What is your relationship with money? Do you completely ignore it and let your spouse handle it? Or are you a saver, keeping track of every penny you are able to add to your savings account? Are you a risk taker, making big bets on the next big thing, or a risk avoider, not even sure if you can trust the banks to protect your money? Do you associate spending money and buying things with pleasure or pain?
Why do I ask you these questions? Because whether you know it or not, your relationship and attitude about money has influenced your children and how they relate to money. It is important to begin to understand this connection when you start talking to them about their finances and your own.
As she has done many times in the past, my daughter taught me an important lesson five years ago. She asked me, "Dad, you're a financial planner, and every day you are talking to your clients about money. How come you have never talked to me about it?" I was stunned, speechless. I realized that I had never shared our financial goals with her and had never inquired about her own financial situation.
From that day forward we have had an annual financial planning meeting around the Christmas holiday. I share with her what our financial goals are and I ask her what her plans are for the next three to five years. It is a way for each of us to keep our intentions clear and it has been a wonderful tool in cementing our relationship.
At first I had difficulty sharing with her what our income was and how much we had saved for retirement, but after a while, it became much easier. After all, I really didn't have anything to hide. In the same way I had to be careful not to judge her for the amount of credit card debt she had or the amount she had saved.
As each year has progressed, we have become more confident is sharing financial information with each other. She has become more willing to ask me questions about her future and get my input on the best course of action for her to take. And to my constant amazement, her financial situation has improved significantly each year. At this point her income is much higher and she has saved much more than I had at her age. A true miracle!
I believe it is very valuable to have this money conversation with each of your children every year. I suggest strongly that you set a specific date to have a financial meeting with them. Your daughter might expect the meeting on the first day of summer, your son on Father's Day. In this way they will know and look forward to this event.
The first few times may seem uncomfortable, but eventually you will find that you feel much closer and are more honest with each other. You may even find that you have a clearer picture of your own financial goals.