4 Reasons Parents Don’t Discuss Money (and Why They Should)

222

“It was so overwhelming that I nearly died,” she said. “At the same time, my older children were heading into the work force, and I thought we weren’t giving them the right financial skills.”

Since then, she and her husband have held annual meetings with their children, whose ages now range from 18 to 31. Their goal has been not, as Melissa describes it, to suddenly shine a bright light in their children’s eyes but to gradually reveal information, like a dimmer switch slowly lighting a room.

They began by outlining their own feelings about money and where it could help and hurt.

“It’s such a valuable process to communicate and have respect for all members of your family,” Melissa said. “That’s really been a surprise to me; if you can give them skills, you’re guiding them and they’re learning.”

You Do Not Come From Generational Wealth

Families that inherit wealth often continue to be wealthy because of the conversations they have. It’s what they have done for generations.

William T. LaFond, head of family wealth at Wilmington Trust, which was founded in 1903 to manage the du Pont family’s wealth, said many of the firms’ clients had preserved their wealth past the third generation because they talked early and often about it with their children.

These families, he said, follow a three-step process: Educate their children about finances and wealth, communicate the family’s values, and hire good advisers.

Those who do not succeed in passing money along successfully often have silence to blame.

“The generation that receives the money has no education and no skills and wakes up like a lottery winner,” Mr. LaFond said. “You don’t want your kids to be lottery winners.”