Financial Health
June 15, 2022

4 tips from experts for raising financially healthy, wealthy, and wise children

Wealth advisors share real-world strategies, plus mistakes to avoid, based on new survey data.

Between the back of two heads we see a child sitting on an older man's lap with another lady sitting beside them. They seem to be engaged in conversation.

Parents of Gen Zers and millennials: Your kids want to talk to you about your money. In fact:

  • Over half wish there was more transparency in their family about wealth.
  • One in four have, at best, only a vague idea about their parents’ inheritance plans.
  • Four out of five feel it would be valuable to have regular meetings with parents to discuss their family’s finances.
  • Two in five feel uncomfortable talking with their parents about how much money they have.

This data comes from a 2022 study of Generation Zers and millennials between 20 and 39 years old who are expecting to inherit more than $1 million, conducted by Wells Fargo Wealth & Investment Management.

But it doesn’t have to be that way. Here are strategies you can start using today, even if you don’t have anywhere near $1 million to pass down to your children — or if your children are adults with families of their own.

1. Be transparent

Arne Boudewyn, Advice & Planning Director for Family Wealth and Culture Services at Wells Fargo Bank in Wealth & Investment Management, said while for many, wealth grantors not discussing their money is largely unintentional, it can come across to their beneficiaries as a lack of trust, confidence, support, and even faith. “In fact, sharing information could be a source of empowerment and ongoing conversations,” he said.

While four out of five have information about their parents’ assets because they have talked openly with them, half got information from looking at records or talking with others, according to the survey.

It’s not just 20- and 30-somethings searching for information; teens and tweens with phones or access to a computer are, too. “Parents, rather than the external environment, should lead the conversation,” said Michael Liersch, head of Advice & Planning at Wells Fargo Bank in Wealth & Investment Management.

Almost three-quarters of the survey respondents said talking about an inheritance would help them plan better for the future. Boudewyn agrees. He has a client who, at age 40, began receiving distributions from a family trust, which no one ever discussed with him. “While he’s grateful, he resents being kept in the dark,” said Boudewyn. “He might have made other choices and planned his life differently, yet still responsibly. He felt it was a lost opportunity.”

2. Plan ahead for family firsts

Angie Sabel, a private wealth advisor at Wells Fargo Private Bank, has a list of firsts that she prepares for her clients’ families so each of the generations appreciates the meaning of the money and planning that’s involved. These include milestones spanning from first allowance and job to first home purchase and marriage.

“Many firsts, such as a bike or car, can also introduce a cost-sharing experience between you and your child,” said Liersch. “A client’s daughter wanted to start horseback riding because her friends were doing it. Her parents debited the expenses of the equipment and renting the pony from her trust. She stopped when she realized the benefit wasn’t worth the payout.”

Make a plan in case one partner doesn’t hold up their end of the bargain. Boudewyn has a client who told her sons she’d pay for college if they got As and Bs. When one son pulled in a C, she showed him the agreement and said, “You owe me money.”

3. Teach value-based financial literacy

Almost half of survey respondents said their parents rarely or never discuss values about money and the role that money plays in their parents’ lives. “They want to understand the meaning behind the money,” Liersch said. “It’s not about the money itself.”

“To make sure it’s not just ‘money in and money out,’ I try to create an attachment,” said Sabel. “I’d say, ‘When your great-grandfather started the business, he set aside this money.’ This evolves into a discussion about their family history, values, and customs.”

For young families, financial literacy lessons can take the form of short, fun weekly meetings. Liersch recommends value-based conversation starters: What matters in our family? How do we feel about our family? What could we do to help someone else, such as philanthropy or charitable events?

If you give your kids an allowance, talk about what they spent it on and how it made them feel. “If someone is asking a lot of questions, go where the energy is,” Liersch said. “Maybe they are the early adopter for financial literacy.”

And your efforts will pay off. Almost nine out of 10 survey respondents say, though they anticipate significant amounts of money in an inheritance, the most important thing they will inherit is their parents’ values, not their money.

4. Build financial fluency and independence

Although nearly all inheritors in the survey say it is important to earn their own living versus relying on their parents for financial support, most receive financial support into adulthood. But substantial numbers say depending on parents creates pressure and feelings of embarrassment. Liersch warns of “unintentionally disabling people from being fluent in money.”

Your goal is to raise a child who is fluent in money and independent. “Think about the first time you bought something using credit and paid it off, then the second time and then the third,” said Liersch. “Each time you go through that process, you become more fluent. You understand the pros and cons of using credit to make purchases.”

Independence is about being able to confidently navigate money decisions without any help from a family member. “This doesn’t mean you don’t rely on others,” Liersch said. “Instead, you can live on your own and manage your own financial situation.”

And, as Boudewyn said, “There’s no one way to do it.” So have a chat and see where opening the lines of communication can take your family.


About the survey

Versta Research conducted the online national survey of 551 adults in their 20s and 30s who expect to inherit at least $1M from their parents. The survey was conducted January 3–24, 2022. Assuming no sampling bias, the maximum margin of sampling error is ±4%.

About Wells Fargo Wealth & Investment Management – April 14, 2022

Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company and is one of the largest wealth managers in the U.S., with more than $2 trillion in client assets. WIM serves clients through the following businesses: Wells Fargo Private Bank serves high-net-worth and ultra-high-net-worth individuals and families. Wells Fargo Advisors provides advice and guidance to help clients maximize all aspects of their financial lives. Through Wells Fargo Private Bank, WIM is also a leading provider of trust, investment, and fiduciary services, including personal trust services and a number of specialized wealth services designed to meet the diverse needs of high-net-worth clients.

Wells Fargo Private Bank provides products and services through Wells Fargo Bank, N.A., Member FDIC, and its various affiliates and subsidiaries. Wells Fargo Bank, N.A., is a bank affiliate of Wells Fargo & Company.

Brokerage services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker dealers and non-bank affiliates of Wells Fargo & Company.

Wells Fargo Bank, N.A. offers various advisory and fiduciary products and services including discretionary portfolio management. Wells Fargo affiliates, including Financial Advisors of Wells Fargo Advisors, a separate non-bank affiliate, may be paid an ongoing or one-time referral fee in relation to clients referred to the bank. The bank is responsible for the day-to-day management of the account and for providing investment advice, investment management services and wealth management services to clients. The role of the Financial Advisor with respect to the Bank products and services is limited to referral and relationship management services. Some of The Private Bank experiences may be available to clients of Wells Fargo Advisors without a relationship with Wells Fargo Bank, N.A.

Investment and Insurance Products are:

▸ Not Insured by the FDIC or Any Federal Government Agency

▸ Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate

▸ Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

CAR-0622-01677