The misconception that money conversations is all about how much money “we” have as a family and what our bank balances are, is likely what has stopped families having candid conversations about their combined financial situation. Money conversations is not all about “how much” it is about coming together and getting to know each family member’s understanding of money so as to build a common mission around your finances as a unit.
“No legacy is so rich as honesty.”
― William Shakespeare
Growing Up, I cannot recall my parents ever discussing with my siblings and I about money. In most African households some conversations were (and probably still are) taboo and top that list were conversations around money.
My siblings and I still joke on how we would be gifted cash by relatives, then forced to pass the cash on to our parents for “safekeeping” never to be seen again and you could not ask! After all, you were being housed, fed and schooled by the people safeguarding your gift money.
When To Start:
Both children and adults learn a lot through observation. As a parent, I have had to countless times, check myself before certain actions and think of how my children would interpret my intended actions. In the same way, children learn more about money not by what we tell them but by observing our money habits as parents: do we budget, how are our spending habits, are we always fighting about money. These observation skills start from a very young age and so money conversations should not be withheld until they are older but start as early as preschool age. The depth of the conversation of course will grow from basic to in depth with age but the consistency needs to be maintained from when they are young to adulthood.
What To Talk About:
Conversations start from as basic as looking & touching money, availing where possible the different currency denominations in circulation in your country and explaining the features of money in simplified terms to the young ones. As they grow older, the conversations become more in-depth – introduce savings and investing, explain about bank accounts, mutual funds, sign up for child friendly savings App when they’re of age and allow them to start thinking of ways to make money. At this point encourage your children to share their thoughts on money and have discussions round it. These open discussions help us as parents gain insights into the money stories our children are forming.
Why Talk:
Healthy money mindset is a key ingredient in growing generational wealth. Money conversations from young age ensure the children grow exposed: develop understanding of family’s financial mission, goals and participate in various ways to manage and grow the family wealth. Family discussions about money create the money management confidence in family members needed to ensure that wealth can be successfully passed onto future generations, preserving the family legacy.
It’s never too late, Start that conversation …
The earlier started, the easier it becomes as they grow up. With each stage of life, the conversations become more intense and engaging because as the children grow they start asking more questions and request for more opportunities to be financially responsible of the money in their care then. In the same regard, don’t think you missed the boat, the right time to start is NOW as opposed to tomorrow or never. Remember, promoting habit of Open, honest family conversations on money more often protects the younger generation from making the same money mistakes you made and this sets a more secure financial future and they pass that on to the next and next generation.
