Family wealth can make life easier at times, but it poses its own set of challenges when it comes to raising children. Affluent parents want the next generation to be self-sufficient, responsible and driven. Many fear, however, that their wealth will do the exact opposite, causing entitlement, a lack of motivation and accountability. A negative path isn’t inevitable. Through frank conversations, being clear about their own values, and allowing space for mistakes, affluent families can raise independent, resilient children—and strengthen relationships along the way.

1. Break the silence. Shying away from conversations about money can result in the same problems as avoiding talking about the birds and the bees. If you’re not teaching your kids, they will get their information elsewhere—and there’s a lot of misinformation you want to protect them from. While initial conversations may be awkward or uncomfortable, they are far better than no conversation at all. And you don’t have to go it alone; recruiting an independent third party, such as a financial advisor, to help facilitate a family meeting can make the process easier. Try starting with a simple conversation about how a child can handle his or her first allowance. For younger children, this can provide guidance on how to be good stewards of their own money and how to live within their means.

2. Define your values, goals and expectations. The best conversations about money engage beyond dollars and cents. Parents can use family finance discussions as an opportunity to share their values, while allowing children to reveal their own hopes and fears for the future—in short, it’s a chance for the whole family to become closer. To optimize these conversations, parents can do a bit of homework in advance. The more you know about your own values, goals and expectations around money, the clearer and more confident you’ll be in these conversations.

3. Set the tone for an open, respectful conversation. Share your own money story with your children, focusing not just on your successes, but also on your failures. Explain how hard you worked to get your business off the ground, or how you bounced back from an early investment mistake. Children tend to see their parents as all-powerful, making it difficult for them to imagine what a path to success might look like. Opening up about your decisions and how you’ve arrived to where you are today can help your children understand you better—and guide them as they begin their own financial journeys.


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