Parents and their adult children need to do a better job discussing family finances, a new study finds. It’s time for a family meeting.
Teachers Insurance and Annuity Association of America, a provider of financial services in the academic, research, medical, cultural and government fields, recently conducted a survey to find out how well families are communicating about money.
The answer: not so well.
Many families find it tough to start conversations about money, but parents and adult children who talk about finances feel more positive about them than families who don’t, TIAA found.
To help more families start talking, TIAA has developed a toolkit and other resources informed by the new findings.
The resulting video, “Family Money Matters,” depicting real families talking about their finances, shows that these conversations don’t have to be uncomfortable. Instead, they can be highly valuable when planning for future financial goals and obligations, and for managing the transfer of family wealth between generations – now and in the future.
An Important Conversation That Isn’t Happening
While both parents and adult children consider financial conversations to be very important (74 percent and 87 percent, respectively), surprisingly few people surveyed in either generation are very likely to start a conversation about any financial topic (just 11 percent of parents and 37 percent of adult children).
However, the survey finds that the lack of conversations between parents and their adult children lead to a number of misconceptions around the state of their families’ financial health.
Although many family members believe wealth is shared only as an inheritance, the survey shows that nearly all parents and children are already currently providing some form of material financial assistance to one another.
Yet parents and adult children often don’t perceive themselves as receiving significant amounts of money from the other generation during their lifetime.
One of the main reasons that families aren’t talking about finances is that both parents and adult children believe that these discussions would be awkward or that the topics discussed would bring up uncomfortable emotions.
There are new ways to overcome these communication gaps, TIAA said.
Being prepared with the right questions and tools can help families feel more positive about these discussions. For example, nearly half of parents (45 percent) who frequently talk to their children about their future financial plans feel proud about how those conversations went.
Get the Conversation Started
For additional information on the importance of family conversations, TIAA has resources at TIAA.org/conversations, and educational materials and articles, such as “Five Reasons To Hold A Family Meeting Now,” “Family Meetings: Start The Conversation” and “Living In The Sandwich Generation.”