Money and Family Don’t Mix

By Wendy Turk


Or do they? I’ve found that money is a delicate subject for most people, verging on being taboo to talk about even with your closest friends and family. Is it truly because money and family don’t mix? Or is it a preconceived notion that they don’t mix because people attach a disproportionate amount of value with the money they have (or don’t have)? As my children grow and as my parents age, it has become more pertinent for me to address finances, reinforce family values, and embrace the hopes and dreams for our family.

Begin a Conversation

As with most relationships, it is important to engage in conversation early and often. Sometimes when the subject is money, this conversation can be a difficult one to have. But as much as you think your parents or children may not want to talk about money, they may think the same of you. Start small, and speak often. It can begin with telling a money story of your own, and with that, you’re beginning a dialogue. Being open allows children to learn from their parents, or aging parents to understand your interest and concern.

Get Involved

You or your parents may have a team of professionals, which may be a doctor or doctors, an accountant, a financial adviser, attorneys, etc. Often visits to any professional will involve jargon that may be difficult for any person to remember, much less retell in a thorough way, so it may be eventually be necessary to join in appointments and meetings and have family involvement. I’ve had teenagers join in meetings with their parents, where we’ll discuss retirement savings and needs, or talk about the cost of college. I’ve also had meetings with clients and their aging parents, where the main goal is to be on the same page. There is immeasurable value when multiple generations can meet together so nothing is lost in translation.

Understand the Wants and Needs

For all parents, it is important to have an estate plan, list the type of assets owned, and note where those assets are held. Storing this information in one location can make everyone’s life easier. It isn’t necessary for anyone to divulge what their will and trust might state, but the clearer their intentions, the better. The key is that someone (anyone!) knows what they’re looking for and how to access it in the event of an emergency.

Aside from a will and trust, an estate plan will include a Health Care Directive and a Power of Attorney, where decisions can be made in the event of incapacity. While these are written documents, I believe it’s also important to understand what your parents would want (or have your family understand what you would want) in the case of life support, nursing homes, final plans, and all the other things you never want to talk about. It may also be necessary to start discussing who would foot the bill if parents end up needing long term care so that consideration can be added to an overall family financial plan.

Create a Legacy

Ultimately, I don’t believe most people create families so they can just “make due,” or leave their children with less than they had. I believe it is most parents’ hope that their children surpass them in every way possible; I know that is my hope for my children, and I know that has been my parents’ hope for my brother and me. As an adult child, it is important to either take the financial lessons that worked for my parents and embrace them, or learn from their mistakes. As a parent of young children, I constantly remind myself that I am the example, and no matter what I say to my children, I must always model through my actions.

I’ve learned a great deal from my parents from an early age: starting an allowance at age 8, putting saving first, understanding investing concepts as a teen, and never keeping a credit card balance. When it came time for college, my parents were quite clear that they could afford an in-state school, but private school was not an option. I am highly appreciative that not only did they pay for my college education, but they also trusted me enough to understand their financial limitations. My parents have worked hard, saved, invested, and made so many good financial decisions, as have I, and we have the opportunity to create a true legacy. It is my hope and goal to instill the same financial savvy in my children as my parents have for me.

As taboo a subject as money may be, family and money can mix, and more importantly, should mix to create the strongest family financial plan.

Securities offered through LPL Financial, Member FINRA/SIPC.

Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor. Gerber Kawasaki and Gerber Kawasaki Wealth and Investment Management are separate entities from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.

Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393