Talk About the Money: The Case for Family Transparency

 

Because an active parenting strategy to move towards transparency is—as I’ve seen across 20 years of working with families —more likely to bring about the positive outcomes you want for your children. A transparent approach rooted in trust is also more likely to avoid the realization of the fears that keep many parents tight-lipped about money.

Before we begin, I will acknowledge that every child is different, and some of you may feel you have reasons to dismiss my reflections. That said, in my experience those situations are the exception, so please challenge why you think your family is an exception if that is where your mind goes. I will also acknowledge that I tend to address these issues in a stark, direct manner, which may feel controversial. This comes in part from years of frustration in seeing the unintended, unfortunate consequences of the seemingly rational decisions parents make. This also comes fully from a place of love (perhaps tough love): I have an authentic desire to help your family be the healthiest, highest-functioning, and most fulfilled it can be. We can’t expect to have a healthy society without healthy families, and we can’t expect to have healthy families without healthy individuals.

What keeps parents from moving to transparency with their children?

I’d like to see every parent eventually achieve full transparency about their family’s wealth, its guiding values, and its productive use. But when I talk to parents about this desire, I tend to hear some of the same reactions (or maybe more accurately, defenses) again and again. Let’s look at them one by one—and rip the Band-Aids off each. After that, I’ll share some thoughts on what positive actions parents can take to begin or continue the journey towards transparency.

• Money ruins kids: No, it doesn’t. Parents ruin kids. Sorry. You have full control over how you talk to your kids about money, how you help them navigate it, how you help them understand it, and how you give them access to it. It is in your control. Don’t blame the money.
• Talking about money makes kids materialistic: From a very early age—well into adulthood—your children are already focused on money and materialism. Our society is organized around money. Much of social media is about lifestyle, success, prestige. Avoiding talking about money with your kids doesn’t mean they won’t be surrounded by options and views on money; it just means they won’t be surround by YOUR views and opinions, the ones you hope they will learn and hold.
• My kids have no idea we’re rich: I heard this exact line once from a father after he spent 15 minutes talking about his new jet. Your kids are smart. They know you have financial wealth—they just might not understand its context or its relativity. And if you’re one of those families whose kids truly don’t know they are rich because they don’t understand what rich is, that’s actually a different problem you need to address. I’ve seen the shame in a young person’s eyes, for example, when they talk about how embarrassed they were to learn—in front of brand-new friends—that not every family just writes a tuition check. I’ve also seen a 12-year-old girl, adamant at her birthday slumber party that she isn’t rich, Google to learn, in front of her friend, that her grandfather was worth $7 billion.
• My kids know we’re rich but have no interest in it: This one tends to be a little more dependent on the kid and the family. In some families who have been very intentional about communicating and demonstrating the values they share, kids may be focused on those values more than money. But often, what we see is that kids present themselves as not interested in money because they are afraid of it. They are afraid of how leaking their interest in the family’s money might reflect upon them. Some do this out of fear, some do this out of love, but regardless, it’s unhealthy to trap these feelings.

What helps parents move toward transparency?

If you’re still with me, thank you. Some of my messages may have been off-putting or disputable in your mind. Remember, they come from a place of love—and from experience. Following are a few approaches I like parents to consider because of how they have worked for other families (again, recognizing each family and child is different).

• Make full disclosure your intent. Commit to it, recognize the limited runway you have, and start using that runway productively as soon as possible. Many parents have successfully set a goal of reaching full transparency when their kids are in their early twenties. This is when frontal lobes are developed, when parents feel their relationships have taken big steps towards peership—and, logistically, a target that often avoids the shock of possible forced transparency during a prenuptial agreement process.
• Don’t get hung up on identifying the moment they will be ready. Parents who have started the work and pursued it intentionally often find they are comfortable that their kids are ready before the target age they had set in their minds. This process is just as much about preparing your kids for wealth as it is about learning about your kids and the wonderful adults they are becoming.
• Create opportunities to fail small. Young people who are not allowed to make decisions grow up to be adults who don’t know how to make good decisions. Yes, giving them information and money to “practice” with has its risks, but small failures can be huge learning opportunities. Pushing decisions into your kid’s hand also demonstrates your trust in them.
• Embrace your role as a sense maker. As I noted above, society loves to focus on money, and so many of the messages and conversations can be unhealthy or all-out destructive. If you are not helping your kids make sense of money, who is? Which influencers? Which celebrities? Which mega-families? Which friends? You have your own narratives, hopes, and values around how money can be an important and wonderful tool for a life well-lived—be proactive in bringing all that to your children rather than ceding control to others.
• Avoid the opportunity for assumptions to be made. Even if your kids are not vocalizing their questions, they have them. And in the absence of facts and data, they will formulate their own answers, which may have far-reaching impact. For example, think about the potential impact—positive or negative—of either of these two assumptions: “I can pursue my interests and passions rather than choosing a career direction based on pay,” or “I have to pursue a career that pays well regardless of my interests and passions because I can’t afford not to.” I have no idea how your values frame your thinking about using multigenerational wealth to pursue thriving—or even what thriving looks like to you. Do your kids?
• Don’t think about it as a conversation—think about it as a culture of conversation. If you want to be a resource for your kids, if you want to actively parent around money, you need to create a safe space within your family to explore, discuss, and stumble through conversations around financial wealth. Make it okay for your kids to ask you anything—in fact, tell them to do so. Then when they ask, reflect on whether your answer will close doors or keep them open. That doesn’t mean you need to answer every question. You can choose what they are ready to hear and what you are ready to share. If you’re not ready, try responding with answers like “Wow, that’s a great question. I need time to think about that,” “Thank you for asking; I’m not sure I’m ready to answer that,” or even “Interesting. Tell me more about why you’re asking.”
• You can’t start too early. I thought I was ahead of the curve when I showed my son my financial balance sheet at age 10, but I just learned about a father who started bringing his ten-year-old to fund manager meetings! Imagine the power that instills in a young person. Moving to transparency early can be a great way to force your family through the uncomfortable sense-making that will follow, but I’m not suggesting such a young age is right for most children. However, creating that safe space and demonstrating that it’s okay to talk about money as a family can start as early as 5 and 6 years old. And even younger than that? No better way to prepare your kids for the financial wealth they might receive one day than teaching them the power of “please” and “thank you.”

In fostering a culture of open dialogue about wealth, parents equip their children with the values, understanding, and resilience needed to handle financial responsibility thoughtfully. By addressing both the technical and emotional aspects of wealth, families can nurture a healthy relationship with money that aligns with their core values and aspirations. Ultimately, transparent conversations about wealth not only strengthen family bonds but also empower future generations to lead fulfilling, purpose-driven lives.