Make it a priority to pass on your financial values to the next generation, no matter how much or how little wealth you plan on passing down to your children or grandchildren.
Have a Plan
Many people don't have a plan in place to transfer wealth to their heirs. Thinking about and planning for life after we have passed is something we as humans often put off, and thus parents are often hesitant to discuss money and finances with their children. Unfortunately, this silence can have dire consequences.
Preparation is important if your heirs find themselves with “sudden wealth”. Imagine an individual inheriting $10 million and has no knowledge about personal finances. The sudden wealth could destroy an individual if they’re not prepared, by wasting the money or enabling a dangerous lifestyle.
Introduce to your Advisor
If you are unsure how to begin educating your children or grandchildren about finances, you should work with your current financial advisor. Schedule an appointment and bring your heirs along so they can start building a relationship with an advisor you already trust.
Encourage Your Children to Save
It is essential to teach your children how to save. Matching their savings dollar for dollar is a good way to teach them about compounding interest. Receiving an extra $20 for every $100 saved can get children excited about saving. The goal is to start the habit while they are young so they will understand later how to not waste the inheritance on frivolous things.
Work and Allowance
When your child is old enough to receive an allowance, you can start educating them about finances. If you own your own business, the best way to teach your children about finances is by getting them involved. Hands-on experiences are often the best way to learn about finances. Age-appropriate tasks, and being paid accordingly, is a great way to start teaching them about finances, saving, and spending.
Passing on your financial values is going to help your children more than the money ever will. That is why it is essential that you start teaching your children about finances when they are young (and still listen!). This will ensure that when they receive their inheritance, they will have the knowledge and skills needed to build and continue the legacy for generations to come.
Contact us for more information about how to pass on your financial values to the next generation and be sure to check out some of our other blogs/videos on how to incorporate your children and family into this discussion.