Have you ever noticed that one generation after the next seems to remain poor in some families while wealth or at least financial comfort appears to run in others? Although some people might write this off as luck or privilege, it goes much deeper than that. Financially comfortable families prioritize teaching financial values and literacy to their children and grandchildren starting as early in life as possible. However, it’s never too late to make different financial choices and share that wisdom with the generations who come behind you.

Put Everything in Writing

Does your family have a financial guide? This type of document is a written statement of family financial values as well as the steps each member takes to achieve them. For one family, remaining entirely debt-free might be a driving value. For another, the ability to finance each child’s college education or donate large amounts to charity could be a primary concern. Although the values will vary by family, the important thing is to write them down as a guiding principle. This helps to preserve people’s memories when they forget what their parents or grandparents told them.

What to Include in the Family Financial Guide

After creating the family guide of financial values, the next step is to include best practices for how to achieve or maintain them. Information to add here could include any of the following:

A strong emphasis on financial discipline, including saving money and living within a person’s means to avoid going into debt.

Going beyond the emphasis of building wealth to protecting it by investing in appropriate insurance policies.

Understanding how to balance risk to avoid jeopardizing the family’s financial future by risking too much of its money at once or acting so cautiously that the family wealth never grows.

Strategies to help avoid fraud and scammers looking to take advantage of younger people with money to invest.

Stressing the importance of willingness to devote time to financial research or pay for the experience of a certified financial planner. Older generations should also teach younger generations how to evaluate a financial planner before hiring one. This includes asking about credentials, designations, and certifications appropriate to the field of financial planning.

Respecting the right of each family member to make individual investment decisions based on the financial education he or she has received up to that point. Family members should realize that everyone will have a different tolerance for risk as well as a desire for different investments even if they received identical information from earlier generations.

Need Help Formalizing Your Family’s Financial Values?

Documenting something as important as the financial values of your family isn’t always an easy task. We invite you to benefit from the years of experience we have at KGBV Advisors to get your family’s financial information down in writing. Please complete this contact form or call our Mount Pleasant, South Carolina office at 843-951-9151 to request your initial consultation.