What Financial Legacy Are You Leaving? Part I
Many people do not think about the financial legacy they are leaving to the generations following them. If they do, it is usually not until they are nearing or in their retirement years. The topic is not common in conversations for obvious reasons. Can you imagine how a conversation might go especially for those who haven’t given the topic any thought? It could be rather uncomfortable.
The formal definition of legacy is when a person leaves money to their heirs. My husband and I want the legacy we leave to go deeper than just leaving money. We want to instill an encouraging attitude into the generations following us that translates into positive actions. To accomplish our vision of a financial legacy, we believe it takes intentional effort and involves several areas of thought such as financial education, integrity, stewardship, end of life preparation, retiring debts, and generosity.
Hearing about an individual squandering an inheritance within a few years with nothing left for future generations is more common than we might think. One way to avoid such a disastrous outcome is to start teaching children at an early age.
Children are sponges, soaking in their surroundings through formal and informal teaching. Learning often comes from watching others. When children learn positive habits through repetitive action, it becomes second nature to them. Every day I do many tasks I do not remember learning how to do. I learned some good character lessons such as sportsmanship from those leading me when I was young. I don’t have to think about these things; they are second nature to me.
Repetitively teaching children money management skills while adding new information will increase the chance good financial behaviors are second nature when they are adults. Have older kids? It’s never too late to start!
How often do we justify our actions based on someone else’s behavior? More than we care to admit. It’s tough, sometimes, to do what others are not doing; to be different. Our children learn integrity by watching those who they respect. My daughter and I went shopping the other day and made it out to our vehicle to realize a product got trapped under my coat. We both knew I had not paid for it. It was cold, the checkout lines were long, and the item only cost a few dollars. I could have easily said, “Oh, it doesn’t matter, it’s only a couple of bucks;” however, I knew my actions would have a huge impact on her as a teenager. I knew I had one opportunity to demonstrate integrity in that moment and back into the store I went and paid for that item.
We are presented many opportunities to demonstrate integrity and more people and children are watching than we may realize. I have horribly failed in the area of integrity many times, but I am trying and learning from my mistakes. Our children watching us through those times, too!
The Proverb, “A good man leaves an inheritance to his grandchildren…” reminds me of stewardship. As most people know, stewardship is taking care of something in an appropriate manner. The assumption is effective stewardship of money will lead to an inheritance to heirs. Most who work toward leaving a monetary legacy do so with their children in mind, but probably not with their grandchildren.
The thought of leaving a legacy in the form of money only to grandchildren means one has to either 1) skip their children because their parents left a monetary legacy for their children, or 2) trust their children to be good stewards of what they left to ensure there will be a legacy for their grandchildren.
Next week, we will discuss Part II, end of life preparation, retiring debts, and generosity.