“Financial transparency comes only with a readiness — and it takes a decade or so to give them enough knowledge and context to make the information meaningful and for you to feel safe sharing it.” From Ron Lieber’s book The Opposite of Spoiled.
More uncomfortable than talking to their kids about sex!
As Private Client wealth managers we always bring up this subject with our clients – you gotta be talking to your kids about money at all ages. Whether it’s the basics when they are young or about sophisticated inter-generational estate issues as young adults.
We understand that for some people this is more uncomfortable than talking to their kids about sex! Money is a tough topic, depending on how you grew up with it. Your view of money also depends on how your parents taught you about it – that is, what it means in your life and the basics of how to handle it (or not).
My personal story…
This is my personal story, and, I must say, it has worked out quite well!
When my kids were young, the questions were simple and I kept the responses simple. So, whenever they got some money from allowances or Grandma, I always told them there are three basic things you do with money:
- You must SAVE some – always keep some aside like a squirrel.
- You can SPEND some – enjoy it and go buy your favourite candy or a toy you really like.
- You must GIVE some – help the needy, not everyone has what you have.
When my oldest son (now 19) was about 12, he came home from school reporting that his teacher had asked the class what they would like to buy if they had a lot of money. He looked up at me, beaming, “Everyone wanted Xboxes and Ferraris, but I told the teacher I would save some, spend some, and then give some to the poor. She said that was the best answer in the class”.
I think I completely welled up at that very moment.
It’s about managing what you have, not what you want.
It’s about educating your kids on the topic. However, this doesn’t necessarily mean that children are entitled to your tax returns the first time they ask how much you earn!
Our view is that helping them to learn value and getting comfortable with money and what it can do in their lives. And, most importantly, managing what you have and planning for what you want.