Families: talk to your kids about money.

Research shows that parents typically don't talk to their children about money or their wealth.

Why not?

We try and instil our values into our children in general, but we find some subjects almost taboo. You guessed it - sex and money are the toughies.

The notorious Du Pont family has a fortune that dates back over 200 years and the roughly 3,500 family members share in an estimated US$14.3 billion today.

Apparently there is a history of some Du Pont family members bringing their young children into family discussions about wealth and privilege early on including introducing expectations around making their own way in the world. Families that inherit wealth may continue to be wealthy because of the family conversations they have. It is what they have done for ages.

Amongst some of our clients there is the belief that knowledge of family wealth will only sap the energy of children growing up where the expectation could easily be that 'I won't have to work as I will inherit all I need'.

My father died last year at 101 and I have often lamented his lack of interest in talking about money. He was successful in his own right and he inherited significant wealth, but he assumed that his children would learn the right money lessons by osmosis. Our mother would talk about money and wealth, but money wasn't her strong suit. Talking was. The one with all the knowledge about money and wealth wouldn't say boo.

In the absence of family discussions about money and family wealth our young ones will make it up anyway. Our 11-year old came home from school the other day with the news that her friends were calling her 'a millionaire'. They had looked up our new car on the internet as well as our house and the word got around, Frances was a millionaire. Hilarious. But it sure made for an interesting dinner discussion, age appropriate of course, about our wealth versus the estimated wealth of each one of her friends. Why one family has more overseas trips than another.

We feel it is important for Frances to know the facts, that she is privileged and has grown up with a lot more money and opportunity than her three adult half-brothers. This is simply due to her parents being older and more established financially than the young couple on one income bring up three boys under four in Auckland 40 years ago.

The 'Who's a millionaire' discussion developed into a story about her having two parents with tertiary qualifications providing a good base to build an income upon and we have explained how fortunate we have been to have had family support to achieve that. Many didn't have that support. Still, her educational base is not nearly as grand as one of her besties who has two University Professors for parents!

Frances tells us she is going to Oxford University after two days spent there visiting as a 6-year old with her Aunt and Uncle. We remind her of her dream every time she drags her feet over homework.

There is always someone worse off than us and there is always someone better off than us. We try and demonstrate both sides of life for Frances and let her know that she will have lots of choices to make as she grows up, some around money but especially who her friends are.

There are some great money discussion opportunities underlying the conversations we have with our 11-year old, whether it be about the tax we pay every fortnight to fund schools, hospitals, police, courts, Superannuation, welfare or the rates we pay for roads, bridges, libraries and footpaths we use. Not too heavy, of course, age appropriate, and trying always to come back to the more important values of kindness and effort.

Frances has the password to both her parent's online bank apps as two of the 10 accounts are her own. She can see how much money comes into the family, how much is saved and how much goes out to pay for our lifestyle, although most of that is still beyond her at the moment. We will make sure as she grows up that discussions around money and overall wealth will feature in proportion to the underlying importance money and wealth make to our lives.

Whether it be a discussion about getting the things we want straight away, to how long we wait to save up for them, these are important conversations and value judgements to share with our children as if we don't have these important talks they will just make it up, with help from their friends, and the internet.

Don't leave it till they are 25 to have that first honest conversation about money and wealth, when they come to you asking for a loan to buy a car or travel overseas. If you do that you are leaving it up to chance.

The psychologists tell us that not talking to our children about our money values is most likely to be more about fear and loss of control than worry about derailing our kids.

Better to work on facts rather than fiction, acknowledging our failures as well as our successes, when it comes to money and wealth and admit that money values, often passed down through the generations, are important values to develop in our children.

Keep asking great questions ...