No matter how much or how little wealth you plan on passing down to your children or grandchildren, you should make it a priority to pass on your financial values to the next generation.
Be Open to Talk Finances
Thinking about and planning for life after we have passed is something we as humans often put off, and thus parents are often hesitant to discuss money and finances with their children. Unfortunately, this silence can have unwanted consequences.
Imagine a situation where an individual knows nothing about personal finances, and then they suddenly receive an inheritance of $10 million. Such an heir may find themselves wasting the money or leading a dangerous lifestyle if they're not ready for both the privileges and responsibilities that come with the money. Therefore, it is essential that you start preparing your heirs long before you pass away. Consider holding family meetings about finances and inviting financial professionals to join so they can pass on some knowledge to your children.
Teach Your Children to Save
It is essential that you teach your children the power and purpose of saving. One way to show your children the value of saving is by teaching them about compounding interest. You could promise to match their savings dollar for dollar. Receiving an extra $20 for every $100 saved will make your children excited about saving. Another way to encourage saving and to pass down values is to help your children determine what they are saving for. Even for adults, it is easier to set money aside when you know why you are saving. Building healthy habits early will benefit them in the long-term
Work and Allowance
As soon as your child is old enough to receive an allowance, you can start educating them about finances. Hands-on experience is often the best way for children to learn about finances. If your children are younger, an allowance for performing their chores is a great way to start teaching them about finances, saving, and spending. If your child is older, you could encourage a summer job so that they learn to put money aside.
The most important thing that you can pass on to your children is your financial values, not your money. Start teaching your children about finances when they are young so that they will have the knowledge and skills needed to build on any wealth you do pass down. For more information on passing on your wealth and values, don't hesitate to contact us.
