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Dollars & Sense: “Families & Money”

Dollars & Sense: “Families & Money”

When you hear the phrase, “let’s have a family meeting”, you may immediately think, “oh no, who’s in trouble now?” or “something big is happening and it can’t be good”. Family meetings are typically called upon by parents; it is when Dad or Mom says, “We have something important we want to talk to you about”. There are many visions that come to mind, none pleasant, but the least expected purpose of a family meeting would be to discuss what Dad and Mom have done for their financial futures and how it may or may not impact their children and their families.

It is an important discussion. Most parents have taken considerable care to make sure that they will be as financially independent as possible so that they won’t have to rely on their children. They have kept up to-date with their estate planning and want to be sure everything is in good order. Many retired parents want their children to know and understand the importance of planning, but equally as important, they want their children to know and understand what they have put in place for themselves.

Of course, your children will say, “Dad, I don’t really care about the money, you and Mom do whatever you need to”. They don’t want to know anything, until they have to. And that day will come when they will need to implement your power of attorney or be responsible for health care decisions, and finally, to understand their responsibilities as an executor or executrix of your estate. The challenge will be discussing the importance of these documents without talking about “money”.

Before you have that meeting, it might be helpful to understand how differently each generation thinks about money, retirement and savings. Traditionalists (those born before 1945) have strong financial values. They have worked hard, saved hard and generally did not create wealth from their own parents. They are also tight to the vest and do not feel that their children need to know the details of their money. On the other hand, “trailing edge” Baby Boomers (born between 1946 and 1964) generally have not done a great job about saving for their future and may even be relying on their inheritances to secure their own retirement.

Generation X is somewhat of a mystery when it comes to finances. Born between 1965 and 1979, Gen X is often referred to as the lost generation. Perhaps because they have such a smaller population (60 million) and feel dwarfed by Baby Boomers (80 million). For the most part, this generation went to college, graduated, got a job and moved on. While some generations crave financial independence, a pension and social security, there are others, like Generation X, who believe they have a better chance of seeing an alien in their lifetime than they would a social security check! Skepticism runs deep.

Our newest generation, are referred to as Millennials. Millennials (Mills) were born between the years of 1980 and 1995. There are actually more Mills (by 2 million) than Baby Boomers and as of recent months, Mills have surpassed Baby Boomers in the work force. Studies show that Millennials are not motivated by money, the financial landscape is different for Mills. Realize that back to the 1960s over 60% of all Baby Boomers had careers, were married, having children and buying houses of their own. They were motivated to support their families and begin their lives at a young age. Mills currently have the lowest rate of marriage than any other generation, under 30%! Of course they think of money differently, they don’t have the same financial responsibilities. Also realize that our Millennials have been scarred by the recession and the loss of wealth their parents experienced with the financial collapse of Wall Street in 2008. They also have the most extreme college debt known to any other generation.

So, when children, parents and or grandparents discuss money, of course they have very different beliefs and opinions. It’s either they spend too much, they don’t spend enough, they don’t know how to save, they buy everything, they save everything, etc., etc. So when discussing money, take a giant step back and think about the financial environment and challenges that shaped that person when they were growing up.

To all the Dads out there – enjoy Father’s Day!

Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or roberta@nestorfinancial.com.

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