Spring 2008 issue of Horizons

For YOUR money

knowledge. commitment. value. CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

responsible to invest the money. Although the parents can guide them and oversee the investment, the children must work together. If the investment does well, maybe the family takes a better vacation. If the investment tanks, maybe the family only goes camping. Other families have had their children run garage sales to teach them how to work together and handle money. It could be interesting to see how children divide up tasks to get the work done. Who will set the prices? Who will get the word out that the garage sale will take place? Who will deal with the customers? How will the profits from the garage sale be split? People with family businesses may want their children to work in the business part-time to gain real world experiences. The point of these exercises is to teach children to work together and make intelligent decisions about money. Simply talking about teamwork and money management may not be enough for children. Tying educational moments to an actual event provides a better chance to have the lesson really sink in. When children reach an appropriate age, it also is important to teach them how the capital markets and investments work and how financial decisions can be made. Providing children with this financial foundation can help them learn to manage money and ensure financial stability when they get older. Your financial advisor can be helpful in this area. The teamwork concept helps strengthen families and prevents hurt feelings. Such lessons are useful for families regardless of their financial status. Any teaching that goes on for several years gives a message to children that it takes time to build a financial base. It also can be useful to teach children your values. Otherwise, the children may adopt the culture of their peers, which might be about undue consumption and spending beyond a person’s means.

Teaching Teamwork

and Financial Management to Children It is not uncommon to see families bicker over finances. One cause of this problem is that some families are completely unprepared to handle money. For children, it is quite possible that the first time they have to make significant wealth decisions together occurs when one or both of their parents die and they are settling their estate. This event is not a good time for siblings to learn about making group financial decisions. Some parents have started to teach their children about teamwork and money management at an early age. For example, a parent can entrust his/her children with a set sum of money (let’s say $5,000) each year. The children (let’s assume they are ages 13 and 15) will be primarily

Questions? Contact:

Mike Ferman, CPA Partner RubinBrown Advisors 314.290.3211 mike.ferman@rubinbrown.com

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