How to Talk to Kids About Money (Even if You Have None)

A Morgan Stanley adviser offers his thoughts for the rich — but there’s plenty here for normal folks

By  @dankadlec

Rich people probably spend more time thinking about their money than the rest of us. But even they struggle to discuss financial issues with their kids.

It’s a difficult subject that crosses income levels. I recently came across a paper prepared by Glenn Kurlander, a Morgan Stanley wealth adviser with a well-heeled client base. He offered a set of rules for talking to kids about money, and even though he was preaching to the affluent his rules have broad application. Here’s my take on his excellent advice:

  • Money is like sex. Not really, but it’s true that kids know more than we think they know. They are observant little creatures. They see you pay with plastic. They hear you argue about spending with your spouse. They read the stress on your face while paying bills. And yes, if “they’re always on your private jet … I think they’ve figured it out” that you are worth a boatload. Good or bad, they learn from all of it.
  • Think before you talk. You have got to come to grips with your own values about wealth before you can have that talk with your kids. You can’t buy a new Porsche every year and then try to explain that material things won’t make you happy. You can’t tell kids to give something to charity and not do it yourself. “If there is significant discrepancy between what we say and what we do, they’ll be quick to see it,” Kurlander notes. “They’ll be inclined to ignore what we say and see us as hypocrites.”

(MORE: Communication Breakdown: If You Think You’re Talking About Money, Your Kids Don’t Hear It)

  • Talk, talk, talk. Money is the last taboo — the subject families still don’t talk about. We’ve become comfortable discussing drugs, sex and politics — but not money. That’s insane. Kids don’t learn about money in school. They must get their information from parents before they wind up with debts they can’t pay and in time to start saving for retirement. In Kurlander’s world, the discussion should include “What are the responsibilities, obligations and challenges that come with wealth? Why do we value it? How did we accumulate it, and what did we learn from the effort of accumulation? How, if at all, would we be different if we lost it?” Valid questions too for those blessed with such a problem.
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