One of the first questions I ask people who are seeking financial advice is, “What are your first money memories?” I ask this because the childhood years are formative when it comes to making money decisions as an adult. In my experience, I have found that people either approach money decisions very similarly or, in contrast, very differently from that of their upbringing; there usually is not a middle ground. As we enter a new year, I encourage you to make a goal of delving further into financial discussions with your children, grandchildren, or other youth in your life. These conversations can have a significant impact on the rest of their lives.
Conversations With Youth
The type of conversations with youth should vary by age. At younger ages with my kids, I would take them to the store with the $10 they had in their possession. They may have seen a toy that they really wanted that cost $15, so they could either wait until they had saved enough money or get the “less favorable” toy for $8. As my kids have aged, they have received a monthly allowance and now are responsible for setting goals, saving, and budgeting for the items they want. This is supporting them in establishing a relationship with money that helps them understand and see the impact of their decisions and behaviors. Eventually, they may have jobs that will allow them to continue building on those principles prior to adulthood.
Conversations With Adults
Financial conversations with the young people in your life ideally continue into adulthood. For example, I encourage families to have open discussions about their estate plans. These conversations offer the opportunity not only to cover your wishes on logistics, but usually provide an important forum for sharing values that are intertwined with finances. It’s a time when you can share if you primarily plan to utilize your assets for lifestyle expenses, gifts during your lifetime, or leave a legacy upon your death. You can share if there are certain values you would like tied to your assets, such as priorities for spending on education or charitable organizations. You can also be sure to share, for example, if there are personal items that have been in the family for generations, and what you’d like to see happen with them. These kinds of conversations today will undoubtedly strengthen the foundation for those who follow the trail you have paved.
The Year Ahead
As we go into the new year, consider opportunities to be intentional about scheduling these kinds of conversations with generations after you. Unfortunately, many people in our communities are not having these conversations. In addition to working with CCM families, I have made a commitment in helping to establish the Financial Literacy Coalition of Minnesota to bring a personal finance course requirement to Minnesota high school students. For me, 2023 represents a year of promise in further engaging our younger generations in personal finance discourse.
If you would like some ideas on how to go about supporting financial planning for future generations, please connect with your CCM Advisor.
NOTE: The information provided in this article is intended for clients of Carlson Capital Management. We recommend that individuals consult with a professional adviser familiar with their particular situation for advice concerning specific investment, accounting, tax, and legal matters before taking any action.