Passing On Your Financial Values to the Next Generation

By on September 29, 2016
Categories: KIDS & MONEY

As you may already know, the Baby Boom generation will pass $30 trillion on to the next generation. This financial legacy carries with it the expectation that the assets will be used in a manner that reflects the values of the givers.  Baby boomers, like other generations, have a broad range of beliefs and attitudes about money that are demonstrated in the way they spend and save it.  For example, many boomers say that they appreciate the benefits created by hard work, beyond just the monetary gain. Some prefer to keep the money they earned in the family while others want to use it to effect positive change in their community through charitable giving. You may have other principles that guide how you use or accumulate money.  Or, you may not have given it much thought up until now. If you expect to leave a bequest to your family, and/or to outside organizations, it may be worthwhile for you to think about your values and how best to transmit them.

For families with children, parents are the primary role model for how to manage and think about money. Modeling the behavior you would like your children to emulate is a good place to start. If you value hard work, do your children see that? Or do they get everything they want? Young children can earn an allowance doing chores or helping neighbors, for example. If living within your means is important to you, older children may be expected to pitch in on a large purchase so they understand the concept of saving money for big ticket items. (I remember that I wanted an Atari game system when I was young, and my parents said I could have one if I contributed half of the price. I did earn my half and was so proud when we went to the store and bought it.)

For those that want to have an impact on the community, do your children understand the donation process, and do you visit the charities (where possible) with your children? Many charities have a page on their website detailing how people can help. They often include options for young volunteers, so kids can get started contributing to their communities before they even go to college. If some or all of the bequest is intended for charity, the organizations should be vetted to ensure that their values are aligned with yours.

In some cases, the older generation withholds information about their true net worth so that their descendants will learn to be self-sufficient, which is an excellent goal. However, should something unexpected happen and a large amount of wealth is handed down suddenly, it’s unlikely the inheritors will have the skills to handle them appropriately. One way to prepare for this is to write your estate plan in such a way that the younger generation does not receive all the money at once, but rather gains access to it at different ages as they mature and become more responsible. It may also be helpful to ensure that your heirs receive additional education on investing in order to make wise decisions when the time comes.

These are a few of the many different ways to transmit financial values to the next generation and beyond. The key is that those currently holding the wealth have to think about their values, and ensure that the way their descendants see them handling money, is the way that they want the younger generation to treat it. If you realize that you have fallen short in modeling behavior that reflects your values to date, now is the time to start teaching and showing your heirs, in order to ensure that your values are passed on, along with your money.


grandparents playing with grandchild

5 Tips to Consider When Giving Money to Your Grandchildren

Read Now
Young woman on the sofa at home shopping products online and paying using a credit card

Has Someone Stolen Your Child’s Identity?

Read Now
Shot of a little girl playing the guitar with her father

Financial Planning for New Parents

Read Now


Discover the people who make Dowling & Yahnke one of San Diego’s top wealth management firm.



Our team is available now to discuss all of your financial goals.