Tag: Family Wealth
Parents everywhere stress over how to have “the talk” with their children. Is it too early? Am I prepared to answer their questions? Can’t I just let school handle this?
No, it’s not the birds and the bees. It’s the money talk.
If you’re counting on our educational system to have the money talk for you, your kids will probably be short-changed. In a 2017 “report card” measuring states’ effectiveness at producing financially literate high school students, only five received an A. Just 17 states required high school students to take a personal finance course (now 19). More than half of American students will graduate without taking an economics class.
To put this in context, schools (and maybe parents) seem better equipped to talk to kids about drugs, sex, and alcohol than about money.
But why is this? As is often the case, we avoid talking about things we ourselves are uncertain of. So, the first step before initiating a money talk with your kids must be inward: What are your own preferences, goals, boundaries, and standards when it comes to money? Reflecting on these questions should improve your conversation.
The most valuable financial lessons to address early on relate to priorities. Is saving money for a family vacation your priority? Talk about it. Is sacrificing luxuries to pad your kid’s college fund the priority? Be transparent. Rather than simply telling a youngster what a savings account or a 529 plan is, put it in context for them – why is this important to your family? Ask them how they feel about it too. You may discover their priorities aren’t the same as yours!
Money talks should be dialogues, not lectures. Keep it simple. I once brought this “Setting a Standard” one-pager from the JumpStart Coalition to a daddy/daughter dinner. Something as basic as discussing the difference between borrowing and buying can lead to important revelations.
Lastly, remember that financial education isn’t limited to teaching. Consider what you model every day. How do you talk about money with your spouse? How transparent are you about bills, investing, estate planning, etc.? Keep this in mind, because kids are always tuned in.
Even if your kid does learn about money in school, there is no substitute for authentic, one-on-one engagement. Accordingly, it’s incumbent upon us as parents to champion financial literacy standards. Whether we choose to acknowledge it or not, money has power. For your sake and theirs, it’s worth taking the time to help your kids understand how to wield it.
While I just turned 76 last week, my 80th birthday doesn’t feel that far off. I couldn’t have asked for a better role model on how to prepare for that milestone than Chris Crowley, octogenarian and best-selling author of the Younger Next Year book series.*
Earlier this month, we were delighted to host a special evening with Crowley (84) and a gathering of friends and family at St. Louis’ PALM Integrated Health venue. In his featured book at the event, Crowley shared seven tips on how to “Live Strong, Fit and Sexy — Until You’re 80 and Beyond.” He and his co-author Dr. Henry Lodge suggest this is “all” you have to do:
- Exercise six days a week for the rest of your life.
- Do serious aerobic exercise four days a week for the rest of your life.
- Do serious strength training, with weights, two days a week for the rest of your life.
- Spend less than you make.
- Quit eating crap!
- Connect and commit.
Okay, I’m on it!
*To our clients – Shoot us an email if you’d like your own copy of Younger Next Year.
Combine our aging population, longer life expectancies, and all the new-fangled ways to engage in old-fashioned thievery, and America faces a perfect storm of increased financial elder abuse.
It’s worth emphasizing, even those who are affluent, well-educated and/or generally street-savvy are not immune from the threat. In a 2015 survey, True Link Financial (a firm dedicated to protecting families against financial abuse) found that, “Seniors who are young, urban, and college educated lose more money than those who are not,” and “[f]inancially sophisticated seniors lose more to fraud, likely because they are comfortable moving larger amounts of money around.”
They also found that especially friendly (and/or lonely) seniors were at increased risk. For example, you probably know someone who fits this description: “You tell mom to hang up on telemarketers, but she is just too polite to hang up on anyone.”
First, we fiduciary advisors have an important role to play as our clients’ first lines of defense against financial elder abuse. Once we know you well – and thanks in part to recently enacted legislation – we and our allies at Schwab Institutional are better equipped to detect and follow up when something seems “off.”
Family members can and should help as well (although, tragically, they can also be among the worst perpetrators, given their ready access to the victim’s heartstrings).
Together, we can watch out for telltale signs of financial elder abuse.
Be on the lookout for erratic financial activities that don’t jive with your loved one’s past habits and levels of competency. For example, watch out for missing or inconsistent account statements, unpaid bills, and unexplained deposits or withdrawals.
There are softer signs as well. Be on alert if a loved one is displaying increased levels of anxiety or confusion about their money; or if a family member, “friend” or guardian may be isolating their victim from you or others.
Financial abuse can arrive in the form of an external threat – such as a phone scam, in which the victim is tricked into wiring money overseas to “rescue” a stranded relative, or a phishing email that tempts them into clicking on infected links. As touched on above, the abuse also can come from a trusted friend or family member, and it can continue for years.
If you suspect you or someone you know has become a victim of financial abuse, don’t feel embarrassed or ashamed to report it. It truly can happen to anyone, at any age! Hill Investment Group clients and their family members should feel free to reach out to us with any questions or concerns. You also may wish to be in touch with other financial alliances, such as your bank or insurance provider, and consider submitting a complaint to the Consumer Financial Protection Bureau.
Would you like to know more about what we are doing Hill Investment Group to prevent abuse and fraud, and protect client information? We are here as a resource for you. Feel free to be in touch with any questions.