How to Talk to Your Kids and Grandkids About Their Financial Future

As a parent or grandparent, one of the most important life lessons you can teach your family is how to build wealth. Building and managing wealth are critical skills for those who want to live comfortably, reach their full potential, and do the most good in the world—but they’re not ones we teach in school. 

What’s more, our culture has conditioned us to believe that talking about money and wealth—even among family members—is taboo. 

But if we don’t talk about money with our children and grandchildren, we’re risking that they learn their wealth-building skills from less-than-reputable sources. We’re risking that they make a lifetime of impulsive financial decisions rather than intentionally growing their assets and resources. 

In essence, we’re leaving them to fend for themselves financially.

As a self-directed investor, you have a lot to share with your kids and grandkids about building wealth. Based on the considerable financial challenges confronting Millennials and Gen Zers, I truly believe that self-directed investing is one of the only paths forward for them when it comes to their financial futures. Ultimately, they need your guidance and expertise to help them prepare for the financial realities of the coming decades.

Why Is Talking About Money So Difficult?

Even if you have close family relationships, it’s not always easy to talk about money with your kids and grandkids! Not only is talking about money considered taboo, but it can be difficult to fully engage your younger family members in money conversations. (Not many young people I know are itching for a chance to sit and listen to a “lecture” on money from the older folks.)

Engaging your kids and grandkids in meaningful money conversations can also be downright awkward. They may feel like you’re prying into their financial lives, when in fact all you want to do is help them on the path to success. Or they may feel as though you don’t truly understand their unique challenges. After all, the obstacles they’re facing today are different from the obstacles you faced when you were their age.

But making the effort to talk to your kids and grandkids about money is well worth it. By committing to talking about money with them, you reduce their chances of making costly financial mistakes or implementing a lifetime of bad financial habits. And you increase their chances of successfully building wealth so they can enjoy the same quality of life that you’ll enjoy thanks to your sound decision-making. 

Show Them You Understand Their Obstacles

The most important part of beginning this conversation is to show your children and/or grandchildren that you understand the economic and financial obstacles they’ll be facing. As with every generation, the difficulties they’ll encounter when building wealth are different from the difficulties you encountered.

If you don’t demonstrate your understanding of their unique obstacles, you might as well be talking to a brick wall. They’re going to tune you out. They’re not going to want to listen. 

And honestly, that might be for the best. If you only give them advice based on the obstacles you faced without taking into account the obstacles they’ll face, you risk giving them bad advice—advice that’s going to set them back rather than move them forward.

To really understand the challenges your children and grandchildren will experience (and are already experiencing) when building wealth for the future, you’ll need to educate yourself about the economic conditions they might encounter long after you’re gone. 

While no one can predict the future, we can use our knowledge of today to forecast where the economy might be headed in the next few decades. To start thinking about the economic future your kids and grandkids may experience, check out these articles I’ve written on the subject:

Empathize With Them

The tension between Baby Boomers and Millennials is a tale as old as time. But if you’re serious about helping the Millennials and Gen Zers in your life learn the best strategies to build wealth for their future, empathy can go a long way. 

Yes, we may see them as entitled—perhaps even a bit whiny! But when you look at the financial setbacks Millennials have experienced time and again, you have to admit that they’ve been dealt a pretty sh*tty financial hand (excuse my French).  

Millennials have spent the last few years hearing that if they only spent less on avocado toast and drive-through lattes, they’d be able to afford homeownership. But studies show that Millennials are actually quite adept at saving money.

When it comes down to it, stagnant wage growth and back-to-back recessions are more likely to blame for Millennials' financial woes rather than poor money management skills. Since these conditions are out of the younger generations’ immediate control, they’ll need to come up with more creative strategies to build wealth with what they’ve got in the meantime. 

Showing empathy—rather than ridicule—will help you start and sustain more productive money conversations with the Millennials and Gen Zers in your life.

Share Your Story

While you of course want to demonstrate that you understand the financial challenges your children and grandchildren will encounter in the future, you need to give them opportunities to empathize with you as well. 

The more they know about your story and financial experience, the more they’ll appreciate what you went through to get where you are today. (And the more they’ll see what you have to offer in terms of advice and support on their own wealth-building journeys.)

Because talking about money can feel so awkward, open up money conversations with your own stories. Sharing your experiences first is a great way to make your children and grandchildren feel more comfortable sharing their own experiences with money down the line.

Talk About Their Goals and Challenges

You can’t give good advice or support if you don’t know where your kids (or grandkids) see themselves in the future. Invite your kids and grandkids—especially those who are already in or nearing adulthood—to talk about their goals for the future. Ask them about what might be preventing them from reaching those goals and what may be slowing down their progress. 

To help you with this part, I’ve included some ideas for conversation starters below, depending on the age of the children and grandchildren you’re engaging with. For younger children and teenagers, I’ve also included activity ideas you can do with them to get them started on their wealth-building journey.

For adult children or grandchildren, I’ve suggested some stories you might share with them to open up the money conversations you’d like to have with them. My hope is that these conversation starters will help you begin meaningful discussions around money that, over time, will become a part of your daily family interactions.

It’s important to remember that for adult children and grandchildren, these questions may feel more personal—and thus more taboo or awkward. Approaching these conversations with empathy, openness, and understanding is the best way to engage your family members comfortably and help them realize that all you want to do is support them in being successful.

How CTAS Can Help You Create a Lasting Family Legacy for Wealth-Building

Teaching your children and grandchildren financial literacy and sharing your story on the path to wealth-building is one of the greatest gifts you can give them. In talking to your kids and grandkids about money, you leave behind a legacy that will help them to enjoy a life of stability and perhaps even abundance. 

At Chicago Trust Administration Services, we recognize the power of generational wealth-building and the challenges families face when it comes to making wealth last for your children’s children and their children thereafter. Generational wealth starts with meaningful conversations and a commitment to passing on family beliefs, values, and habits around money. 

As a self-directed investor, you know firsthand that making creative investment decisions can give you an upper hand when it comes to wealth-building. And you understand how important it will be for future generations to be self-directed investors themselves. 

Self-directed investing is still a relatively uncommon method for building wealth, so it’s imperative that you share your skills and expertise with your children and grandchildren. As your self-directed administrator, we would love to help you deepen the conversations and invite your younger family members to learn more about the self-directed investments you’re making for your future.

To see how we can help you create a lasting legacy of self-directed investing in your family, give me a call at 312-869-9394 or email me at steve@ctasira.com. I look forward to inviting your kids and grandkids into the virtual meeting room so they can get a real-live peek into what it’s like to build wealth through self-directed investing.

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*The content and opinions in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

**CTAS professionals are not financial advisors and cannot provide advice or recommendations regarding specific investment decisions.

Steven Miszkowicz