Leaving a priceless legacy for your children

From algebra to capital cities, history, physics and Shakespeare, we can all remember the varied topics we studied at school. But how many of us can recall learning about finances? Thankfully, things are changing, with curriculums flexing to focus on budgeting, pensions and managing incomes, and increased technology also helping make money matters more understandable for the younger generation. Here, Trevor Clark, pictured, below left, Chartered financial planner and director at Perspective (North East), reflects on the evolving landscape, highlighting further ways you can leave an economic legacy for your children.

 

No financial taboos at the breakfast table

Money and politics are often taboo subjects for many of the older generation.

However, we are entering a new era of discussion, and the breakfast table is the perfect educational platform.

We know children and young adults are inquisitive, and encouraging them to ask questions and become conscious of financial matters at an early age is very important.

A simple savings account will encourage them to value money, look to the future, gain a sense of satisfaction and, to a certain degree, provide independence.

And there are tax-efficient wrappers for youngsters too, most notably junior ISAs.

It’s never too soon to provide a strong grounding for the years ahead.

 

Sharing financial experience while you’re alive

According to a recent study, 38 per cent of parents say their families didn’t sufficiently educate them on investment matters.

But we learn more from our mistakes than our successes, particularly in finance, so surely it makes sense to discuss these ups and downs with our children?

If they learn from our financial successes, that’s great.

However, if they avoid our worst financial misfortunes, while still being able to learn the lessons of experience, this provides the best of both worlds.

 

Be open and honest – prepare your family for the future

Leaving your children with a level of financial awareness is excellent, but an open and honest approach to money could be even further reaching.

Encouraging your children to be transparent with their offspring creates a cascade of financial knowledge, as well as life experiences.

 

Teaching early: 50 per cent of parents with children aged ten or above have already begun teaching them about investing*

 

We can advise and help where required, or become a sounding board for ideas and investment plans.

Why not involve your children in some family financial decisions?

Setting them simple spending-related tasks will make them appreciate and understand the value of money.

Furthermore, it will provide them with a sense of achievement, create aspirations for the future and give them a financial voice.

Most importantly, encourage them to respect money without fear and understand their needs and wants, as well as highlighting the long-term consequences of good money management.

Once they learn these factors, it makes our role that much easier.

 

Custodial investment accounts are used by 26 per cent of parents to educate their children about the value of financial management*

 

Young adults today often have a refreshingly unfettered outlook on life and the ability to come at different subjects from very different angles.

The continued roll out of technology is increasingly bringing finances to the masses, and certainly to the next generation.

Maybe, in this changing world, we can use our discussions to learn from them too?

 

Pass on your experience – and your capital

Next time you take a break or have a few moments to yourself, sit back and ponder this scenario.

We strive to pass our physical wealth to our children, yet often take a lifetime of experiences to the grave.

The combined value of these experiences will far outweigh any inheritance material and financial benefits.

This is why open and frank discussions are so important.

 

Help is at hand

What better way to introduce your children to finance than speaking to your financial planner?

A gradual introduction to savings plans, investments and pensions will only bode well for the future.

And we would be happy to help.

 

www.pfgl.co.uk

@perspectivefgl