Money Conversations are Hard

We all worry about the financial future of our loved ones.  Do our heirs have the skills to be financially successful?

Do you think about how to pass on your financial knowledge and values?  We do!

While it may seem reasonable to “wait for the perfect time” to engage in money talks, we believe there truly is no better time than now to start diving into conversations about money to ensure that your family is on the same page about how money, goals, and values come together.

Starting a financial conversation can sometimes be easier said than done, but we believe that the next generations are eager and willing to learn more about money and values from their parents and grandparents which can then help them make more informed financial decisions as they navigate managing their own financial lives.

Here are some engaging ideas:

·        Share your journey:  Telling stories about your younger days and how you overcame obstacles can resonate with someone just starting out.

·        Explain your values:  Talk to your children and grandchildren about the underlying values that guided you throughout your life which led to a fulfilling life, not just in terms of money or things.

·        Educate using real-life lessons:  Age-appropriate activities can help even the youngest family members build positive lifelong money habits.  Invite members of your family to collectively manage a small investment portfolio or join you in working at a favorite charity.

·        Share your approach to wealth planning:  Pass on your thoughts about risk taking, spending vs. saving vs. giving, and how your advisors have assisted you over time.

 

This may be your opportunity to impart any financial stewardship you want to pass on to your loved ones.  This will also set the foundation for future financial conversations that should be held on a recurring basis, especially as important changes arise in everyone’s lives.

Does this still seem a little daunting?  Try some of these starter questions:

 

·        What goals have you been proud to accomplish?

·        What is the biggest goal you want to accomplish next?

·        How do you see your money working for you?

·        What have you learned about money that you wish you knew earlier?

·        Is there any information you want to know more about?

 

While each family is unique in how they move through life, one thing is usually consistent:  the families that succeed over multiple generations work at it…just as they worked to achieve their wealth and worked to maintain their relationships.

 

Finally, if you want a fun, relatively low-cost way to get the younger generation excited about investing, this idea might be for you!  How about setting up a family investing club or contest?  Some family dynamics work in a cooperative manner, but others prefer a little old-fashioned competition.

There are many ways to accomplish this but simply put, you designate a certain amount of money per participant and each participant researches and makes an investment decision with their designated funds.  Although there are simulated games and apps that track real stocks, sometimes it can be a little more fun knowing real money is being invested.

You can then send out regular email updates to the participants updating performance for each investment and adding financial lessons or tidbits of knowledge along the way.  If you are handling this as a competition, you can also announce the winners and losers for each quarter, year, etc.  What a great, fun way to teach them about investing and providing them with lifelong financial skills!

Bottom line, we encourage you to start these financial conversations sooner rather than later!  Younger generations generally approach things differently and have new and innovative ideas.  Older generations can appreciate that and can provide support and guidance as their offspring follow their dreams.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC.  Pharos Financial Advisors is a separate entity from WFAFN.