Money is tough to talk about. For many families, it’s a taboo subject, along with politics and religion. Others feel it’s fraught with emotional complexities that make it awkward or difficult to discuss, often resulting in outright avoidance of the topic.
But to have a healthy relationship with money and wealth, it’s necessary to overcome any reluctance and hold family discussions regularly. Many high- and ultra-high-net-worth families manage wealth successfully through generations, all while establishing happy relationships and maintaining the peace among their members—and there’s a lot we can learn from their approach.
Here are three of their top strategies for having effective conversations about money that you can implement with your own family.
Create Culture Consciously
As the old saying goes, if we fail to plan, we plan to fail. It’s similar within the family structure. Before initiating a conversation, give some thought to what kind of culture you want to cultivate around money. This could include who you are as a family, how you think about and spend money, and how you may use it to share with others or be of service in a broader way.
Having a shared culture helps each family member understand what is expected of them in terms of behavior, contribution and roles they play, in both the family unit and the world. What’s key is creating a shared culture intentionally, being sure to include all current family members. It’s also a good idea to have a plan for welcoming anyone who may join the family in the future to maintain inclusivity over time.
Gather ’Round and Share Stories
Stories are powerful. Research conducted at the Emory University Family Narratives Lab shows that sharing family stories with children and adolescents helps them develop higher levels of self-esteem, academic achievement and social competence, along with fewer behavior issues. Knowing how and where their parents and grandparents grew up and met, how they and their siblings got their names, and similar information helps foster a sense of well-being and belonging. Getting the specific details right is not nearly as important as the telling of the stories themselves.
A great way to share family stories is around the dinner table. You could also plan family camping trips or vacations and make it a tradition to tell stories while you’re all together. However you choose to do it, make it a consistent part of your time together.
Start Early
Children become aware of their family’s financial circumstances long before parents think they do. For example, kids may notice that they have a house or car that’s different from a friend’s or classmate’s, or they take vacations and others don’t.
What they often don’t understand, however, is the bigger picture of what it all means. This is why having a family culture, and talking about it (not lecturing), is so important. It helps kids understand bigger-than-themselves concepts like what wealth means to your family, how you came to have it, and what responsibilities and challenges you—and they—may have as a result of it.
Also remember that their little eyes are watching. If you behave in ways that are counter to your expressed values, your kids will see it and be more likely to follow your actions than your words.
Having open and honest conversations is one of the money management strategies utilized by wealthy families. It’s a tool that you can use with your family, whatever your level of income. Family conversations around money and wealth are not easy to initiate or to have, but they yield dividends for years to come.
So start today and start having the conversations that might not be easy but that are important.
Lisa Taranto Schiffer
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