Financial planner encourages parents to open up to their children
JOBURG – Children need to be primed to handle the level of wealth that will be coming their way.
Francois le Roux, a certified financial planner at Old Mutual private wealth management, said conversations about money make most parents uncomfortable.
Le Roux said it’s no surprise that many parents struggle to open up about their financial situation with their children, who are likely less versed in the socially-accepted hush nature of such matters.
He said these dialogues can be particularly tricky for high-net-worth families who fear that disclosing their wealth to their children may result in them becoming demotivated.
While these parents may think they are encouraging hard work and stability by not disclosing their wealth to their children, they may, in fact, be fostering a sense of financial ignorance.
“Determining when, in what way, and how much to divulge to your kids regarding family wealth is never easy, but by keeping them in the dark, you run the risk of raising children who are ill-prepared for their future financial situation,” said Le Roux.
“Children need to be primed, at least to a certain extent, to handle the level of wealth that will presumably one day be coming their way. That’s not to say that a parent’s concern around the impact this money will have on their child is unjustified.”
According to Le Roux, this is why any discussion of wealth you have with your children should always be paired with deliberate conversation around the values and responsibilities associated with that wealth.
He said these values, which should be introduced and discussed in an age-appropriate way, include budgeting, generosity, use of debt and, above all, the notion that money is a tool, not a toy.
Le Roux said regardless of what is discussed, as a parent, it is your attitude and behaviour towards your finances that will likely form your children’s approach towards money.
“Explain that the journey to accumulating wealth, and thereafter managing it, is an onerous and complicated affair, requiring hard work, focus and great skill.”
Le Roux advises parents to speak to their children about family values and beliefs around money in their formative years.
“As a parent, while emotional support can be limitless, financial support should not be. Whatever pocket money allowance or additional money is given to a child should come with clear parameters about its application, use and enjoyment. It should be clear that this allowance comes as, and remains, a privilege and not a right.”
Details: melissa.man@epicmslgroup.com.
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