How I’m educating my kids about money

How I’m educating my kids about money

How I’m educating my kids about money 150 150 Ian Granter

I’m currently 55 and would like to be in a position to retire in the next decade. With that in mind, my wife and I have started to prepare our two children, who are in their early 20s, to start thinking about the next phase of their life as well. The world is very different now than it was for my generation and we want to make sure they’re prepared, as much as they can be, for what’s ahead. Some of the things we’ve spoken to them about includes saving for the short and long-term, the property market and my own estate planning.

My son and daughter will both finish university soon and will be looking for full time work with the potential for going overseas and then moving out of home at some stage.To have this life experience and enjoy it they need to have a steady income. So we’ve been talking to them about money and why they need to save for the short-term and the long-term. In these conversations we talk about the basics of financial management. This has included setting up accounts so they can save a bit from their part-time jobs for investing, but also having fun and travelling.

Sometimes it can be challenging to have these conversations as a father, so I asked a friend to talk to them. While much of what he talked about was similar to the things I did, it seemed to hold more weight coming from an independent person. It was great to see how that meeting opened their eyes to what investment options are available to them and has led to them having better conversations with me about money as well.

Some of the key things that we’ve covered in these conversations include how to take conservative risks through a balanced portfolio. Because interest rates are low, my son has shown an interest in shares as a way to diversify his options to grow the money he does have. So I’ve helped him understand why it’s important to invest in a diversified portfolio rather than putting all his eggs in one basket.

Property is another area that I’ve spoken to my children about. It’s so different now than it was for my generation, so I think it’s important that they understand things like the Royal Commission, why credit policies are tightening up and how that will affect their ability to purchase a property. While they’re nowhere near ready to purchase a property yet, they’re at least starting to think about it now so they can plan in someway for their future.

Another area that we’ve talked a lot about is estate planning.  As part of this conversation, we’ve spoken about power of attorneys, executors and trustees and how they will be protected if we get sick or something happens. We’ve also put in place wills for each of them already because they inherited some money from their grandparents.

This is something that can be really difficult difficult for families to talk about but I know how important it is. I’ve seen clients in their 70s and 80s who haven’t spoken to their children about their own estate planning and know how much harder it can be for the family to deal. I don’t want my children to deal with issues of jealousy or being concerned about money after I’m gone, so my wife and I have been open and honest with them about where they stand now.

By having open and honest conversations about money, even if it’s a bit uncomfortable at first, I believe we’ve helped  give our children a good understanding and direction in life to help them achieve the things they to want to in the future.

Ian Granter is Director of Client Services at Viridian Advisory

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