Giving your family the gift of financial literacy

Is this you?

Do you have a spouse that leaves the financial decisions up to you? Do you worry what will happen when you are gone? Do you see your adult kids struggle with money and are not sure how best to help?


Overcoming  family financial ignorance empowers your family, preserves your wealth and brings the family closer

A financially literate person is one who knows how to earn, manage, spend and save money. The more financially literate they are, the better at this they become.

My 30 years in the wealth management business has shown me that in most families, you have one financially literate person that earns, manages and saves the money, while all the rest spend it.

That puts enormous burden on the “literate” one while others get to ride their coat tails. It puts the power in the hands of one and creates dependency for everyone else. This power inequality can be explosive in family relationships. This dependency can sap self-esteem and ultimately can deplete the money. That is not a formula for wealth preservation or family unity.

How do we overcome the dis-empowerment and dependency that a lack of financial literacy brings?

When kids are young of course you can give them lots of opportunities to learn about money such as understanding the difference between wants and needs, and the empowerment that comes from earning money to buy the things they want. It gets trickier though when they get older.

You could buy them a couple of good books on how to budget, save and invest their money.  But I would suggest to you that if they haven’t already read something like that, they aren’t going to start now. They frankly may find it dry and boring.

You could hope that the school system will teach them these concepts. Thank goodness schools are taking this more seriously now and including some aspects of financial literacy, to varying degrees, in their curriculum. That helps, but it is not enough.

These approaches have limiting effects because they are mental, not experiential approaches to gaining financial literacy. Financial knowledge and financial wisdom are two very different things.

When my three kids were teenagers, they were a lot more interested in the passions of romance than they were TFSA’s and RRSPs. Now that they are young adults, they are far more interested in sculpting their lifestyle and paying rent than they are in building a portfolio and evaluating price/earnings ratios of stocks. They don’t remember much of what they learned in school about finance. Any book I give them will remain unread. And yet, I know they want to learn because their experience of trying to make ends meet is front and center for them.

Ler me share with you the approach we use with our client families and within my own family to give the gift of financial literacy without it feeling like work.

 In my book, True Family Wealth; Love, Money and an Inspired Life, I talk about holding  Family Treasury Roundtable meetings with your adult family members. Family’s get together all the time and they often talk about family relationship issues. But rarely, if ever do they also talk about money at these family gatherings. As I have said before, financial conversations and family conversations rarely happen in the same conversation, yet each affects the other profoundly. It is time to start a new conversation by formalizing a family meeting for this very purpose. We can do that by acting more like families in business do. We create a formal, respectful space to honor each other, our creativity and the monetary resources that help us live our best lives. This approach serves to build family financial literacy in a number of ways.

  • Every member of the table is equally respected regardless of age or family position. Power labels are left at the door. This way everyone brings their “A” game with more confidence.
  • As in any good business meeting, emotional maturity is expected and encouraged which creates a safe place for sharing and opportunities to resolve family issues, and bond more deeply.
  • It honors the money in our lives through acknowledgement that it is a creative force to be respected and valued.
  • It allows members to share their experiences with money, the good, bad and ugly so they can learn from each other.
  • It creates an opportunity for book clubs or speakers to offer knowledge based on the groups own interests.
  • Just like businesses do, it allows the family to work together like a team to solve problems, set goals and together create strategic plans to meet them.
  • It educates by highlighting false or limiting beliefs about money and replacing them with empowering ones.
  • It gives a sense of togetherness and a feeling of safety to all who are part of it.

 We are stronger together than we are apart. Family Treasury meetings build financial literacy in a way that is experiential, directly relevant to life and the needs and interests of the family members. And this builds wealth stewards; family members who work together to preserve family wealth and unity through financial wisdom.

Chris Clarke draws on 30 years of experience as CEO and Co-owner of First Affiliated Holdings Inc. She is a Chartered Professional Accountant, Trust and Estates Practitioner, and a Registered Financial Planner. Clarke is also certified as a Family Facilitator by the Canadian Association of Family Enterprise. Her new book, True Family Wealth-Love, Money & an Inspired Life, can be bought on and at bookstores.