Yahoo Finance I’m a Wealthy Millennial: 4 Financial Skills I’m Passing Down to My Children
Gen Alpha, and future generations to come, may be on track to receive the financial literacy they deserve.
A new study from Bank of America titled the “2024 Study of Wealthy Americans” reveals emerging trends around generational wealth and its influence on financial strategies. Data from the 2024 quantitative survey shows that 48% of wealthy Americans said they would initiate the conversation when it comes to teaching their children or heirs financial skills.
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What kinds of financial skills are wealthy Americans planning to pass down to their children or heirs? GOBankingRates spoke to Dave Fortin, the millennial co-founder of investing app FutureMoney and a new dad, to learn more about the financial skills he plans to pass down to his children.
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Delayed Gratification
In March 2024, GOBankingRates surveyed 1,008 American adults on a series of questions related to financial literacy. When asked about the poor money habits they learned from childhood, 36% of respondents said they picked up impulse shopping.
This won’t be the case for Fortin. He told GOBankingRates he plans to talk to his kids about delayed gratification. Beyond avoiding impulse purchases, it’s a lesson that will help his children in many other aspects of their lives.
“By using the language of money, you can show your kids the advantages of saving today for something in the future, and how your money can grow,” said Fortin.
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Goal Setting
Another skill Fortin plans to teach his children is how to set goals, which he considers to be important in money and in life.
Learning how to set a goal — whether this is a goal towards going to college, buying a car or purchasing your first home — is only one part of the equation, according to Fortin. He added that it’s important for children to learn how to create a plan that will help them achieve the goal.
Being Good Stewards of Capital
Fortin’s list of financial skills he plans to teach his children include comparing income and expenses, understanding taxes, basic banking products and basic investing principles. Many of these skills are confusing to adults, especially those who lack the proper financial literacy background. As an example, nearly 17% of Americans surveyed by GOBankingRates in March 2024 said they didn’t clearly understand how taxes work.
In a wealthy family, Fortin said it’s particularly important to teach children to be good stewards of capital. This means clearly acknowledging how to manage, use and protect wealth so it fulfills the current generation’s needs as well as the next generation. A poor steward would likely be more inclined to recklessly spend instead of save money or live well beyond their means.
“Wealth can sustain a family, fund great businesses that solve important problems in the world, and do a lot of good through charitable works,” said Fortin. “Having wealth does not absolve someone of the duties of managing their money well.”
The Power of Compounding Returns
Out of any financial skills Fortin plans to impart on his children, the power of compounding returns over time is a skill he considers to be the most impactful lesson a child can learn.
However, many parents fail to teach it. Nearly 30% of Americans surveyed by GOBankingRates said they never learned how to invest growing up. 15 percent also cited a lack of investing as a poor money habit they worried they might pass down to their children.
Wealthy parents that are investing for their children are recommended by Fortin to show them what they are doing. As you show them how to invest, Fortin said parents can use this time to get children engaged and excited about saving and investing and what their future has in store for them.
It’s Fortin’s hope that by discussing these financial skills — delayed gratification, goal setting, being a good steward of capital and the power of compound returns — that he’s able to spark their curiosity about money. Ideally, this spark would allow them to get engaged and develop their financial literacy early.
“By better understanding the value of money, they can make informed financial decisions, and manage their future wealth responsibly.”
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This article originally appeared on GOBankingRates.com: I’m a Wealthy Millennial: 4 Financial Skills I’m Passing Down to My Children
