How to Have Meaningful Conversations With Your Family About Money

By Chris Winkler - Founder | Principal

In many families, money can be a taboo topic. Talk of money might bring up a range of intense feelings – pride, jealousy, fear, greed, generosity, ambition. It could also call into question what money means, and the understanding of its significance might be intertwined with deeply held perceptions about one’s worldview.

Parents can be reluctant to talk about money with their children because of the complexity of the issue. They also may be afraid of undermining their children’s ambition. For the growing number of adult children with aging parents, hesitation in broaching the topic of money sometimes springs from worry that their parents will take offense or misinterpret their motives. Overcoming this reluctance and having meaningful family conversations about money is an essential part of any family wealth management strategy, especially as an increasing number of people are sandwiched into the role of caring for both their parents and their children.

Close Relationships Begin with Open Communication

Start Where They Are. If you have younger children or grandchildren, financial literacy is a great starting point. Begin by teaching them the foundational concept of Save, Spend, Give. Ask them if they see themselves as a saver, a spender or a giver. Work together with them to define their ideal allocation to each of the three buckets. This will help them set the stage for a healthy relationship with money for their lifetime.

If you have older children, you can start teaching them how to build a budget on big firsts – first job, first car, first house/ apartment, first child, first investment. You can use the same Save, Spend, Give framework from above. You can also use this as an opportunity to better understand where you may want to help them bridge any financial gaps.

Share your story. The conversation can begin by sharing the journey of how you created your own wealth. Share the great life lessons you learned along the way to building financial security – the mistakes you made, the risks you took, the sound advice you received, the disciplines you created and the sacrifices you made. Talk about what you are most proud of and things you may have done differently

Ask Questions About How They View Money. Here are a few you can start with:

  • What are your aspirations?
  • What values are important to you? Why are they so meaningful to you?
  • What causes would you like to have a positive impact on?
  • How do you see money’s role in your life?
  • What aspects of money would you like to better understand? What questions do you have?

Talk about the principles that are meaningful to you. Let them know what you want your wealth to provide for your family. Discuss the values you want to be made part of your legacy and their potential role in this.  

Make plans for the future. What are your children’s values and aspirations, and how do they overlap with your own? Is there a way the family wealth can be used strategically to meet their goals or a larger collective goal? It’s important to understand that this should not be a one-and-done conversation, nor should it be one where you need to do all the talking. Our children’s journey is their own. They are the hero in this story, you can be a trusted guide.

Create new traditions. You’ve built traditions over the years with your family, Thanksgiving, Christmas, Chanukah, etc. Perhaps it’s time to start a new tradition. Gather with your family once a year and have an open and loving conversation. Allow your children to ask questions and ask them questions too. Their plans may be different from yours. Here are a few ideas to create engagement with your family:

  • Schedule a few dinners during which you discuss a significant part of your history with your loved ones.
  • Write a letter to your children about your plans for your own future and the aspirations you have for them. We’ve had clients create a tradition of writing an annual letter to their children.
  • Form a family Donor Advised Fund to engage your children and grandchildren in the creating a legacy of impact. This can also be a wonderful opportunity to teach a younger generation the responsibility of stewardship.
  • Use planned annual gifting funds to help your children or grandchildren start their own investment journey. This could help them begin learning about how investing works. The current annual gift tax exclusion is up to $17,000 per person which could be used to start Roth IRA’s, fund 529 College plans or help them build an emergency fund.

Legacy is What You Leave in Them, Not to Them

Having a successful relationship with our family and money begins with the same behaviors we use in the other areas of our lives – trust, clearly defined values, shared responsibility, open communication, love, and understanding.

By engaging our loved ones in these conversations, we can create a greater impact than money alone could ever have.

My gratitude,