Financial planning isn’t just an investment in yourself — it can benefit your partner, children, grandchildren, and future generations. And that statement doesn’t just apply to millionaires or billionaires whose children inherit all that wealth. It’s true for anyone who invests time and energy into making money decisions that match their values.
So, how can you start financial planning for your family? And what can you expect once you do? Let’s take a look at how to build good money management habits that can benefit your entire family.
The Challenge of Generational Money Problems
Think about how your parents or grandparents handled their money. Were they confident in their decisions and financially stable? Or did they constantly struggle to pay bills? Did they have to rely on their children to cover their housing or healthcare costs as they got older?
Of course, sometimes money challenges happen because of circumstances beyond anyone’s control. Just think about how many people experienced financial challenges due to the COVID-19 pandemic.
But in many cases, financial challenges come down to a person’s money habits. If you’ve watched a family member constantly struggle with overspending or unmanageable debt, you’ve probably seen the negative consequences of those financial habits.
Unfortunately, many of these financial problems get passed down to the next generation. Sometimes this happens literally — for example, a child might grow up without stable housing if their parent continually overspends or has trouble keeping a job.
But there can also be figurative financial consequences that get passed from one generation to another. Parents who are constantly worried or stressed because they’re short on funds may unintentionally raise children who feel guilty every time they buy something. Overspending can also have the opposite effect — parents who can’t stick to a budget may raise children who also have trouble regulating their spending.
Financial problems don’t just impact one generation. However, the reverse is also true. Good money habits can also affect your family and future generations. So let’s look at some of the positive outcomes of wise financial decisions.
The Multigenerational Benefits of Financial Planning
Picture this: you have clear financial goals for the short term (e.g. building up an emergency fund and paying for next year’s vacation) and the long term (e.g., paying for your children’s college tuition and saving for retirement). You not only have definite financial goals — you also have a feasible plan to reach them.
Following that plan isn’t just benefitting you. It can also impact both previous and future generations.
Let’s say that one of your parents ends up needing hip replacement surgery and extra care during recovery. You can comfortably use part of your emergency fund to help them pay their medical bills and hire a caregiver for their recovery. That’s just one example of how your financial plan ended up benefiting someone else in your family.
There are countless benefits for your children and grandchildren as well. If you follow your plan to save for college, your children may be able to graduate debt-free. That can make it easier for them to start a family, purchase a home, or pursue a different financial goal. They also grow up learning good money management skills, which makes it easier for them to reach their own financial goals.
Likewise, your retirement savings can also impact your children and grandchildren. Having enough savings to cover your living expenses, medical bills, travel, and other costs means your children don’t have to financially support you. That gives them more room in their budget to make financial choices that benefit their children, and so on.
What Are Your Priorities for Your Family
So if you want to experience those benefits of financial planning in your own family, where should you begin? Start by figuring out what matters most to you. These are the priorities that will guide your goals and your plan to reach them. And they’re also the money values that you will pass down to your children.
So think about what’s most important to you. Is it…
- Living a debt-free lifestyle?
- Retiring early?
- Raising your children in your dream home?
- Being able to travel the world with your spouse or partner?
- Building an intergenerational home that allows your children to grow up close to their grandparents?
- Something else?
There’s no wrong answer — the whole point is to be honest with yourself and your partner about what you truly value. Once you know that, you can set goals and make a plan to reach them.
Making Your Financial Vision a Reality
Are you ready to see what benefits financial planning holds for you and your family? Guiding Wealth is here to support you! Our team of experienced financial planners is dedicated to helping you create a completely personalized plan for your money — one that’s perfectly aligned with your values.
That means we won’t give you one-size-fits-all advice. And we won’t make you feel guilty for having debt or renting instead of owning a home. We’re here to support your pursuit of your goals, whatever they are. And if you aren’t quite sure what your goals are yet, we can help you figure that out, too. Schedule a consultation to get started.