In the pass we have discussed the ‘how’s & why’s’ of how you can impact valuable, lifelong lessons and financial legacies for your loved ones – more specifically - your children. Children who inherit significant wealth are all too often under prepared and over whelmed.

As with most skills, talents, and overall ‘education’ gained throughout a lifetime of experiences, remember - practice makes perfect, consistency is key, and planning optimizes your goals. We suggest that when imparting knowledge of finances upon your children; from saving change in a piggy bank for the youngsters, to teenagers saving percentages of allowances, monetary gifts, etc. while working with them as a partner, or as a ‘mentor’ during their learning phases of finances – is the best way to educate your children at any age, and at any stage. 

In this article, we examine with tools, techniques, and take-aways that will guide you and your children to financial success.

Planning

Financial literacy for children of the affluent should start early.  While parents may have good intentions for raising money-mature kids, they often fail to succeed because they don’t move form soft intentions towards a true program or process of financial education, tailored to the age and interests of their children.

~ The prime age range for children to learn and absorb the best money skills, are between the ages of

6 and 14’

Practice Makes Perfect

Children who will inherit significant wealth, require preparation. Balancing a checkbook and understanding compound interest is one thing, but managing assets is quite another.  

One way to engage children is to play off their passions; otherwise, financial education will feel like classroom instruction. Family wealth counselors work with families to identify something their children already have an interest in, and are willing to spend time pursuing such as a favorite sport or activity. From here a learning plan is then developed and integrated into the child and family’s life, built around that child’s specific passion or ‘theme.’

Another approach to spark a child’s interest in financial matters is by taking advantage of special group events. This month for example, there is a mother-daughter weekend called “Fashion and Finance” in New York. The purpose of this weekend event is to encourage and support young women to engage in their own financial development.

The end goal is to help each family member of the next generation to have individual economic vision, and the skills to realize it. While most families want their children to understand basic concepts and financial terms, kids need to go beyond the introductory level to incorporate family values, such as those related to charitable giving or volunteering, and their particular interests in participating. This positioning itself evolves as your children mature, and become more focused on their own genuine interest in money, finances, saving, spending, and ultimately – investing.

Consistency is Key

When a family does not truly provide the level and type of direction, environment, activities, and learning that their children need regarding money management, it can easily be taken for granted that if their children are already proficient at tennis or the clarinet, they may be proficient in everything they do. However, the children of affluent families need regular lessons, a great teacher, practice and consistency. By incorporating the “passions” and interests of your children – at any age – you will get results.

~ Preparing your next generation for their upcoming responsibilities of wealth management should be an ongoing, consistent, practiced process.