Money and wealth aren’t generally considered to be topics of conversation at the family dinner table. Few of us have experience with how to bring up money and even fewer know how to make the conversation go well. Apprehension can be magnified when significant family wealth is at stake.   

“Having significant wealth can be a blessing for you and your loved ones, but the majority of affluent parents raising children express uncertainty about when, how, and how much to share with their children about the family’s assets,” said Emily Bouchard, head of the Hawthorn Institute for Family Success at PNC®. “Their biggest fear is that if their children know about the family wealth, then they will be robbed of pursuing their careers and passions and instead become ‘waiters’– waiting for their inheritance and not flourishing as productive, contributing members of society.”

Talking to your children – no matter their age (child to adult) – about money can provide reassurance and emphasize care and concern for their future financial well-being. A conversation about money requires a special level of trust. Consider these keys to having a successful money conversation with children.

Build your comfort level

Before you can talk to your children about family wealth, it’s important that you first understand your own emotions about money and family and how you want the two to coexist. With that understanding, it can be easier to have more honest conversations about money that sets your children up for success in their future relationships - including their personal relationship with their finances.

“Research shows that families who talk transparently about money are likely to raise children who are more confident and competent with stewarding family resources,” Bouchard said. “Money is often considered a taboo topic that people really struggle to discuss openly, and that certainly includes adults with their dependents. To help children become financially successful and make responsible financial decisions, it is important to openly talk about money.”

Structure the conversation

When the topic of money comes up, take a moment at the outset to clarify your goals as a family and what you want to accomplish as a result of the conversation. Slowing things down right at the beginning will help everyone feel comfortable and sets the tone for the rest of the conversation. Create an environment where everyone is included and free to share their questions and opinions.

It’s also important to tailor your conversation to the appropriate developmental stage of your child or dependent. Children observe money behaviors from the earliest stages of life through watching everyday activities like shopping at the grocery store, withdrawing money at an ATM, or logging on to pay a bill. Parents have an opportunity to control the narrative around these early observations and help connect the dots between money behaviors and the family’s financial values.

As children age, they gain access to additional resources outside of a parent’s or guardian’s control, through gifts, part-time jobs, entrepreneurial efforts, or even day-trading online. As children gain their own financial resources, they will begin to interface differently with money, and build their own beliefs and understanding about money that will not necessarily be tailored to their family’s specific financial beliefs and values. Openly sharing about your family’s financial history, current situation, and future goals can help children make better independent decisions about money and wealth as they reach adulthood.  

Know Your Audience

Before you reveal the numbers around your wealth, spend time getting to know each of your children and their levels of awareness and curiosity about money. Provide them with age-appropriate opportunities to learn and make decisions with money. An allowance or individual bank account for children to experiment with money gives them power, control, and responsibility. Children learn best from doing and from making mistakes, which can prevent more costly mistakes when they are older.

For older children or those entering adulthood, practical training on cashflow, credit cards, investing, and budgeting with their fiduciary advisor can be good steps. Adults should develop their own relationship with their banking team and trustees. If parents are the trustees, they can work collaboratively with their advisors to determine the best ways to empower beneficiaries at the time they learn about their trusts.

“It helps when children come to a place where they can understand and communicate to the world at large around concepts like how things are purchased, where money is spent, when it is saved, and how it is invested,” Bouchard said. “If parents don’t help control that narrative, children are left to fill in the blanks on their own, often with misinformation or misunderstanding about who they are in the family’s bigger picture.”

Reflect on Your Financial Values

Parents often find it meaningful and useful when they take time to determine their core values. What is the purpose of your wealth? What is important to you as a family? Talk to your children about what you want your family’s wealth to achieve from a lifestyle, inheritance, and philanthropic perspective. Reflect on how you use money, the type of assets you accumulate, the type of debt you use, and how you pay it off.

One way to achieve this is through an ethical will. An ethical will provides context about the financial resources you are providing to your family. By clarifying and codifying your reasons for the amounts, the distributions, and the choice of trustee, you inform your beneficiaries about their role, their responsibilities and their need for financial literacy. By sharing these thoughts and feelings with them while you are alive, you give them a chance to ask questions and express their feelings, hopes, dreams and concerns as well.

“Children learn by what they observe and what they experience,” Bouchard said. “The more consistent parents are with their narrative and their actions, the more likely their values will be transferred with their wealth.”

Make it relatable

Knowing when and what to talk about helps lay the groundwork for money conversations. Being aware of how to talk about money is essential to having the conversation go well. Money is often accompanied with strong emotions and people have a variety of reactions that are all valid. Some individuals find it easy and natural to talk about money, while others may feel anxious, insecure, or overwhelmed. If you’re uncomfortable, acknowledge your feelings and resistance, as this creates more safety and trust. You can use your uncertainty to welcome learning together as a family.

“We reassure clients that whatever they are feeling, they are not alone as there are multiple books and resources for all the parents who are working through those same emotions too,” said Bouchard. “While every family’s financial path is unique, we can help facilitate the trust-building that is so important to having a successful money conversation with your children, whatever their ages are.”

Get Help from an Advisor

Talking about money is evocative and can be emotional, especially when family and children are involved. An advisor or wealth strategist can help frame an initial conversation that tackles important issues and helps the family identify values and goals for family wealth. An advisor or wealth strategist can also serve as a sounding board for ideas or questions.

While it’s important for parents to help influence the family narrative around money, it can be beneficial for kids to have a separate experience or entirely separate advisor. Children may have special concerns or emotions around money. A professional can offer a safe space for children to ask questions in an environment appropriately scaled for their age, maturity and level of interest.

Ultimately, the most important part about a money conversation with children is providing an open space to have a dialogue as a family about money. While it may seem daunting, it’s important to remember you’re in the midst of an evolving process and help is available.

“It’s understandable that many parents don’t know where to begin and can often feel overwhelmed when it comes to talking about family wealth,” Bouchard said. “By taking small, deliberate steps to build your confidence, you set the stage to empower your children and build their competence with money.”