| 31 July 2009
You and I are subject to 5,000 advertising impressions per day (source: Yankelovich). And it is only getting worse. As the next generation goes online, the 'spend and borrow' messages are hitting them faster and moving money discussions between generations offline. In the speed that technology can now deliver this message of hyper-consumerism, parents and grandparents are being circumvented; causing our society to become more transaction oriented and less interaction oriented. But how do you become more interactive with multiple generations?
The one thing that I miss most about my father since he passed away 17 years ago is the stories. I used to work with him in his business and as we interacted he would tell me stories about growing up and building his business; stories that my siblings never got to hear. This interaction was formative for me because it taught me the family stories, culture and mentoring that became the foundation for my money decisions. The one thing I recognize from this 'new normal' we are experiencing in our economy is the loss of these family conversations.
The loss of family conversations puzzles me because whenever someone asks what to grab if your house were on fire, the answer is always the family photo album. So obviously people want to connect with their family. Yet there is a real disconnect when it comes to having a conversation with the second, third or even fourth generation about money. This needs to change since many studies have shown that 90% of all inherited money is gone by the end of the third generation.
To get started on having money conversations in our 'new normal' economy, start by identifying your financial values. An easy opener across all generations in identifying your values is to do a brand name check (you can download this exercise from www.sharesavespend.com; click on My Money Plan at the bottom of the page). Pick anything, from bottled water and toilet paper to coffee and cars, and focus on what the premium brand name costs, versus the average brand name, versus the no-name brand, and finally against a used item (I am not suggesting drinking other peoples' half-empty water bottles). Once you can determine the costs of items you routinely buy you can then ask the appropriate questions to help identify your true values: What benefit do I get by buying more expensive brands versus generics? And what could I do with the money I save by buying generics? These questions will lead you down the path of deciding how you really want your money to benefit your family.
Once you start this conversation with your family, include all family members in a process for measuring success. Consider a monthly meeting (or dinner) where everyone gets to share a success story (remember that mistakes are going to happen and should not be dwelled upon). Over time you will notice that mentoring is not a function of age and your children or grandchildren might be the most creative at helping the family accomplish big goals. I am convinced that this new economy we are in, if we learn from the last 12 months, can bring our families and our finances closer together.