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Coach clients to give their child a worksheet with 25 items, and ask them to write their estimated price for each one. Have the children them find the actual prices and compare. Going deeper to compare prices—including unit pricing found at the grocery store and differences in quality among similar items—are just some of the follow-up discussions to illustrate just because one item looks like it may be less expensive, it doesn't mean it really is.
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Coach grandparents to discuss a savings plan where they match the child's contributions and put funds over time toward an expensive toy is equally valuable. Delayed gratification is one of the best skills a young person can develop for success in life, and this exercise is a great way to teach it.
How To Save
Potential Exercise: Budgeting (lesson is make saving a part of everyday life). By age 16, a child should know how to make and maintain a budget. This is also a great time to teach youth about the power of compounding and investing over the long-term, as well as the importance of having an emergency fund.
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Coach clients to ask their children to provide a list and analysis of the three best "budgeting programs or apps" and propose to you the best one. Have the parent assist the child in any way to set it up and then help teens start a savings or checking account, and consider investing in mutual fund that pulls money each month from the bank account.
Knowing that these "conversations" are ongoing and repetition is needed provides advisors a valuable avenue to connect with clients and make a unique difference in the lives their family. It may also make the difference between preparing heirs to preserve wealth long term, or not…and your organization keeping a strong family relationship.
Shari Burnum, founder of Investor's Resource, specializes in holistic wealth management for owners, professionals and other high-net-worth individuals.