How Personal Experience Sparked a Passion for Financial Preparedness
In a recent conversation with financial expert Andrew Van Alstyne, we delved into the importance of discussing finances within families. Andrew, whose journey in financial education was spurred by personal experiences, emphasized the profound impact that financial conversations can have on individuals and their loved ones. Here are some key takeaways from our discussion:
1. The Origin of the Drive to Help Others with Financial Preparedness
Andrew's motivation to assist people in avoiding financial under-preparedness stemmed from a poignant personal experience. He witnessed firsthand the consequences of poor financial planning within his own family, particularly with his grandparents. Reflecting on this, Andrew shared, "To see their financial hard work disappear left a mark." The lack of financial conversations within families can leave lasting scars, highlighting the necessity of proactive financial education.
This episode and article should be a sign to you to start talking about money with your family. Though it might be a hard conversation now, it could be one that pays dividends (pun intended) in the future. This isn’t something to take lightly and if you’re family has any money to share after someone passes, the conversations need to be had. Consider taking a look at The 7 Money Talking Points to get some simple conversations started today!
2. Facilitating Intergenerational Financial Bonds
Drawing from Bill Perkins' book "Die with Zero," our conversation explored the idea of transferring assets to family members before passing away. Andrew suggested that initiating conversations about wealth distribution early on can foster stronger bonds across generations. He emphasized the importance of these discussions in ensuring the longevity of family assets, stating, "The transition between generations is smoother when there are conversations happening."
3. The Power of Conversations in Wealth Management
Andrew underscored the pivotal role of communication in managing wealth effectively. He emphasized that the loss of wealth often stems from a lack of understanding among future generations regarding the source and management of assets. By fostering open dialogue about money within families, essential financial principles can be passed down and wealth transitions can be smoother.
If you’ve listened to me on my show and on others shows for a while. It’s likely that you have heard me mentioned the fact that my wife, Rebecca, and I have a monthly budget meeting. Complete with an agenda! While this can seem businessy or not fun, I think it is great. It can also be especially helpful for financial conversations throughout your family. It can help with mitigating the concerns of the long term plans you’re making and make it very easy to refer back to what was decided. I always like to say, “I don’t forget anything because I don’t try to remember it.” Make sure to write down your plans!
4. The Risks of Avoiding Financial Conversations
Our conversation also addressed the risks associated with avoiding discussions about money within families. Andrew pointed out that neglecting to talk about finances can lead to the rapid depletion of wealth. He emphasized the responsibility of older family members to initiate these conversations, while also acknowledging the role of younger generations in facilitating dialogue.
Perspective is something that is important to gather here. Without knowing where each other is coming from, how can we possibly understand why we are thinking the way that we are. This is something that I have learned first hand with how my wife and I handle her student loans. I am all math and Rebecca brings reality into the conversation with her feelings and gets me to think about the emotions behind our decisions. Without the understand of our perspectives, this could lead to us arguing or thinking the other is wrong when it comes to money.
5. Overcoming Tension in Financial Discussions
Navigating conversations about money can be challenging, especially in families with difficult financial histories. Andrew suggested that understanding the underlying reasons behind financial behaviors and setting long-term goals are essential steps in overcoming tension. He recommended using introspective questions, such as "What is your first money memory?" as conversation starters.
A few of my first money memories include paying for gas with a $20 bill for my parents and also saving my money so that I could buy one big gift at Disneyland. The second memory still holds true today as I tend to spend my ‘Skyler’ fund on larger one time purchases. It’s just the way I’m wired and my early money memories help me identify that.
6. The Value of Financial Conversations Beyond Generational Wealth
Even in families without significant wealth to pass on, financial discussions hold immense value. Andrew emphasized that these conversations serve as opportunities for mutual learning and support, particularly in addressing issues like debt. He provided practical advice on initiating financial conversations and lending money within families while maintaining transparency and trust.
Conclusion
In conclusion, our conversation with Andrew Van Alstyne shed light on the transformative power of discussing finances within families. From fostering intergenerational bonds to promoting financial preparedness, open dialogue about money can pave the way for a more secure financial future. By embracing transparency, empathy, and proactive planning, families can navigate financial challenges with confidence and unity. Remember, it's never too early to start talking about money.