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Teach Your Children Well; Cultivating Values-based Finanical Fluency

Article Title Teach Your Children Well

To set your heirs up for success, craft a practicable plan for passing down life and work skills – attitudes and attributes – as well as wealth.

When should you talk to your children about their inheritance? Sooner than you may think… and those conversations need to transcend the nuts and bolts of financial literacy. Yes, you need to discuss the reality of your wealth, but you also need to empower your heirs with the values they need to manage and use that wealth. There’s no pride in just being given something, but great satisfaction arises from personal accomplishment.

Most families start out instilling values like sharing, helping out, and earning an allowance. Yet ironically, it seems that the more we grow our wealth, the less we cultivate in our children the attitudes and attributes that were the secret to our success in the first place. This is not a 21st-century dilemma: “shirtsleeves to shirtsleeves in three generations” is an old saying – and one we don’t want to prove.

We Learn What We Live

Children learn first by watching their parents. If we’re high-powered executives or entrepreneurs, our kids likely see us leave early and get home late, maybe miss their games and events. They also see big houses, cool cars, the latest toys and tech. When children experience only money and the stuff it can buy, while the hows and whys of building a meaningful life remain unspoken and invisible, they grow up to feel lazy and entitled.

The speed and accessibility of information today makes it more critical than ever that we instill sound values early on. By the time our kids can read, they’re navigating the internet better than we can. We need to teach them how to discern what’s real and what matters, so they can steer a safe course.

Attitude and Attributes

I grew up in scarcity, but my parents taught me priceless lessons: they loved their work; saved more than most people with plenty; and always found a way to give. I got myself through college, sought out opportunities, and ultimately developed a career that my parents could not even imagine.

My children are growing up in wealth, but I also want them to have perseverance, determination, and the kind of “never-give-up” attitude that enabled my success. I know I am not alone in this. Many wealthy business owners (perhaps you as well) grew up as I did. We want to give our kids the things and experiences we didn’t have growing up, but we also need to give them the values we grew up with. How? There’s no silver bullet, but I can share my own story.

Family Foundation

My wife and I deeply believe in the importance of giving back, and we wanted our children to experience the happiness of helping others. Endowing a family foundation made sense to us as both a way of ensuring our legacy and an opportunity for our kids to understand philanthropy in terms of real people. It’s opened up a whole world for them: they’re excited to join us at annual events, but especially when we discuss which projects to fund. They’ve got skin in the game of giving.

Earnings vs Entitlement

Life doesn’t hand us everything we want or need, no matter how deserving we may be. I was looking to open just such a discussion with my nearly 16-year-old son when college tours and applications were on the horizon. It wasn’t a question of what we could afford: I wanted to help him grow into ethical and financial adulthood.

So, I told him I wasn’t going to pay for his college education. He was pretty much speechless. (My wife, however, had a LOT to say…) Maybe I should have introduced the topic more gently. Maybe not. I certainly had his full attention as we discussed how he could “get himself” through college. 

I wanted to teach him the values of Knowledge, Giving, and Being Productive, which I defined as follows:

  • Knowledge: managing money; recognizing the pitfalls of credit cards; and understanding how savings grow, and why they matter
  • Giving: community involvement; philanthropy; and our family foundation
  • Productivity: responsibilities at home; educational achievements; after-school employment

Which values you prioritize is up to you, but as in any business plan, you need to define and measure them.

Measure It to Manage It

My son and I agreed that if he successfully met certain milestones during college and in the first decade after graduation, I would fully fund his college education. That’s quite an incentive given the average cost of a four-year college is about $250,000. Some of his goals are strictly delineated: e.g., keeping his grades above 3.5 every semester and saving/investing $50,000 within five years after graduation. Others are more open-ended to encourage him to identify and develop his own purpose and passions: e.g., being meaningfully involved in activities that allow him to help other people; taking a leadership role in a club; serving on a committee for a non-profit organization; and ultimately non-profit board membership.

Together, we review his progress every semester (year?). Of course, he’s highly incentivized to not have to pay me back. And as I’d hoped, he’s proving to be a self-motivated and community-minded individual whom wealth won’t spoil, but will empower.

We want to give our kids the things and experiences we didn’t have growing up, but we also need to give them the values we grew up with.


Nicholas Preddice, Founding Partner at The Affinity Group, helps successful people realize their ambitions for sustaining meaningful lives.