Many parents’ biggest fears came true with the emergence of the Rich Kids of Instagram page several years back, which features young people flaunting their wealth and whereabouts. While privacy is making a bit of a comeback these days, there are still young people who craft their persona around their families’ wealth. The teens and 20s are formative years, and it’s worrisome to say the least to have wealth and materialism become synonymous with identity and self-worth. I worked with one family that was determined to make sure their kids were down to earth after seeing their extended family go through newsworthy embarrassment and entitlement with their kids. This family is well known, has a substantial net worth, and knew they could not hide their wealth from their kids. Their approach was to focus on their kids’ individuality, balance opulence with conversations around inequality, and put numerous structures in place to hold their kids, and themselves, accountable to their goals.
Below are a few strategies to turn your intent of raising responsible, grounded kids into action.
- Encourage kids at a young age to find their passions. Many people discover their passions and dislikes through the necessity of working and making money. Sometimes in wealthy and busy families, vacations will eliminate the possibility of summer jobs and trust funds will allow young adults to postpone choosing careers. For many young people, it can be daunting to try and follow in the footsteps of their successful family members.One solution is to kindle passions as they present themselves in your children, however far-flung the hobbies may seem. While horseback riding and sports are common, I have also seen a young girl so passionate about collecting every National Park Quarter and visiting each of those sites through the years. She eventually became an intern for the National Park Service. Who knows if this path would have been forged if her coin collection was not accepted and encouraged at a young age. Finding and pursuing passion often leads to a sense of purpose that wealth alone cannot provide.
- Balance the search for passion with building character and delayed gratification. The flip side to encouraging passions is the frustration of buying a new violin, telescope, surfboard, or sewing machine to be abandoned within weeks. Set boundaries and expectations around what it means to commit to something, including the time frame and effort, and be sure to write it down and stick to it. You may also encourage your kids to have “skin in the game” for a passion before you fund it. Perhaps they need to ask their music teacher if they can rent or borrow that violin for a few weeks before one is purchased. Try to frame the search for individual passions as one of the most challenging and rewarding adventures in life and make it clear that commitment is a key part of the journey.
- Have conversations about boundaries and saying no. A client once told me that his biggest fears in life were around his kind-hearted and generous daughter being taken advantage of. He did not want to change her, but he wanted to protect her as she took more ownership of the family’s business, wealth, and philanthropy. I encouraged him to have discussions about the “joys of saying no” and how being intentional about generosity can lead to better outcomes for everyone. We also worked with her to identify what type of information to share with close friends, acquaintances, and those she just met. Getting clear on boundaries and gaining comfort with saying no went a long way with balancing her big heart and privacy.
- Celebrate all forms of wealth. While running a workshop for teenagers, I posed the question, “What are some of the most important qualities you look for in a friend?” Among the range of answers, one boy shared that how much money people had was the most important. I could see eyes roll and anger stewing in the group. He quickly added the attributes of loyalty, a sense of adventure, and generosity. As the tension in the room dropped, I was reminded that it is not necessary to shut down the importance people place on money, but to consistently remind and reframe that our values, networks, minds, and hearts are equally important.
- Give your kids a big, diverse life. I was running a workshop for a group of cousins, aged 9-12, and I asked them where their favorite place was in the world. The answers included Istanbul, Chuck E Cheese, Bora Bora, grandma’s house, and the pool. While many parents worry that taking their kids to extravagant destinations will make them spoiled, it may be unrealistic to deny their own priorities and desires of how to spend their time and money. If you are going to fly private for one trip, consider economy class for the next. Also, try to not have every day, vacation, and activity planned to a T. Allow your kids to take part in the decision-making but also model adaptability when things don’t go according to plan.
To explore how best to begin the “money talk” with your family, please contact Whitney Webb. Visit Cresset’s website for additional resources related to financial literacy.
