Be transparent about your wealth. Determining how much to share about your finances with your kids and when to do so can be a tough call. Many high-wealth parents put off having conversations about money.
A 2013 Wall Street Journal article by Missy Sullivan references a 2012 study by U.S. Trust that found “more than half of high-net-worth boomer parents had not fully disclosed their wealth to their offspring, while another 13% kept completely mum.” But this lack of transparency creates kids who aren’t prepared for the wealth that will one day be coming their way.
Parents should talk to their kids about family values and beliefs around money during their formative years — in an age-appropriate way. Frugality, budgets, saving, generosity, use of debt, and entrepreneurialism are all examples of money values that can be discussed and modeled in various age-appropriate ways.
As kids get older, clearly communicate expectations about the amount of financial support you will give them. Be specific: You might be willing to cover a used car (but not a new one) or college expenses (but not grad school). How long will you offer support? Until age 25? Age 35?
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