“It is not enough to be financially literate-we must also become financially mature not just for ourselves, our families, and our communities, but for generations to come.”
All right family. Let’s. Talk. Money.
Throughout history, families have been the backbone of achieving generational wealth, building legacy, and increasing leverage. From the Rockefellers to the Rothschilds to the Waltons, it’s no wonder that 95% of the world’s wealth is controlled by 5% of the population. Investing in your family’s financial health means investing in your family’s future, ensuring that over time, wealth, leverage, and legacy extend beyond the first generation. This is especially important in the Black community, as nearly 70% of the children of those families who attain middle-class status do not progress, but too often regress because money is not a welcomed topic of conversation, but instead a point of contention.
So why is there such a disparity within the Black family as opposed to other ethnic groups? While it is true that the centuries-long exclusion of Black and brown people at the financial table has attributed to the wealth gap, there seems to be an even bigger issue at hand.
Financial literacy, education, and maturity. What’s the difference and what’s the big deal?
Typically, we see the terms financial literacy and education used interchangeably without understanding the conceptual meaning of each. To be financially literate implies we have basic knowledge, comprehension, and have acquired a skill set that once applied, will enable us to be successful. But to be educated means we continue to embrace and engage in new information throughout our lifetime as learning never stops. For example, gaining basic reading skills is key to being literate. But the education process continues as we expand our vocabulary, develop our critical thinking, and understand the nuances of certain genres. The same scenario applies to understanding finances. Your family may understand the basics of budgeting and saving but is everyone actively learning the concepts of compounding interest, proper investing, and the importance of healthy credit, to successfully manage their money? Are currency conversations commonplace in the household?
When it comes to families and wealth, ongoing attention to financial education is critical to creating a legacy that can be passed on to future generations. It’s not enough to delegate this work to just one family member, as children must also be educated, engaged, and empowered to play an active role.
Here are three tips to make sure your family is not only financially literate but also financially mature:
Embrace Currency Conversations as a Family Value
We can’t heal what we don’t reveal, and generational poverty and pain are no different. Taking time to come together and have open, honest, and real conversations about money and your relationship with money can uncover any limiting beliefs you may have about money. As a family, becoming financially educated and approaching the learning process as a journey is important and ensures the younger generation understands money principles and best practices.
Start Young, Start Early, Start Now!
The next step and arguably the most important is fostering an atmosphere that promotes curiosity and continuous learning, in which ongoing critical thinking is applied to financial matters. We should continue to challenge our assumptions about our finances because the world is evolving around us. Families—like businesses—should incorporate innovation-friendly habits to ensure future success. Examples can include having younger family members manage household spending for the month, or encouraging each family member to research an investment idea or charitable cause. Building in opportunities to exercise and grow money knowledge is key and should start early.
Guide and Mentor Each Other By Focusing on Your Strengths!
One of the best resources for learning is communication. As a family, it’s important to see each other as financial partners who can provide and receive needed advice. To this end, center discussions around your family’s future and pose provocative questions that can help you think critically together. Some suggestions are: Is there anything you think the family should discuss but hasn’t been addressed? What new tools or technologies could the family use to function more effectively? What are the passions and interests of each family member?
Certainly, the family that learns together, earns together, with each generation adding to the financial legacy.
About the Author:
Rachel Roberts is self-described fitness and financial enthusiast, with a passion for educating families, communities, and the like on the importance of financial literacy, maturity, and freedom through the tool of currency trading via the Foreign Exchange Market (Forex).
Want more tips and tricks on how to leverage your legacy? Follow Rachel Roberts on Facebook @wearecurrency, IG at @thecurrencycoach. Sign up for our mailing list at email@example.com for more investing, trading, and business boost tips!
Rachel Roberts is a contributing financial and wealth-building writer for Real Women Atlanta Magazine (RWAM).