Teaching Your Family About Wealth Management
Ensuring the prosperity of your biggest legacy, your children, is no easy task. A popular sentiment that transcends cultures around the world is that it takes just three generations to lose family accrued wealth. The likely reason behind this is that when a generation grows up without financial hardship, they fail to understand and respect the value of money. In order to give your children and future generations the best chance, it’s vital to teach them about wealth management from an early age.
Teaching kids to be financially savvy is something to start early in childhood. Age appropriate lessons will help ingrain a respect for money and development of healthy saving habits. Set goals with your children for them to work toward – you may consider incentivising them for achieving such milestones.
Need vs Want
A vital element of teaching your family about wealth management is cementing a distinct difference between need and want purchases. Be ready to spend on the things they need but take the necessary time to save for purchases that are things that they want. When people have a sensible grasp of finance, they become more skilled at delaying gratifying purchases. This is something that comes easier with maturity, the will to wait for what you want. Teach your family this value from an earlier age and in doing so, you will protect their financial interests.
Don’t get caught up in your emotions
As your family grows and learns about wealth management, you should encourage them to adopt a critical approach to being sold to. In our modern world, we’re exposed to commercial messages constantly. Advertisers are experts at appealing to our emotions and wants. Remaining objective to advertising is key to the process of staying on top of your finances. This is especially true for younger people; whose emotions are more influential in their purchase decisions.
Respect amongst family
The transition and preservation of finances in families is more commonly affected by family issues, not legal ones. Teaching your family about the value of money is a priority, but so is respect and sharing. For many of us, we could imagine nothing worse that could happen with our estate than it creates conflict for our family. When this time comes, ensure instructions for your final wishes are clear.
Wealth management is a skill that can be taught
Instilling strong wealth management practices in your children is one of the most important steps you can take to provide for their financial future. The lessons you teach will be with them for just as long or longer than the financial assets you leave. Wealth management is a skill. It can be refined and people who were once bad at it, can become good at it. Remember that teaching your family about finances is an ongoing process. Invest time in it and invest in your children’s financial future.
For more information regarding wealth management and your family, reach out to the experienced team at Provide Wealth.