Generational Financial Responsibility

As with most skills, talents, and overall 'education' gained throughout a lifetime of experiences, remember - practice makes perfect, and consistency is key. We suggest that when imparting knowledge of finances; from children saving change in a piggy bank, to teenagers saving a percentage of an allowance or gifts in cash, working with them in a mentor role, as they start their very own bank accounts is critical to generational success. 

Practice Makes Perfect 

Every day, month, quarter and year, there are activities and habits needed to be accomplished consistently. This helps ground children in the basics of financial literacy, which are appropriate to their family wealth factors and long-term responsibilities such as philanthropy. 

Children who will inherit significant wealth and the responsibilities that go along with it, require world-class preparation. Balancing income and outgoings and understanding compound interest is one thing, but managing assets, establishing a growth-mindset, and teaching a child to have vision, is another. Parents may have built up a very successful business, but your children may someday need to sit on the board and also approve the management of investments that support an extended family.

One way to engage children is to play off of their passions; otherwise, financial education will feel like classroom instruction. There are "family wealth advisors" who work with families to identify the things their children already have an interest in, and are willing to spend time pursuing such as a favorite sport or activity. From this identification, these counselors develop a learning program around the child's interest or passions as a theme. 

The end goal is to help each family member of the next generation to have an individual 'economic vision statement,' and to have developed the skills required to realise their unique vision and support in turning the vision into a reality.

While many families want their children to understand the basic concepts and terms, their children need to go beyond the introductory level of money management to incorporate family values, such as those related to charitable giving or volunteering, as well as their particular interests in participating. Their 'economic vision statements' themselves will evolve as these children mature and become more focused in their individual interest and goals. 

Consistency is Key 

Every family takes for granted that if a child is going to be a proficient at tennis, golf or the piano, they need regular lessons, a great teacher, and practice. It's that same thing for financial education. And so, those kids who get practice, great instruction, and lessons do better." By incorporating the "passions" and interests of your children - regardless of age. 

Those parents who hope a financial education specialist can take their kids and tutor them may have good intentions, but they're not taking necessary actions to address the challenge. Parents and children must be involved. To do it otherwise is just a waste of time and money, not every family has the appetite to take on this work. It's costly. It takes a fair investment of time. And it certainly requires all family members to begin to look at their actions in a different way. In general, there's certainly interest in financial education, but I think a lot of it is just trivial unless there's an ongoing commitment to the process. The commitment needs to be at least as powerful as the commitment to building the next pro golfer.

Planning for Financial literacy 

Learning starts early - just as models of non-productive behavior do. While parents may have good intentions for raising money-mature children, they often fail to succeed because they don't move from 'soft' intentions to a realised program of financial education tailored to the age and interests of the next generation. 

The kids who do well have parents who've gone from good intentions to being intentional. Every parent has the good intention for their children to grow up financially intelligent, but few of them really act on it. Parents who have a growth mindset, are committed to their intentions can help ensure the orderly transition of financial planning from parent to child.

Hot Tips: 

• The prime age is between 6 and 14 for learning and building good, solid money skills 
• Preparation for building and managing wealth is an on-going activity, if you want to create and sustain long term generational financial responsibility
• Consistency, planning and practice truly does make the real difference

Money Disparity between Husband and Wife

When both partners work, share household duties and merge their salaries, you would think that these changes are for the better, for women. Unfortunately, not all of the changes are good as a large majority of women have received plenty of less desirable results. 

According to the Pew Research Center. Only 3.8% of women earned more than their partners back in 1960, but a 2020 TD Ameritrade survey found the number of female breadwinners had jumped to 21%. More than a quarter of women reported that they made as much as their male partners.

Studies also showed that when a women out-earns her husband, he is more likely to cheat. In fact, about 15% of the men in a study by the American Sociological Review.

(opens in new tab)

The sad fact is that when we earn more than our husbands, we experience more stress on the home front and all have claimed that making more money is hurting the marriage. 75% of us have said that we wished we weren't the breadwinner. The survey asked divorced women and 66% responded that making more money led to the divorce.  

Note, that Gender roles are changing in other ways as men are increasingly willing to pitch in around the home and many do dishes and cook the meals. However, when men are unwilling to participate in household and childcare duties even though they're earning less money than their wives, many marriages fail. 

In order to succeed in this situation, a couple needs to have a partnership in their marriage. Both spouses should have similar values regarding work and money management, and share household responsibilities equally. We need to converse prior to marriage with the expectation that the husband may not be the main breadwinner. 

