Family financial traditions enrich your family's financial life by honoring and celebrating the economic habits and values in which you deeply believe. They can be both powerful and fun and are also always personal. Here are some ideas and examples.
Marking New Financial Life Stages
Financial traditions can mark a new financial life stage as someone shifts to a new level of maturity, awareness, and responsibility with respect to money matters.
- Helping a younger child open a first savings account with some birthday gift money.
- Going to the bank to open an IRA account with your child the first time he has earned income.
- Having a young teenager, who has been newly entrusted with a family credit card to carry and use "in case of emergency", "pay" for the next family restaurant meal, and in so doing learn how one approves a bill and adds a tip. (Don't assume your child knows what you have been doing all these years as you complete a credit card purchase in front of them!)
- Arranging for a child who has turned age 18 (or whatever the legal age of majority is in your state) to visit alone with an estate planning attorney to draw up Durable Powers of Attorney for both medical and legal affairs.
- Having a set order of expenses or steps that parents cease providing as their young adult child matures financially, e.g. ceasing payment first for entertainment expenses, then perhaps for clothing and cell phone expenses etc., and then also shifting to the child responsibility for preparing his/her own income tax form.
- Unveiling to a child in a planned way the details of her potential inheritance—along with the family beliefs about how inheritances are to be handled.
- Sharing the details of your personal finances with your adult child, one of the most profoundly affirming experiences for the child and a reassuring safety net for the older parent.
The achievement of a specific financial goal requires a series of small, cumulative steps and is often celebrated with a special event or purchase.
- Hosting a party to celebrate the full payment of student loan debt, often after many months of significant scrimping on daily purchases.
- Popping open the champagne to celebrate making the last payment on a mortgage.
- Marking various human capital milestones with a special purchase or experience, for example, when a young adult accepts a first full-time job, when a mid-career worker earns a bonus or a long-sought promotion, or a business owner reaches a stretch revenue or profitability goal, and of course, when someone retires from a long-held job or career.
Communicating Deeply Held Personal Values
Money is inextricably related to meaning, and family financial traditions are a vehicle for conveying that meaning.
- Offering a financial match and personal affirmation to encourage a habit of regular savings.
- Contributing to education expenses for the next generation as a way of affirming a bedrock belief in the importance of education.
- Framing and displaying the first dollar earned to support the building of human capital.
- Inviting wide family participation in charitable decision making.
- Writing separate checks for each spouse when giving a holiday gift to a young couple in order to emphasize the value of personal autonomy, responsibility, and freedom.
- Committing to an annual conversation with your partner to refresh a mutual understanding of personal goals and the financial steps needed to meet those goals.
As you consider the ideas in this post, what thoughts come to mind about your family's financial traditions? What are your most deeply held financial values? How are you honoring and celebrating those values? You are invited to share your ideas in the comment section below.
Photo credit: JenCon