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  • Writer's pictureSusan J. Brown

Raising Financially Responsible Children

It is an age-old question. How do we teach our children the value of money? And if you are a family business, another question can arise. How do we reduce entitlement to family wealth or to the family business in general? This article gives our opinion on how to do that.

Family businesses that continue for many generations have something unique. We know that regular family meetings, strategic planning and an effective decision-making process are key factors in that continuity. The family part is important since it has also been shown that the strength of the family business lies in strong family values, legacy and a mindset of preserving the business and wealth for future generations.

We believe that instilling this mindset in children from a very early age helps foster the transition of leadership and ownership continuity. To do this properly, we believe this exposure must include financial education, work ethic and an awareness of how children can use these tools to create their own future. There is one key component to be aware of however. Telling our children that they have to work in the family business or telling them they need to contribute may get the opposite effect. Our kids are individuals who want to be seen and heard arguably like everyone else. They are on their own path and have their own unique set of skills and ideas. This unique skillset of all family members is also coincidentally what we believe will make the business stronger and adaptive to change, progress and succession.

So how do you in-still that mindset and embrace that potential in our children? Based on many years of educating children in the school system, at home and in family business, here are 5 steps to consider following:

1. Talk the talk and walk the walk.

Children watch what we do as parents! If we are not using the right language or managing our own money properly, then this will impact our children’s money habits. Even though you may have excess wealth and cash flow, spending money responsibility and in line with family values will go a long way. A Investment Advisor who specializes in working with family business can help you get your own finances back on track. We have a values-based cash flow planner that can help.

2. Use the right language

Talk about price shopping, budgets, saving and financial goals whenever you are out with your children even if you are doing well financially. There are many creative ways to illustrate these concepts. It can be as simple as putting children in charge of picking out the groceries in the store using actual money and sticking to a budget! We know it will take longer but the lesson learned may be worth the time! Making choices and seeing money actually run out is a valuable lesson we believe every child should learn.

3. Encourage curiosity and leadership

Put your children in charge of a project to do with the business. The project can be small or big depending on the age of the child. We encourage this type of project as young as age 6. An example of a project for a younger child could be something as simple as unpacking the stationary supplies for the office and organizing them for the office. Ask them what they think would be the best way to make the supplies accessible to the staff. Look for and recognize their unique abilities and strengths.

4. Encourage Entrepreneurship!

Building entrepreneurial mindsets while children are young increases the chance that the child will add value to the family business and become engaged in succession. One way to do this is to give your child some “seed” money to let them experiment! Depending on the age of the child, you can start with as little as $50! Tell them they can start any little business they would like but they need to come to you with their idea and some idea of costs and pricing! You can give them a worksheet to get started!

5. Back to basics

We believe children need to be introduced to certain basic financial concepts before the age of 18 so they are empowered to use this information to start building their future. This should start with simple money identification at age 4 all the way up to personal taxes and investment concepts at age 17! We have included a diagram below showing what we think are the key concepts in each age category. It is unlikely that children will get all of these concepts introduced through the school system so it may take some one on one learning or workshops offered by companies like ours.


Susan Brown CLU®, FEA, CFP®, RRC®, CIM®

Investment Advisor

IA Private Wealth ǀ Propel Financial Life Management

Insurance Advisor ǀ Propel Insurance and Advisory Inc.

T: 403-616-7699ǀ

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