Family Financial Values – What and When are You Teaching Your Children about Financial Literacy
Every family has its story to share. We come from diverse backgrounds that have molded us into who we are, and thus, our family values. Hard working families can range from those that built businesses, climbed the corporate ladder, served as civil servants, labored blue collar occupations, or performed odd jobs to make ends meet.
Often these histories shape not only our character, but financial family values that are deeply rooted within day-to-day life. Many times, these values are subtle without ever being proactively discussed.
Do any of these statements sound familiar? “No, we can’t afford that.” “Do you think money grows on trees?” Or the other side of the spectrum: “Sure, you can have whatever you want”.
Where does your family fall on the spectrum?
Why are Family Financial Values Important? What’s the Point?
Our relationship with money is emotional and can act as a catalyst for positive or negative experiences.
A scarcity mindset can cause undue anxiety within us and our relationships, while an unbridled lack of appreciation for the value of money can bring financial strain.
Alternatively, a healthy attachment to money can facilitate lasting memories and meaningful life experiences.
So how do we talk about it? What is financial literacy? Is it simply to teach our kids to budget, save, and invest until they retire? Or is it more than that? Could it be that it’s more about developing a healthy relationship with money as a tool for fostering a desired lifestyle?
Let’s look at a multilayered perspective of financial literacy...
Fundamentals
Grasping core concepts provides the foundation to develop financial literacy. A common critique of the schooling system is the lack of financial education. While this might be true, it’s still a family responsibility to not only teach children about budgeting, savings, and investing, but to walk the walk.
It is imperative that children understand that the life you provide them is not happenstance but rather a thoughtful, deliberate plan. It shouldn’t be “Mom and Dad’s Plan”, but rather, “The Family Plan” where everyone is involved. For children, this is a shift from being a victim of “yes” or “no” to being an empowered family member that is part of the process that leads to life-long skills.
This baseline provides children with the tools to understand finances and to encourage a healthy awareness that money is to be managed, not feared.
Questions to ponder: Where to start? What are the important concepts? What did I wish I knew back then?
2. Milestones
The next level for children to understand is that wealth helps us achieve aspirations that we have in life beyond the day to day. This ranges from hobbies to trips to ambitious goals to a college education to an unforgettable wedding to charitable work to retirement.
While hitting these milestones is exciting, the quality of the experience can be affected by the financial resources we have available. This awareness provides perspective on what is or isn’t important as they navigate the delicate balance of the gratifying present moment with the long-term big picture.
Questions to ponder: How do we practically plan for these events? How is saving for retirement different than a life experience or college?
3. Freedom
Financial freedom is when family wealth takes on a whole new meaning. This is where financial literacy from the first two levels produces peace of mind. At this point, we can spend more of our most precious currency—time—doing what brings us the most meaning in life.
Imagine having the latitude to no longer have a schedule to adhere to, but rather, scheduling the day you want to have without financial stress.
While we can certainly give away more money, we can be even more generous with our time, energy, and attention to loved ones and meaningful experiences.
Questions to ponder: How would I want to spend my time if money was not a hindrance? How will I know when I reach this point?
4. Legacy
The greatest transfer of wealth in human history is happening now, and with that comes major responsibility. Have you raised your children to wisely manage their inheritance? Maybe you are on the receiving end. Do you feel equipped to steward family wealth and set the example for your children?
Leaving a legacy is not having your name on a plaque on a park bench or building. It is how you and your contributions to life live beyond your time on Earth. What did you do with your milestones and freedom? Did you accomplish your personal life purpose? Were you a blessing in people’s lives?
Your legacy will be celebrated and live on through the next generation.
Questions to ponder: What do I want to leave behind? If I am giving, have I equipped my loved ones with the proper tools to handle wealth wisely? If I am receiving, have I asked the big questions and feel confident in carrying on family legacy?
Takeaway
Financial literacy goes beyond the numbers and is a lifelong learning process from childhood to maturity. It’s about lifestyle and meaning. It’s about seeing the here and now as well as the bigger picture. It’s about enjoying life and bringing joy to life. Family wealth should reflect family values that live on beyond us.
According to a Chinese proverb, “Each generation will reap what the former generation has sown”.
How will your family write the next chapter of its story?
