It can start when your son or daughter asks “are we rich?” Do you disclose everything? Nothing? How do you say “no” when you can basically afford just about anything that you or the kids want? These are some of the most challenging questions affluent families face as they weigh the benefits of having their wealth andwanting their children to be good stewards of their inheri­tance, while maintaining the values of prior generations.

I’ll steal another phrase from the famous Crosby, Stills, Nash, and Young song: “Teach your children what you believe in…Make a world that we can believe in.”

You send them to great schools, to play on teams, to experi­ential camps, and look for other growth opportunities, however, are you providing your children with the financial education and with the straight forward talk about your family’s wealth they need? I would like to address how and when to talk with your children about your family’s financial values.

Here Are a Few Thoughts

Be honest with your children. Talk with them at an age ap­propriate level about your family’s wealth. They are smart. If you tell them: “No, we are not rich,” and you buy a new car every year and own three vacation homes, they will know something does not add up. Tell them about how your family earned their wealth. Is there a multi-generational story? You can use this as an opportunity to talk about hard work or pushing for some­thing you believe in. They will have greater appreciation for the effort you and your family have undertaken to achieve success.

Walk the walk. If you want your kids to be responsible with the almighty dollar, they will do just as you do.For bet­ter or for worse, children are wonderful “mimickers”. This also means saying “no” to them at times, giving them tasks of their own in order to receive an allowance, or perhaps involving them in a hands-on charity event.

Help them learn. Teach them about the operations of your business, how to save, or whatever else is important to your family. When they are young, make use of the “3-jar technique” — one for saving, one for spending, one for charity. It actually works! As they get older, set budgets with your children, estab­lish checking accounts and investment accounts for which they are responsible. Bring them to work with you to expose them to your daily routine. You might even consider introducing them to your advisors for some education on the markets, accounting, law, etc.

Encourage their curiosity. A child at 7 may want to run a lemonade stand but at 17, may want to and need to intellectually find a part time job or internship. At each stage of development, encourage their interests and help them take on new responsi­bilities. These children, despite the family wealth, will have to make their own way and make decisions. Helping your children grow, reach, explore, and develop financially will not only ben­efit your children in the long-run, it will assist your family in achieving its goals, both financial and non-financial, and pre­serving its values.Communication, verbal or non-verbal, will equip your children with financial and decision making skills as well as the confidence to succeed on their own.

As a multi-family office serving ultra affluent families, Wanger OmniWealth addresses these issues and many more with clients. While each client faces unique opportunities and challenges, we have a robust solution set to meet their needs, both financial and non-financial. Specific to the topic of edu­cating children about financial matters, we often partner with our friend Joline Godfrey of Independent Means. She and her team work with families to formulate and execute plans on how best to educate the multiple generations of a particular family about their wealth. In her book, Raising Financially Fit Kids, Joline states: “Financial literacy is economic self-defense. And our collective responsibility as caring adults is to arm the next generation with the skills and knowledge they need to handle themselves in a world in which financial safety nets are being replaced by the imperative of financial self-sufficiency.”

In the meantime, more is more — talking, that is. Trust your children with family knowledge, financial education, and the opportunity to explore. This financial education will de­velop over time and will mature as your children mature. You never know — you might have the next super-charged entrepre­neur on your hands!

If we can be of assistance with this process, or put you in touch with Joline Godfrey, please let us know.

Suzanne Carrier Campion, Office Managing Director,
Wanger OmniWealth, LLC