How do you do you discuss wealth with your kids?

[mids2019]

If you have a significant wealth in the family how do you approach the subject with children especially as they reach teenage years and are becoming more financially aware? If when discussing finance and economy in general do you talk in a mature fashion about investments, property, pensions etc. or do you to an extent 'shield' the child about your financial position to avoid the stereotypical 'spoiling' of a child or potentially a decrease in ambition due to knowledge there is a safe bedrock of money within the family.

So you think talking about finance to children will reveal the nature of wealth disparity in the country and maybe burst a bubble of childhood ignorance about the world of does this needs to be done?

Interesting question.

Our DC is 4 not a teen, and I certainly wouldn't say we have 'significant wealth' - DC will definitely need to work as an adult! But DC will attend private school, we own our home, we don't worry about money generally which makes us vastly more privileged than many.

We are generally pretty open about money and say simply that we have enough money to live a nice life, some people have much more money than we do, some have much less and don't have the same lovely things that DC has.

Although in answer to being told recently that they couldn't have endless new toys every day because they cost money, came the reply "couldn't you just become a pilot and then you'd have lots?" 😂

Clearly not the same level as someone for whom money is no object but in general, I think the more open we can be about money and the doors it opens (or doesn't) the better.

i have wealth and now adult DC. I’ve always talked to my DC about money - it’s meaning for people at different stages of life, and different contexts, about how money “works”, talking about government budgets and how these effect different people differently, about the various other reasons and meaning for work beyond money, about taxes and how they can be hidden or visible, about budgeting. They grew up with friends from much wealthier and much poorer families. My DC thank god are not “spoiled” at all - one works in Blue Light services the other is an actor, are very left-leaning (as am I), and recognise their good fortune in life, not just financially but educationally (state, with supportive parents) culturally (huge cultural capital), and physically (healthy).

opennness and appreciation of what they have does not spoil them imo. Also, we simply didn’t have a high expenditure lifestyle- second hand clothes, cars, Easter AI hols were the norm.

We don’t have a lot of money now but will inherit fairly well when the time comes, we also have invested for when the kids turn 18. They vaguely know about this I suppose but it’s not been discussed in detail.

However, we do talk about day to day finances eg how much the car or boiler cost to repair, holiday budgets, meals out etc. My son would happily order a chateaubriand while everyone else is fine with a panini - obviously it’s a straight no! We also make them come to the supermarket occasionally so they can see why we buy certain things over others.

I don't have wealth myself, but one thing I really appreciate from my own upbringing is the very strong notion that you have to pay yourself first. IE you always make a cushion for yourself, spending all of your salary is not an option and debt is very frowned upon. So any money you get, whether it be a pound from a grandparent, something has to be put aside first. The idea of 'spend now and worry about it later' that I see many people my age with was very irresponsible, and I'm very grateful for that now.

We have a comfortable level of investments savings and pensions. We have an adult DD and 2 teen DS. We are open about our position and their place in it. To avoid IHT we have begun to move cash to DS’s with a view to using it to pay off student loans or a deposit on a house. We have a family spreadsheet which tracks all assets and accounts and they update it with me every month. I am encouraging them to learn about investments by opening S&S LISA for them when 18 rather than a cash one.

Yes there is a risk that they use the money for other purposes or have less ambition but so far they have not demonstrated this at all.

Different with DD as she is married and already a home owner and had very little student loans in comparison. We weren’t in a position to help her as much when she was younger but she also grew up in a time when the future for young people was not a financially challenging. She does however know that we have support available should her circumstances change or if for eg she wanted to start her own business.

My intention is to help them all as and when they need it and not hang onto it till the end to pay HMRC a big chunk.
They will be responsible for their own life choices but I want them to make those choices in full knowledge that we can support them.

Wealth disparity is a fact of life and they do need to understand this. I don’t believe in keeping children ignorant about the world but in exposing reality gradually in an age appropriate way. We talk about disparity openly and make a point of sitting down with them at Xmas and Eid (mixed faith family) to agree what donations we can make and to whom.

Interesting question. We are not wealthy and have lived most of our adult sons' life pay day to pay day. He, however, is well on his way to being wealthy.

So we have discussed pensions with him. He has a LISA. We encourage him to invest. We have also suggested that he should see a wealth manager (we didn't know they were a thing, but our friend is one).

We have also instilled a work ethic in him and been clear about the need to be able to support yourself and the advantage of having savings. We have also tried to teach him that it's ok to spend some money, that you can't take it with you when you're gone, bit to be mindful of lifestyle creep eating away at your money.

All in all I think he will be ok!

Thanks for the replies and they all make perfect sense.

I try and raise things like expense and show we have to be financially prudent as that seems common sense. I think my eldest daughter at times possibly want a more luxury clothing items and is possibly with a group of friends who get a bit precious about getting clothes from New look, Primark etc. We have not discussed investments as such yet but I am sure it will come.

Definitely agree with all the posts about financial prudence no matter your wealth or lack of it.

@strawlight Your comment about the chateaubriand and the panini made me laugh as that's exactly the sort of thing my DS would have tried did as a teenager!