Do You Talk With Your Kids About Money?
More than 60% of parents don’t talk with their kids about money. This staggering statistic comes from a Merrill Lynch study of 650 families with $3 million of investable assets.
When asked the reason for their silence, some parents said their children had already figured it out. However, others said they believed it wasn’t anyone’s business but their own.
This lack of communication existed even among parents who had already set aside money for kids in trusts, for homes or for schooling—in other words, their children would be inheritors.
Why Others Don’t Talk About Money
Parents in the study cited four reasons for not discussing their wealth with their kids (adapted from Paul Sullivan’s New York Times article):
- We don’t want our children to be entitled. We live under the illusion that if we don’t tell our children about our wealth they’ll maintain a strong work ethic. However, our children are paying attention much better than we give them credit for. They are aware of how much a house costs, the cars we drive and the vacations we pay for—let alone college. Sadly, we create entitlement by not talking about wealth.
- We think talking about it will make it worse. Talking about money creates embarrassment for many. And talking about money doesn’t come with a roadmap. There’s no obvious time when parents should have the talk. Nor does it come with come with any markers—how much to share, how to share it incrementally, how to talk about complex legal matters. It’s the easiest conversation to avoid and push down the road.
- No one ever had “the talk” with you. Conversations about financial wealth typically aren’t modeled. Think about it. It’s like starting a new skill. It’s scary at first until you get the hang of it.
- You do not come from generational wealth. Many families of wealth are first generation. As a result, conversations about wealth—what to do with it, how to use it, how to manage it—are all new conversations. On the other hand if the goal is education and unity, conversations about wealth can actually drive success for children into the future.
I’d be interested in learning your own experiences. What prevents families from talking about money and how can they learn to overcome that?
Photo by Mael BALLAND on Unsplash
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Published September 4, 2019
Topics: Culture Commentary