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Ideas to Engage Your Family in Financial Education and Communication

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By Josh Espinosa CFP®, CIMA®

As a parent or grandparent, it can be difficult to ensure your children and grandchildren have the wisdom and knowledge necessary to take on life’s obstacles. It can sometimes feel like a minefield trying to navigate the difficult waters of providing just the right amount of assistance and security while giving them room to build resilience and independence. There is no one-size-fits-all when it comes to parenting, but instilling positive financial habits early in life is beneficial to everyone. There are many different ways to engage your family in financial education. Below are some ideas to involve the next generation in the financial planning process:

  • Purchase a piggy bank for new births in the family or a US coin map. Additionally, stock certificates from familiar brands are an interesting and relatable way to start teaching kids about stock ownership and investing. You might have them choose from a selection of companies they enjoy, such as Lego or Disney. Framed certificates could also make a great gift and some are even considered collector’s pieces.
  • Open a 529 plan when there is a new birth; you could also gift up to 5 years upfront. Under the Tax Cuts and Jobs Act passed in December 2017, you can use $10,000 to pay for secondary education per year. In addition, under the Secure Act that passed in December of 2019, the federal government allows a one-time payment of up to $10,000 to be used to pay back student loans for any family member. State Education Plans, such as the Florida Prepaid College Plan, is another great way to save for college while locking in today’s tuition rates.
  • Give the gift of stock or mutual funds via a UTMA (Uniform Transfer of Minors Act) orUGMA (Uniform Gift of Minors Act) custodial account. These accounts allow minors to receive assets and allows the gift giver or an appointed custodian to manage the minor’s account until they are of age. They often shield the minor from tax consequences on the gifts, up to a specified value. If the family member has earned income, you could also help fund a Roth IRA account. This is often a great way to accumulate after-tax savings. Savings accounts can also be a nice way to start saving for a special milestone.
  • Share books at an early age that can make an impact – (i.e. Lemonade in Winter, Pretty Penny Cleans Up, I Will Teach You to Be Rich, The Intelligent Investor, The Greatest Salesman in the World, Richest Man in Babylon, Rich Dad Poor Dad, etc.). As they get older, challenge them with book reports, while providing financial incentives. Expose them to thought leaders via live presentations, podcasts, or TED talks. In Naples, we have the Speaker Series and Imagine Solutions events; in New York State, there is the Chautauqua Institute.  
  • Involve your family in charitable giving to pass on a legacy of philanthropy. This can be done via a Donor Advised Fund or gifting to an organization of their choosing.
  • Introduce your family to your financial advisor and other financial professionals. Having them involved early on in the legacy planning process helps create a connection, which could lead to further communication, preparation, and organization.
  • Hold family meetings to discuss responsibilities, goals, and wishes. This can include charitable giving, end of life wishes, transfer of heirlooms, etc.
  • You may also want to have meetings with your family and financial advisor, who can act as a facilitator to review your estate documents, financials, and family communication.
  • Setup and share important financial and estate documents with your family utilizing online document storage and secure file sharing system. Ciccarelli Advisory Services has a system, cas360, which offers clients their own personal financial website where they can securely access all their financial information and save important documents.
  • Most importantly, give the gift of a financial plan to your children and family. Many of our client families have taken advantage of this great benefit. If you would like to learn more, our advisors can provide further details on this thoughtful gift option.  

Financial literacy is not something most people learn overnight, but like many assets, its value can potentially increase over time. As your children and grandchildren grow and develop their own financial goals and dreams, a foundation of fiscal knowledge and open communication could help them build upon the legacy you set forth. 

Investment advisory services offered through Ciccarelli Advisory Services, Inc., a registered investment adviser independent of FSC Securities Corporation.  Securities and additional investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment adviser. 9601 Tamiami Trail North, Naples, FL. 239-262-6577.

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