Conversations You Should Have

Blog post #484

Hopefully many of you will gather with your family or extended families this Memorial Day weekend. The discussions at these gatherings are generally the same: updates on kids, grandchildren and relatives, health, politics, sports, food and restaurants. We can even include future travel plans this year!

In most families, however, the topic of money is rarely discussed. These types of discussions should be occurring.

We all have unique and different family backgrounds and stories about money. I did not get an education about money or investing from my parents. We grew up as a lower-middle income family. I know that my mom struggled financially and worked very hard to support me and my three sisters. As there was no extra money to invest, I did not get the opportunity to learn about investing from my parents.

While in high school, I often talked with my mom about how I would pay for my college education, how much I had to work and save for my college education.

Fast forward 40+ years… and now I advise people professionally about their money. We have many discussions about your finances, your goals and how to deal with the volatility of the world and financial markets. These discussions are critical, and the educational aspect of these conversations hopefully makes you, our clients, better and more successful investors.

I want to emphasize having conversations about money between generations. These can be uncomfortable discussions, but they don’t need to be. Start gradually. Find a topic to begin with. Dip your toe in the water. If these discussions take place, great sharing and important long-term benefits can result. They can be some of the most memorable family conversations you can have.

  • Talk to your children or grandchildren about your financial successes, as well as your financial mistakes. Be willing to share the good and the bad.
    • Be vulnerable.
  • Share with them how you were able to save money. When did you start saving?
    • What kind of sacrifices did you make, for your long-term future?
    • We gave up extravagant trips when my children were young, in order to save money for their college educations. They have benefited from that today, which we have talked about, as they don’t have student loans.
  • Talk about what types of investments have worked out (individual stocks or mutual funds?) and what types of financial advisors you have used.
    • Why were some successful and some not as good? What was the difference?
  • You can talk about credit cards, reward points or password security. Just begin the conversation.

A possibly harder, but important conversation, deals with talking about your estate planning. Once an estate plan is completed, it usually becomes a set of documents that remains locked in a cabinet. Depending on your age, and the age of your next generation of family, you could discuss your estate plan. This can be done in broad terms, without focusing specifically on the numbers.

If this kind of estate planning discussion is relevant to your stage of life, I’m suggesting that parents and grandparents sit down with their next generation, or generations, and talk about their “family finances.” What is your intent? How will things be handled? By whom? I’m encouraging you to make your estate plan real. Make it a living, breathing document and set of plans. Do it now, while you are healthy and able to have the discussion.

Not everyone is comfortable with this type of estate planning discussion. If you want to have this conversation with your family and would like our assistance, we would be pleased to join your family for this discussion.

The telling of stories is how family histories are remembered and past down to future generations. Discussions about money, how you saved and possibly sacrificed, are worthwhile. Sharing the good and the bad, the mistakes and the successes, are important as well. Parents and grandparents should share their financial and investment lessons with their next generations. These would be very valuable, memorable and impactful.

Do it sometime. Anytime. But sooner rather than later.

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