Nurturing Responsibility: Raising Ambitious Kids with Financial Resources

By Angela Grannan on May 22, 2024

Whether we like it or not, as adults and parents, we are tasked with teaching the next generation to become financially responsible adults. 

As an advisor, I often find that families with substantial financial resources often struggle with the balance between providing their kids with certain advantages without destroying their ambition.  I try to remind  parents that our actions and words will influence how our kids feel about money and their career development into adulthood.  Below are additional tips I share with the families I work with.

It’s important to start money lessons early.  When kids are starting to learn the difference between needs and wants at school, practice it at home too.  Don’t give them everything they want.   (I like to burst out into a version of “You Can’t Always Get What You Want” by the Rolling Stones.  My son doesn’t find that very funny.) Encourage your kids to save for the toy they want or to do small chores around the house to earn it.  This delayed gratification will give them the ability to resist temptation and spend more responsibly in the future.  In the age of Venmo and Zelle it’s hard for kids to learn about money—they rarely see cash!  Activities such as household chores or a neighborhood lemonade stand can give them a more concrete idea of earning money and weighing different spending decisions. [1]

As kids reach high school and college age, start to discuss the importance of work and set the expectation for a summer job.   It is important for teens and young adults to experience work for themselves and gain that feeling of accomplishment.   A summer job is a good time to give kids some independence when it comes to making decisions about money.  Those first few paychecks will serve as a good training ground and opportunity to learn how to balance spending with saving and even investing.   If they make bad decisions (overspending, not saving) they will need to deal with the consequences.  Failure or making mistakes with money (and in life) is part of learning and it’s better to learn from mistakes when the stakes are low.  This is a good time to tell your kids about some of the financial mistakes you have made and the valuable lessons learned.[2]

Hopefully, your child will take these valuable lessons into the post college years as theybegin to plan for their own future.  This is another opportunity for parents to set financial boundaries—remind your children that you are not a human ATM.  As kids mature, you can also be more transparent in discussing your family’s wealth.  When your children are younger, they learn through observation.  Your values around money are on display through your actions.[3]  As your kids prepare to live independently and start their own careers, discuss your family’s values pertaining to wealth.  Tell them your family’s stories of success and failure and how perseverance and hard work ultimately prevailed.[4]  If gifting assets to your children aligns with your values, be sure to explain why you are gifting.  Remember that this gift is additional support and not a bargaining chip. Be a good listener before you impart your financial wisdom, and be sure to clarify your expectations (responsible use of the gift). This will help your children figure things out themselves and will create responsible adults with wealth.   

As parents we want to raise independent, motivated children.   We desire to give them every advantage, but not at the cost of ambition.  Children learn by observing their parents.  Model your everyday actions around values related to your wealth.   Encourage work and responsible stewardship of your family’s wealth for future generations. 

For additional information or guidance, feel free to contact me.

[1] https://www.bbh.com/us/en/insights/private-banking-insights/ten-strategies-for-raising-kids-with-wealth.html#:~:text=Consider%20alternatives%20that%20will%20make,abo

[2] https://www.bbh.com/us/en/insights/private-banking-insights/ten-strategies-for-raising-kids-with-wealth.html#:~:text=Consider%20alternatives%20that%20will%20make,abo

[3] https://www.bbh.com/us/en/insights/private-banking-insights/ten-strategies-for-raising-kids-with-wealth.html#:~:text=Consider%20alternatives%20that%20will%20make,abo

[4] https://blumandsavlov.com/wp-content/uploads/2018/12/jeff_savlov_fb_legacy_handbook.pdf