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Preparing the next generation to engage with their finances

How to help with money management and financial literacy

Passing on the benefit of your experience to your children or grandchildren is crucial for their future success. However, financial planning can be complex, and even the most knowledgeable individuals may need help.

Breaking down barriers around talking about family wealth takes time and patience. It requires ongoing conversations and a willingness to address any fears or concerns that may arise. By starting early and progressively educating the younger generations, families can establish a foundation of knowledge and create a legacy of open communication and responsible wealth management.

It is essential to encourage younger family members to engage with their finances from an early age. These tips can help lay a strong foundation for money management and financial literacy in the next generation.

1. Start sooner rather than later: Begin conversations about money when children are preschool or primary school age. Teach them basic concepts such as saving, spending and the value of money. As they age, introduce more complex ideas like budgeting, investing, responsible credit use and philanthropy.

2. Share stories and values: Discuss the family’s history, values and journey to wealth accumulation. Sharing stories and personal experiences can help younger generations understand the importance of responsible wealth management and its associated values.

3. Focus on what interests them: Children learn through observation, play and experimentation. Find opportunities to engage them in money-related topics based on their interests. For example, if they love playing Minecraft, use it to teach them about budgeting and earning virtual money.

4. Identify personal goals and priorities: Increase their responsibility as they get older by providing pocket money or an allowance. Encourage them to make spending decisions based on individual goals and priorities. It’s okay to acknowledge disappointment when they can’t have everything they want.

5. Gradually disclose information: Start by sharing lower-level concepts and provide more detail as the younger generations grow older and demonstrate a greater understanding and maturity. This will help prevent overwhelming them with information while allowing them to develop a solid foundation of knowledge.

6. Learning from mistakes: Allow children to make and learn from age-appropriate mistakes. Minor errors now can prevent bigger ones in the future. Help them reflect on their decisions and find ways to do things differently next time.

7. Have honest and age-appropriate conversations: Encourage open and honest communication within the family. Make it clear that discussing family wealth is not taboo and that everyone’s perspectives and opinions are valued. Ensure they understand the family’s financial situation is not their fault or responsibility.

8. Approaching financial challenges: Children pick up on their parent’s emotions. Evaluate your feelings before discussing financial matters with children. Seek support from a friend or family member if needed. Show them how to approach economic challenges with a proactive mindset.

9. Set boundaries around money: Money should not be used to control family dynamics. Avoid overpromising or overindulging children’s wants. Help them appreciate non-materialistic things like shared experiences and relationships. Set boundaries around money and explain the reasons behind them.

Need guidance on helping young individuals develop good financial habits?

By taking these steps, you can help young individuals develop good financial habits, make informed investment decisions and set themselves up for a secure financial future. Remember, financial education is an ongoing process, and it’s important to continue learning and adapting strategies as circumstances change. For more information, please get in touch with us.

THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.

THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED.

YOUR OWN PERSONAL CIRCUMSTANCES, INCLUDING WHERE YOU LIVE IN THE UK, WILL HAVE AN IMPACT ON THE TAX YOU PAY. LAWS AND TAX RULES MAY CHANGE IN THE FUTURE.

Adam Reeves

Author: Adam Reeves

DipPFS Cert CII (MP&ER)
Independent Financial Planner, Wealth Manager, Director

Last updated on

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Adam was quick to assess & understand my situation, and was able to discuss & communicate in a very concise and simple way the various options available to me, taking time for me to understand and clarify where necessary. My understanding & knowledge of taxation & pensions has increased significantly allowing me to feel much happier making financial decisions for the future.

Rob – West Sussex

Adam and his team undertook in-depth research into our existing QROPS schemes and clearly set out both pros and cons of transferring the funds back to the UK. Having decided to go ahead with the transfer, Adam and his team worked extremely hard to facilitate the transfer. The QROPS pension trustees were not always the most professional or responsive organisation – however we were very grateful for the perseverance and commitment that Adam showed us as clients.

Jonathan – East Sussex

Adam offered a range of financial products , the one he suggested was affordable and proved to be a good choice.  Returns on investments have exceeded my expectations, based on Adam’s advice and guidance. Profits have enabled house improvements to take place.

David - Surrey

Adam arranged an appointment very timely, he explained his role and qualifications as an IFA giving me reassurance , we went through my retirement and investment goals. Adam discussed my options explaining in great detail, I felt relaxed during our discussions allowing me to fully understand my choices. I feel very confident in the financial advice allowing me to enjoy my retirement.

I was very happy with Adam’s recommendations and explanations of financial products which would suit my retirement goals, I feel this has helped me review and reduce my financial risk as I reach retirement, leaving me feeling confident that I can enjoy my retirement plans.

Ron – West Sussex

After initial meeting Adam put together a very detailed and thorough written plan. At our second meeting he went through the whole booklet and explained everything in layman’s terms which made it a lot easier to understand.

I am very happy with everything that was suggested and put in place especially with something as big and important as pensions. Adam and his team have taken a huge weight off my shoulders and I would highly recommend their services to anyone needing help with their financial planning and pension.  Adam couldn’t have been more helpful, and even came outside his normal area to meet me on a number of occasions.

Richard - Kent

Unfortunately I had to claim on my critical illness insurance due to my wife being ill and because of the sound advice Adam gave in acquiring this insurance we ended up being financially safe through a tough time.

Steve - Kent

Adam did a review of our financial situation, confirmed that Flexible Drawdown best suited our needs as a family, and then did all the research into the best product for us. He will continue to monitor it for me. He acted extremely promptly because we had a deadline for requiring the lump sum; went out of his way arranging meetings during non-office hours, was professional yet friendly and explained a difficult subject very well.

Clare – East Sussex

Adam did a thorough review of my pension policies, clearly explained how well they had performed, how flexible they were, how the market regulation has changed, and, crucially, what the tax implications would be if I were to leave them untouched. He accurately assessed my attitude to risk and recommended an up-to-date solution that will offer me the greatest flexibility at retirement.

Greg – East Sussex
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