Building Family Wealth Values in the ‘New Normal’
Throughout the current lockdown, families have shown up for each other—lending strength when needed and hope or laughter when situations are bleak. Above all, parents, siblings, aunts and uncles have stepped in and become teachers for one another.
Research shows that between the ages of five and eight, we are at our most impressionable. This is the time when a child’s value system is formed—and typically is when children spend the majority of their days in-person at school. However, due to our current homebound status, we as parents and leaders of the family have been given a rare chance to play a larger role in education. We are now, in many cases, the sole provider of social and economic lessons for our children.
As we navigate the realities of economic inequity, systemic injustices and mental well-being, it is important to involve the whole family in these conversations. Life is complicated and we must feel comfortable sharing our situations with each other. In my book, Business of Family, I suggest a sentence that families can use to initiate this conversation: “What does it mean to be us?”
This understanding provides an opportunity for families to define their core values and then decide collectively how to “live” them. I have often reflected on this question within my own life and have found my response evolves over time. Imagine what this means to your neighbor, your colleague, your childhood friend. Each of their families has a different dynamic—singular to them, making them the best, and the most qualified expert for themselves.
Self-awareness plays an important role in our personal finances. Families’ unique traits are expressed in spending patterns, amounts saved, charitable causes, allowances for children, college funds and more. We need open, transparent and flexible conversations with our family members about these economic decisions.
Hearing from other women in the financial and entrepreneurial space has reinforced the importance of family in making financial literacy more accessible. Building trust, starting an open communication channel and preparing your family for change is what will ensure that matters of wealth and worth translate into the next generation in more ways than one. Below are key ways that families can begin their own money conversations today. Let us not waste this opportunity to build a stronger, more caring generation.
Managing our personal finances requires making certain that our values are aligned with our goals, aspirations and business. This conversation should begin at home. The pandemic gives us the opportunity for parents to educate their children on crisis financial management—a skill that will pay off tenfold as they navigate their own lives. Building a strong unified value system ultimately breaks the cyclical taboo nature of discussing money. Being open about financial difficulties, as well as the successes, lifts barriers when it comes to discussing failure. Money is part of our lives, and we need to desensitize ourselves to speaking about it, how we use it, spend it, save it clearly and without judgment.
For parents, what was money like growing up? What financial safeguards and planning do we have in place? How might money be tied to emotions? What is our community context?
Start an Open Communication Channel
Next, take the time to honestly evaluate your family wealth and where you want to make a difference in the world. Discuss your shared interests, skills and experiences candidly and pair each sentiment with a potential solution. Interests in education policies, a background in global health, a passion for racial justice, experience with mental or terminal illness—exploring how your family is impacted by these causes and social issues enables you to move forward and begin to formulate a plan of action.
In fact, research shows that facing these questions as a family can help ensure that the value of generosity is passed down to the next generation. It’s critical to be intentional and open in conversations to pass on a legacy of giving and to raise children who want to make the world a better place.
Follow Up With Action
Once you understand your values as a family, the conversation naturally turns to: Now what? There must always be action following reflection. Discuss openly the steps you and your family can take to achieve your unique financial goals. This could be in the form of taking an online class, nurturing passions, teaching basic accounting skills, participating in philanthropic giving or starting a scholarship fund. As a family, you are now aware of what you want and, as such, are accountable to achieving this.
Both during lockdown and in our eventual “new normal,” the family unit will be the main source of reflection, knowledge and decision-making—playing a pivotal role in each member’s financial and personal journey.
Note: All opinions expressed by Linda Davis Taylor are solely her opinions and do not necessarily reflect those of Clifford Swan Investment Counselors. You should not treat any opinion expressed by Ms. Taylor as a specific recommendation to make a particular investment. Ms. Taylor’s opinions are based upon information she considers reliable.