In order to alleviate as much stress and tension as possible, couples should address their expectations for earning power. Historically, men associate their self-worth with how much money they earn, more than women do. If the wife is earning more, we deserve to have more say in how the money is managed. Many women need to negotiate this issue as it can be a taboo subject is some relationships. You need to align on how will the funds be handled differently? Will your household responsibilities change? If the wife is earning more money because she is spending more time at work, a couple seriously needs to discuss household and childcare responsibilities. In the end, what makes the most sense? It's not about women making all the decisions, but that couples are sharing the decision-making, now. 

A couple must agree that money doesn't equal power and their relationship is worth much more than either before they can adjust to the new model of marriage. By creating unambiguous marital roles and fully addressing all aspects of the family finances, especially how it is handled, you can survive the changing financial and employment landscape of today. In the end, it's about attitude, as opposed to the actual dollar amounts that cause the most conflict. If either spouse feels resentful or critical, it will eventually come to the forefront of any argument and ultimately destroy your marriage. 

How To Be A Great Partner With Your Finances

How To Be A Great Partner

Just being romantic has to mean a variety of things to each and every person, but as you and I both know, romance involves doing that little extra to express affection in a meaningful and sometimes unexpected way. Unfortunately, a lot cannot be done the way you want because of money and finances. We know that the true act of romance requires creativity and above all sincerity, which is often inspired by love. 

One of the better ways is to treat your partner like you are single... , remember when you were trying to earn their affection and trust. And we all know that the opposite of being romanced can and will backfire when it presented as some kind love sick game and gets taken for granted. No one wants to feel like they have already been trapped... because quicker than you can blink... it's over and done with.

In a marriage relationship, communication is the best policy. Having your finances in order can be a great help with that. It can at times be difficult, but the simple truth allows relationships to breathe. No matter what happens, no one can ever challenge the fact that you are truthful, which in itself means that the other person will invariably end up giving you the same respect. When communicating with your partner, believe me, they will be the first to let you know if something does not suit them and if it does not feel right or good... they will not trust you or your opinion in love, marriage, romance or money. 

While you are dreaming up ways to win their affections... make sure not to talk their ear off,... but do make sure that if you have any problems that could possibly affect their mood, they are made aware of the reasons for those concerns. Make them the center of everything around you when you're talking to them. If you ask your partner a question, ask because you really want to know the answer. And above all, please... pay attention to that answer. You would be surprised how far that little gesture will carry you up the mountain of love, affection and understanding. 

In discussing opinions, try to see their side and understand the reason why they feel or thinks the way they do. Make sure you are really actually listening, not just waiting for your for turn to insert some interesting little quip that makes you look good. Great partners honour their commitments, accept their duties, portray their loyalties and are accountable for any and all damages, debts and other problematic happenings they make along the way in the relationship. 

Be the bigger person and clean up after yourself and your finances (figuratively and literally). In sharing responsibility, both men and women know that anyone can father a child or give birth... but only a person who understands and accepts that responsibility can be a good parent. How to be a great partner means that you refuse to make anyone do anything that you yourself are unwilling to do. 

Studies Show Struggling Economies Hit Women the Hardest

An increasing number of women and self-employed individuals are suffering from major debt problems that, if left unattended, can eventually cause insolvency. 

Income loss is the most common reason why people enter a Debt Management Plan (DMP).

Figures from the ONS confirm the fact that the economic downturn has forced women and the self-employed to struggle to make ends meet. More and more employees who used to work full-time are now on shorter shifts or have only very few work opportunities. Furthermore, there is a skills shortage and despite jobs advertised, many do not have the skills required to fulfill those roles.

What to Do Now? 

Anyone who's faced with serious debt should get advice at the earliest possible stage. Many countries offer free advisory support, so please check government websites as a starting point.

Employees who have very limited disposable income and whose debts are below a certain threshold can resort to a debt relief order. If debts are higher, the best option would be bankruptcy. Note that every country has different rules so please check for your geographical region. 

Every financial situation is unique and any action should be done with caution. Some experts suggest that the initial step should be seeking professional help from a qualified IVA or debt adviser. More importantly, when in the midst of income loss, people should start prioritising bills and payments, such as mortgage, insurance, council tax, and other necessities. 

It's always good advice to speak with lenders and financial services first to inform them about your status and find professional assistance. 

The key to get out of a spiral of debt is to tackle impending financial problems before they really hit. This way, you can get back on your feet and eventually have your finances back in good shape.