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This discussion guide and checklist will help you start financial conversations with your children by providing practical questions to ask, topics to cover and suggested activities to follow.
Some questions to help get the conversation started:
- “Does your new job have benefits like flexible spending accounts, commuter benefi ts, and a 401(k) retirement savings plan with matching contributions? Which ones are you taking advantage of?”
- “How do you decide whether you’re getting a good rate on a mortgage?”
- “What is your asset allocation strategy, given your long-term investment horizon?"
- “Should you use your annual bonus to boost your savings or splurge on a big-ticket treat?”
Financial topics to know:
- Purchase first home – Learn how to evaluate what you can afford, how you can prequalify for a loan, and how to compare different mortgage offers. Discuss the advantages of choosing a lender that already has a relationship with your family.
- Ongoing financial planning – Understand the importance of a periodic financial planning evaluation to make sure spending and saving are aligned with goals.
- Charitable giving – Take a bigger role in the family’s philanthropic activities or forge a new path.
- Investing – Reinvest gains from investments rather than spending them, and fi nd longerterm investments that help to build a company.
Activities to help teach:
- Use online tools and apps to track personal fi nances and investments to keep on track. Do a quarterly self-evaluation of fi nances and meet with an advisor twice a year.
- Take a more active role in the family’s philanthropic activities by implementing a project or suggesting one to add. Prepare to argue why the cause is worthy.
- Set up an investment account and have money automatically deposited to it every paycheck. Avoid the temptation to track the portfolio daily.
Actions to reinforce financial focus:
- Establish additional investment accounts if you’ve maximized contributions to tax-advantaged retirement accounts.
- If your employer offers a 401(k) retirement savings plan, take advantage. Don’t miss out on matching contributions.
- Begin to make those first big financial steps, including buying a first home.
- Make time to give back even with a busy schedule.
- Meet with the family financial advisor for periodic checkups.