8 Family Traits for Better Financial Planning Across Generations

In my 25+ years working with multi-generational families on their wealth management and financial planning, I’ve had a front row seat to see what works and what doesn’t. Looking back at these experiences, I have come to realize the families that are successful in managing their wealth from one generation to the next often display several common family traits.

  • Understand Money’s Role in the Happiness Equation – Family members are taught early in life that money alone will not deliver happiness. Instead, wealth can provide opportunities to explore passions and obtain meaningful experiences, and these are the true drivers of fulfillment and happiness.
  • Embrace Adversity as Opportunities for Growth – One of the best ways to learn responsibility is by paying the price for our actions and behaviors. The families that understand the importance of facing consequences head on and learning from them seem to be more successful.
  • Share Multiple Points of Connection – – Families that share multiple points of connection across generations seem to be more united and on the same page regarding financial management. These points of connection can include common vision, a core set of values, beliefs, faith, or family traditions.
  • Support Individualism – Members of successful families support and encourage each family member to live their best lives, no matter how different it is from theirs, and do so without constraints or resentments.
  • Communicate Freely & Honestly – Whether it’s at the family dinner table or in a formal family meeting, successful families communicate freely and honestly across a wide variety of topics. With more difficult subjects like family money, open communication is even more critical and enhances family bonding.
  • Prioritize Community Involvement – Dedication to others, supporting important community organizations, and being an active member of the community are all important to successful families. The definition of support also goes well beyond financial support to include donating time and leadership skills.
  • Carefully Plan Wealth Transfers to Support Empowerment – Well-planned trust and wealth transfer arrangements can encourage heirs to find purpose in life. Employment matching or educational trusts are a few popular techniques employed by successful families.
  • Encourage Lifelong Growth & Learning – Like many things in life, learning to live with and manage wealth take skills, education, and experience. Successful families ease younger generations into this process early in life and support gradual and consistent learning through experience over time.

By taking a generational approach to wealth management and financial planning, successful families seem to place more focus on using wealth to create opportunities and growth experiences for younger generations to improve overall happiness, fulfillment, and family connection.