If your family is anything like mine, you’ll spend Thanksgiving watching football, eating too much, strategizing Black Friday attacks and generally skirting any conversation that risks spoiling the holiday mood among extended family. Your finances are probably one of those topics. While managing our money is a top concern for many of us, studies have shown that it’s a discussion families are often reluctant to have.
It’s time to change that. In my last Blog post, I talked about what the Millennial generation can teach Boomers about retirement. The holidays are a great opportunity to have inter-generational, in-person conversations about investing. The payoff can be big. The latest Global Investor Pulse Survey revealed that those who are more engaged in their finances feel more comfortable and confident about their financial futures. In fact, the study finds that highly effective investors spend triple the amount of time reviewing and monitoring their savings and investments that those who feel less secure.
Your challenge, should you choose to accept it: start a new holiday tradition of making investing a fun, or at least non-threatening, part of the conversation. Soften the ground by going around the table and asking each person to name one thing they know about saving and investing – and one thing they’d like to do better. Then, you can follow up, using this family conversation checklist:
- Check in with your parents. How are they handling the recent market volatility? Do they feel well prepared to pay for their retirement? Do they feel like they have the income stream they need, now and in the future?
- Revisit your financial plan with your spouse. Do we have ongoing, open money and investing conversations? Are we prepared for year end from a rebalancing perspective? Are we balancing our financial priorities correctly?
- Talk about money with your kids. As the mother of two young daughters, I teach them about the value of saving their allowance as well as the importance of giving to charity. Have these conversations early and often. For those with kids on their way to college, be sure to talk to them about good money habits. If you have grown up kids, ask them if they’re maxxing out their 401(k) contributions.
Another idea to plant for your kids’ holiday wish list: a contribution to a 529 plan. The gift of education – and a smaller student loan balance – is the gift that keeps on giving.
What are your family traditions during the holidays? Are you as a family comfortable talking about money and investing? Share your stories here. And have a safe and happy Thanksgiving.
Heather Pelant is Personal Investor Strategist for BlackRock. She is a regular contributor to The Blog and you can find more of her posts here.