Next gen financial lessons

For many parents, the issue of passing money from one generation to the next can be tricky to contend with, especially when it comes to making sure children are prepared to shoulder the responsibility of handling family wealth. Although conversations about money can be uncomfortable for some, the crucial element to inspiring financial responsibility undeniably centres on education and communication.

SET THE WHEELS IN MOTION

Every family’s dynamics and circumstances will differ. Typically, the best course of action is to begin the processes at an early age, by talking about a variety of age-appropriate topics to initiate the financial education process.

Initial discussions can focus on basic money management skills with reference to pocket money and introducing concepts such as ‘saving’ for school age children. As children move into further education, the emphasis will move to applying financial concepts such as budgeting and introducing other ideas, including investment principles.

GATHERING MOMENTUM

As your children embark upon their careers, they will quickly need advice and more in-depth knowledge on specific issues such as taxation, mortgages, pensions and Wills.

When they reach their forties, the final phase usually takes place, involving preparation for financial leadership. Discussions at this time need to be centred around the wealth-transfer process and future plans relating to the division of family assets.

KEEP TALKING

Today’s youngsters face many financial challenges. This increasing burden of financial responsibility intensifies the need to make the transfer of family wealth as smooth and successful as possible.