How to Have Conversations About Money With Your Family

Talking to your family about money isn’t always easy, but there’s some good news when it comes to how open Americans are to having these types of conversations.

According to the latest findings from Northwestern Mutual’s 2023 Planning & Progress Study, Americans think kids are ready to have their first conversation about family finances at age 17. And the trend over time is to talk sooner. Those in the Baby Boomer generation say they had that first family money conversation when they were 22, while Gen X said 20, Millennials said 18, and Gen Z said 15.

Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual is encouraged by these findings. “Money used to be the taboo topic in America, but today, it’s on the verge of trending,” she said. “Meaningful intergenerational wealth conversations are taking place more often and earlier in life. Beyond financial planning tactics, these conversations are also moments to reconnect with children on values, hopes, expectations and the financial acumen they need to be successful in the future.”

Andrew Weber, CFP® professional and senior director of planning philosophy, research and guidance at Northwestern Mutual, says that for anyone who has some trepidation about initiating these types of conversations, being honest about your expectations is the best way to go. It can help aging parents and adult children get on the same page about the future—and build better long-term financial plans.

So as you gather together with your loved ones this holiday season, try to find some time between watching the Thanksgiving Day Parade and serving up the pumpkin pie to discuss your family finances. Here are some simple tips for having smoother money conversations with family.

If you’re a parent with adult children

The sooner you loop your children into your financial plans, the better. Your children may end up managing your finances someday, so talking about your situation now will help them prepare for what may lie ahead. Here are some important topics to share:

Your assets and your estate plan

This is an optimal time to share any important information from your estate plan. For example, are you planning on leaving any inheritances?

“What are you going to be passing to them or not passing to them?” Weber asks. “If you're planning on spending down your money to the dollar and not leaving them anything, your children may have to adjust their saving strategies or their spending habits.”

You can also talk about any physical assets of value. Examples of these might include real estate, vehicles, artwork, family heirlooms and digital assets.

Your retirement vision

What kind of lifestyle do you envision for your dream retirement? Does it include frequent travel and luxury trips, or something more modest? If you’re planning on downsizing to a new home, retiring abroad, or relocating, you’ll want to share that with your kids so they know what to expect. It can also help you identify and work through potential conflicts.

For example, if your adult kids have young children, they may be expecting you to provide regular childcare when you’re no longer working. That may or may not be aligned with your retirement goals. Talking about it now can help them adjust their expectations.

Your legacy plan

Gifting is often tied to our values. Now is the time to share how you plan on using your wealth to bring your values to life.

“That might mean buying a vacation home where the whole family can come together, or funding a regular family vacation,” Weber says. “That's a good example of passing on your values and reinforcing to your adult children what’s important to you.”

Alternatively, you may choose to leave the legacy of education by contributing to your grandchildren’s 529 plans. “Putting college funds away is a huge secondary goal for most families,” Weber says. “If you're in the position where you can help relieve some of that savings burden, it could allow your kids to just focus on saving for their retirement."

No matter what you choose, be transparent about how these decisions may affect other parts of your financial plan. For example, if funding those 529s will reduce an inheritance, that’s something you’d want to communicate to your kids.

If you’re a child with aging parents

According to the study, only 29 percent of U.S. adults have talked to their parents or guardians about their wishes regarding inheritance, will provisions and other matters related to their estates; 43 percent have discussed preferences and options regarding their long-term care.

Whether your parents are eager to have these talks as they age or they need a loving nudge, addressing the following details can help prevent stress later down the road.

Talk about support your parents may need

Do your parents have a long-term care plan? If not, do they have funds set aside for care they may need later on? That can include costs related to in-home care or assisted living. Weber says it’s better to talk about these things now, rather than waiting until one of your parents is in crisis.

It’s also wise to ask if they’ve selected durable powers of attorney. You can volunteer to step in if that’s something that feels right to you. This could allow you to make financial or medical decisions on your parents’ behalf if they become unable to advocate for themselves. You can also ask to connect with their financial advisor. This is an especially important step if you’ll be serving as their financial power of attorney.

“If they don't have a financial advisor, the adult child can offer to introduce the elderly parents to somebody who can help give them a plan,” Weber says.

Plan ahead with your siblings

As your parents age, they may need someone to provide financial support or physically care for them. That can become a source of tension among siblings. Weber suggests talking about these things early on, when emotions aren’t running high.

“I've heard of adult children with enough means asking their siblings to go in on funding a long-term care policy for their elderly parents because they know that the parents can't afford it,” Weber says.

Some families might choose to split the cost of an assisted-living facility or nursing home. Others may volunteer to have an aging parent move in with them. Weber says it’s about having a constructive conversation around expectations, especially if your siblings live in different parts of the country. If you live close to your parents, the bulk of the responsibility could fall on you. Planning ahead with your siblings can help keep things fair and prevent burnout.

Keep the conversation going

This can be a lot of information to cover, so Weber advises keeping the lines of communication open and letting it be an ongoing conversation. Because of the high emotions—and high stakes—involved, consulting with a trusted financial advisor can be a great resource for help. But ultimately, what matters most is taking openly and honestly about your family’s financial future.

CFP disclosure:

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

About The 2023 Northwestern Mutual Planning & Progress Study  

The 2023 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 2,740 U.S. adults aged 18 or older. The survey was conducted online between February 13 and March 2, 2023. Data are weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. A complete survey methodology is available.  

Newsroom | Northwestern Mutual - Planning & Progress Study 2023