Family
Family is where it all begins for us as people. Family could be your biological parents, extended family or some other arrangement. For the purposes of understanding The Future Poor, Family is a general term referring to key adult social influences that were the primary agents in raising us as children. Families are as varied and unique as can be and can often feature siblings having very different experiences within the same household. They span the social-economic landscape, cultural distinctions, can be geographically distinct, and so many more defining characteristics. One thing that is true of them all is that they have profound influence upon us given the relational and behavioral patterns each of them have.
We adopt and carry forward many of relational and behavioral patterns we have been modeled - some more than we care to admit!
“What are some of your earliest memories about money?”
“What did your family teach you about money?”
“What did you learn about money from your family?”
Matters of money may be one of the most significant things we learned about growing up without even knowing it. Observing spending patterns taught us what things were important or how to spend money. Tense financial conversations taught us that money’s role was both the source of and solution to a multitude of anxieties.
The sub-50/sub-150 tend to have a similar refrain about money matters in their family - there was not much positive conversation and training happening. This is one of the most significant ways that the Family has backed away from individuals.
There was no manual for the new world and the new economy that came with it. That created a knowledge gap for the sub-50 that I believe is representative of much of why the sub-50 feels like they didn’t get much financial education. In some cases, there was not the knowledge nor the access to information that exists. It was the first ‘individualistic’ generation where they were on their own in many ways.
What appears to be happening is that the previous generation is unaware of the severity of the storm and drowning that the sub-50 is in and that it is not entirely of their own doing. There is also a sense that they do not know that what they possess is a life jacket or greater! The sub-50, also seems to be unaware of a way to communicate exactly the level of storm we are in. This allows several unhelpful narratives to persist within family systems. Narratives like, “We did not get help,” “You got yourself into this situation,” “Do what we did” or they just continue to never talk about money.
Poor generational patterns and poor generational planning like this only lead to the continuing of poor generational patterns and the inability to start doing better generational planning. Ultimately, poor generational planning only leads to being locked on the road of being the future poor. Being the future poor sets the stage for the next generation of sub-50/sub-150 to being on the same road and becoming the next generation of the future poor. Here, the question becomes, “How can we get off of this cycle and leverage the family’s influential role in training and resourcing a new financial future?”
As with most things, the solution is found in the problem. As you were reading, you may have picked up where the rest of this chapter may be heading. If the family has moved away from individuals by not talking about money, not learning about money and not using their money for generational purposes, then they need to start doing those things to right the course.
Simple!
However, this is easier said than done because it requires humility and sacrifice.
First, money acts as another member of the family and we have the opportunity, no matter how little or how much you have, to have it be a positive member of the system and contribute to well-being rather than be a source of anxiety.
To ignore this or to not talk about money is to choose to have money be a negative partner. Talking about money is better than not talking about it but the way we talk about it is of incredible importance. You can bring money in as a partner and continue to have it be a negative one continuing to contribute to strife and anxiety. Or, reframing money as a positive partner in the system can open up a changing relationship to money in general.
Talking more about money is the very first and quite possibly the most important thing a family can do for their children. But it simply isn’t talking about money more that makes the difference. Even when scarcity is the reality, money must be seen as a positive contributor to the family system. It does make the world go round in a very real sense.
Discuss with your children some of the economic things that you are doing as you encounter them. Here is a list of some starter things you can begin to walk them through as you go. Plus, you may be surprised at how much you actually know!
When buying groceries, discuss the budget you have set aside for food.
If you write a check (a rarity in our day) walk them through how to do it, where the check goes and how the money gets taken from your account.
Buying a car is a good time to discuss what a loan is. How interest rates work.
When you get your paycheck, walk through how taxes are taken out and money is saved in your 401(k)
Bills, like electricity, water and phone bills, are great opportunities to explain how money works and is used for the different things in life that are good and necessary.
Kids are quite adept and understand way more about these things than we often give them credit for. The hope in talking more about money is that generations will have a head start and an economic mindset that they will carry with them into adulthood. Many children are shocked when they become adults and are face to face with the economic reality of our world. The earlier they are face to face with it, the better so that it won't be as threatening and foreign.
The second step in the process is to meet with a professional and know more technical financial things. The sub-50/sub-150 need to become more financially literate for the sake of themselves and the next generation. Like a family physician is there to look after the medical well-being of the family, a financial professional is a necessity. Current statistics note that less than 25% of people ever meet with a financial professional of any kind - even a life insurance agent or free resource at your bank branch. There are free professionals everywhere that are good people and want to help.
It is my belief that everyone and every family should have one to help guide them in the technical aspects of financial matters. For many, this may require the most humility and sacrifice to have your family financial life opened up to someone but I assure you, advisors are not out there with the intent to make you feel bad or worse than you already do. If you had any of the following reasons come through your head, "I don't make enough." or "I am not rich." or "I don't have anything to save." as reasons to not meet with a professional use those as the very reason you should!
Lastly, the most significant contribution a family can make in fixing the current situation is through actual financial resources. This far and away requires the most humility and the greatest sacrifice. Parents are generally the income earners in the family system until children are of age to have a job. Most of us probably began our working years in our late teens or early 20’s without much money in our pockets of a tiny bit of savings. Few people enter adulthood with any sort of financial foundation to build upon aside from starting where most start with $0 or worse.
$50/month in a conservative investment that actually makes 4-5% annual growth can give a person a $20,000 financial foundation. If they continue to save $50/month as an adult they could have a side fund of over $70,000 when they are 40. Name me a 40 year old that would not like to have a side fund with $70,000 in it. All for $50/month. Can you do that for your child or member of your family?
My general call is to be concerned about the financial well-being and financial future of us all. Starting with your immediate circle of family and close friends and extending outward. The more that we can talk about money, eliminate the stigmas around discussing finances, or recommending a professional that you work with - the better we will be.
I have heard and have said it myself, that the greatest compliment an advisor, agent or financial professional can get is that you refer us to a friend.