3 min read

Sharing Financial Planning Lessons with the Next Generation

Careful financial planning protects and grows your money throughout your life, while careful estate planning allows you to pass your wealth and property to the next generation. The money that you worked to earn can provide a launching pad and/or security net for your kids, grandkids, and everyone else who follows behind you.

But leaving money to the next generation can backfire when your loved ones don’t know how to manage money responsibly. Protect your financial legacy by making sure the next generation has a general understanding of financial planning principles. Sharing what you’ve learned about financial planning may help younger relatives develop good money habits that will serve them for life.

Make financial literacy part of regular conversation with young people.

It’s never too early to start talking to children about financial responsibility. Kids and grandkids can absorb a lot of positive money lessons by hearing adults talking about sticking to budgets, the difference between “want” and “need” and the basics of how financial planning and banking work. When denying a child’s request for something expensive, talk about why. Explain how money earns interest and why it’s important to have savings for the future.

Talk them through your biggest successes and biggest failures.

Frame financial planning lessons as stories might help you engage younger relatives in these conversations and help them grasp the real-life consequences of money decisions. For example, if you decide to splurge on a luxury trip because an investment paid off (or because you saved for a year to afford it), talk about what you did to afford it when talking about the plans with your family.

Stories of your financial failures could be even more useful to younger relatives than stories of your financial successes. Hearing about your retirement planning mistakes or credit card debt might scare them away from making the same errors. Describe what led up to your worst financial mistakes and what it took to undo them.

Create a record of your best advice.

Unsolicited financial planning advice can fly right over a kid’s head. By the time they’re actually ready to open a credit card, they might have forgotten the lecture you gave them at 13 about paying off the balance every month to build good credit. Hopefully you’re just a phone call away and able to repeat the speech. But just in case you’re not, consider writing up a list of your best money advice and financial lessons. Summarizing them in one place creates a sharable resource that can be passed around to multiple generations.

Involve kids and grandkids in financial planning meetings.

Why not bring younger relatives into meetings with your financial planner? If they’re old enough to earn their own money and your planner is okay with it, letting kids and grandkids sit in on meetings can change the way they think about money management.

Explain in broad terms some of the topics you expect to talk about during the meeting in advance so younger relatives have a basic understanding of various financial account and investment types. Together with your planner, give them context for the points you discuss during the meeting. Explain your reasoning for making changes to your portfolio or increasing your retirement savings, for example. Encourage them to ask questions about any terms they don’t understand. Spend some time talking about what kind of financial resources they’ll have in the future, and what kind of steps they can take now to maximize their own wealth.

Use trusts to reinforce your financial planning philosophies.

It’s common practice to use trusts to transfer wealth to the next generation. Carefully structure the terms of any trusts you create so that assets are distributed in a way that’s aligned with your personal financial values. If you strongly believe that young people should have to work for their money, you might decide that heirs only inherit once they turn 30. Or, if you value charitable giving, you might create a provision asking heirs to give a certain percentage of each distribution to a charity they support. There are a lot of ways you and your advisors can use trusts to guide your heirs toward good financial decision making.

Sachetta, LLC believes in a family-focused approach to financial planning. From new parents to great-grandparents, we’re here to help all clients make the financial plans that are most beneficial for their families. Get in touch to find out more about how we can help both you and your younger relatives prepare for whatever comes next. Contact us today.


Matthew Stead, MSFP, joined our team in 2014. He obtained a bachelor’s degree in finance at Bentley University and his master’s degree in financial planning (MSFP) at The University of Georgia. He is sitting for the CFP® shortly. Matt wears a variety of hats in the office but primarily serves as the director of operations for our wealth management team, as well as building and maintaining our IT infrastructure. He also is the host of our podcast Fine Answers.