Money can be a taboo subject, even among families. But talking openly about money, financial goals and aspirations can help different generations make better decisions. Making talking about money part of your normal family routine beyond the awareness week can have far-reaching benefits.
When you created your financial plan, you may have involved a partner but most people don’t include their wider family. Yet, for many reasons, making financial planning as a family can make sense.
1. Your goals may include your family and legacy
For many people, goals involve family in some way.
You may want to help pay for your grandchildren’s school fees now, or ensure you leave an inheritance that financially secures their future. With this in mind, involving loved ones in the financial planning process can make sense. Openly discussing what you intend to leave as a legacy, for instance, can help all of the family to plan more effectively.
Firstly, take some time to think about your personal goals. This can help you create a list of priorities when talking about a financial plan. You may intend to offer monetary support, but securing your own future is just as important.
2. Find out what their goals are
Do you know what your family hopes to achieve or what their concerns are?
You may have an idea about the aspirations and worries of loved ones, but sometimes you need a frank discussion to really understand each other. You may find there are more effective ways you can lend support if that’s your goal.
Many younger generations, for instance, are struggling to purchase a property or manage day-to-day finances due to stagnating wage growth. If you had planned to leave an inheritance, passing on wealth now may be more effective. A house deposit or a lump sum to pay off a mortgage could help reduce the outgoings of children or grandchildren. It’s a step that can improve their financial security and wellbeing both now and in the long term.
It’s also an opportunity to discuss your concerns with them. For example, are you worried about the cost and support you’d receive if you needed care? Having a chat with family can help you create a solution and put your mind at ease. It may be something they’ve already thought about. By involving loved ones in a financial planning discussion about care. you can create a plan that suits all of you.
3. Reduce costs
Working together can help reduce costs and get the most out of your money.
Understanding the potential impact of Inheritance Tax is just one way you can make your money go further. If your estate could be liable for Inheritance Tax, there are things you can do now to reduce or eliminate the cost but this requires a proactive approach. Strategies to mitigate Inheritance Tax include giving away some of your wealth during your lifetime and setting up a trust for family. If you’re worried about Inheritance Tax, please contact us.
There are ways you could save money now by pooling resources too. Take investing for example, if several family members are paying for investment fees and advice, bringing this together can save money and lead to better returns.
Personal goals and challenges must be considered in these scenarios, as well as understanding who has ownership of assets. Please contact us if this is something you’d like to discuss.
Making family financial planning suit you
If you want to involve family in your financial plan, there are numerous ways you can do so. You should think about what you want to achieve and how involved you’d like your family to be.
On one hand, making time to have a simple conversation about money and long-term goals may be enough. This can help you see how goals may align and where you may want to offer support. On the other hand, you can work together with a financial planner as a family if you’d like to create a more comprehensive plan that includes several adults and generations.
Striking the right balance is important when involving family members in your financial plans. If you’d like to discuss how you could consider wider family goals, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate tax or estate planning.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.