Money is often the elephant in the room. There are so many reasons to avoid talking about it – from kids’ eyes glazing over to parents being terrified of saying something wrong. Often, the result is a deafening silence as the kids go through K-12 and into college. Soon enough, they’re young adults bombarded with financial choices they’re not well-prepared to handle.

So how do you talk to kids about money as they age so they can make good choices and gain confidence handling finances?  I find that often the best place to start has nothing to do with money, budgeting, saving or investing.  Instead, the key issues are kids’ interests/passions and personalities. These are the underlying things that motivate all of us and drive our lifelong relationship to money and how we use it to create a fulfilled life.

Yet interests/passions and what we call “money personality” are not things you can get at directly. Ask a child or young adult “What are you really into? What do you like to do?” and you’re likely to get a blank stare, a shrug or some mumbling. That type of questioning feels like an interrogation. So I work with clients who are parents on different ways to explore interests and passions.

Getting at Motivation

Sometimes, I will put a deck of picture cards on the table. There are photos of many different things and people doing different things. Then I ask both the parent and the child to pick out just three cards that they’re most drawn to. I also choose three cards. And then we talk about why we chose the cards we did. What is it about that particular image that makes it special?

Having an objective outsider – me – initiate and participate in this process puts everyone at ease.  Often, this leads to a relaxed and interesting conversation with children about interests, what’s important to them, maybe even future plans. Quite often, parents learn a lot more about what their children are drawn to, what inspires them. And so do I. Sometimes, I find that people talk about how the different images are related, and those connections provide great insights.

A major reason for this foundational work is to understand motivation. Young people who come into a lot of money often struggle with motivation. I have seen this firsthand. Teens and young adults might look for work but turn down every single job offer because nothing is quite right. Especially when there’s money in the family, why not? The motivation has to be something else – a strong interest or passion in something that is recognized and valued at least within the immediate family. They’re then much more likely to take on challenges and imperfect opportunities in order to develop that interest.

Defining Money Personality

There are certain core personal tendencies that drive interactions with money, which can be spotted as early as age 5 or 6. One child, for example, will stash away all the cash from a lemonade stand while the other spends it immediately. Money personalities can be very different within the same family and can create some problems if not acknowledged and talked about.

I sometimes start with a short quiz that can indicate someone’s core money personality. I do this with parents first so they then can look to see what personalities their children have. Usually, it’s pretty obvious. What is not so obvious are the positive and negative aspects of each personality, and this is something I discuss with clients in context of their family dynamics.

The lever to counteracting negative traits is, you guessed it: interests and passions. If a daughter is crazy about soccer and too much of a spender, she’s more likely to save money to buy tickets to a soccer game or donate to a soccer-related nonprofit. Interests change over time, and that’s OK. It’s not the specific interests that are important but having and developing positive interests. These can then offset negative money personality traits and motivate young adults to work hard doing something they love.

Another thing is that children learn by observing. If I see that a parent’s behavior is consistently contradicting what they’re trying to convey to their children, I think it’s my duty to point that out. These can be difficult conversations. But our clients know we have their best interests at heart. They want us to give them objective, timely advice based on many decades working with different generations within families. Then they can decide for themselves.

Linking Money to Motivation

Once we understand the different interests and money personalities within a family, we can then work on interactions with money. Sometimes, a client will put aside a certain amount for each of the children to control (older teens or young adults), and I will work directly with each of them. As the family wealth advisor, I then get to build relationships with the younger generations, helping them gain knowledge and confidence about investing and the risk/reward tradeoffs of different asset classes.

For clients with younger children, I try to provide structure — conversation starters and/or age-appropriate activities — to get the kids engaged and making choices. There are at least two main goals here: (1) Getting kids to make their own choices about how much to spend, save and give away; one way to do this is by setting up an allowance. (2) Distinguishing between what is a need and what is a want. If a five-year-old puts two things in the shopping cart, ask him to choose just one and help him make that decision. Is it a want or a need? Why this one over that one? Developing this type of critical thinking early will serve him well.

As a family wealth advisor, my role is to start conversations about things that matter most, not just with my clients but with their children. And to then link those conversations to financial decisions. To do this, I find that it’s a real advantage to be an objective, trusted outsider who knows everyone in the family well. It also helps that LNWM itself is part of a family legacy; our firm was founded by the Laird Norton family, whose success as business owners and investors now spans seven generations. And we have been working with the different generations in client families for more than 50 years. There is a lot of institutional knowledge here about how to raise children who can make great decisions for themselves and their future families.