When should you bring your kids into your financial lives? What should you share and what should you keep to yourself?
From my experience, the earlier the better. But it doesn't mean to do it all at once. If you bring a child into a conversation too early, you may have to say no to things for decades to come. Once a adult child knows a parent has money the demands may come often. Can you help me buy a car? A house? Pay off my student loans? Pay off my credit card? And on and on, saying no gets exhausting!
Multigenerational wealth doesn't happen by mistake. It doesn't grow by itself, and it doesn't continue without effort. Much like a garden needs constant care and planting year after year so do the seeds of money discussions. So how can you bring your child into your family money discussions regardless of age?
Bring the conversation in early, keep it based around values and habits. Avoid focusing on amounts until there is alignment around goals. There is a balance that needs to be found between a parent’s desire of the funds and a child's autonomy.
This dynamic can be difficult especially in the event of adult children. Autonomy has long been established if a child is already in their fifties or sixties. Their goals and values will need to be considered alongside the parent.
What are the key points that need to be shared between a parent and child?
1. Who are the professionals in a parent’s life?
Financial, Tax, Legal, Medical, etc. Who are the people that can be called in the event something happens.
2. Where are the key documents?
Is it a box, a file folder, or a binder? Are there electronic copies stored somewhere? It's not always necessary to know what is in each document but where they are is important.
3. What are the child's responsibility.
Nobody likes surprises, if a child will be acting as a medical or financial power of attorney. Let them know, it will likely lead to deep discussions around topics like end-of-life care.
Careful discussions between a parent and a child may lead to deeper relationships. It will also create an elevated platform for successive generations to build upon.
So, when should you bring your children in to your finance discussion; as early as possible.
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