Moneywise: Financial literacy important in preserving family wealth

Moneywise: Financial literacy important in preserving family wealth

By

Talbot Boggs

(Special) – One of the best ways to maintain your family’s wealth is to get everyone within the family involved and working with a common vision. Attaining this goal, however, often is hampered by the fact that family members may have differing levels of financial knowledge and experience.

“Over the last 30 years I have seen first-hand how, in many families, one person is more financially literate than the other members, which tends to put power over the family’s finances in the hands of that one individual,” says Chris Clarke, CEO and co-owner of First Affiliated Holdings. “This creates a situation of dependency on the part of the other family members which can actually end up depleting the wealth of the family. That’s one reason why teaching children about money is so important.”

Some recent studies and reports have found that Canada lags many other nations in teaching students the basics of finances and youth in Canada need more and better financial education and training to help them meet the economic challenges they almost certainly will face in their lives.

The result is that many Canadians are living with dangerously high levels of debt. Many are struggling just to meet their bills and aren’t saving enough to pay down debt and save for their retirement.

Financial experts find this trend toward higher spending and more debt concerning because it signals Canadians are becoming too comfortable with low interest rates. Low interest rates have been a financial reality for some time. They are the new normal and could lure people into a false sense of security and result in more spending and higher debt.

Another frightening reality is that more and more seniors are taking debt into their retirement and some even are being forced to declare bankruptcy.

Clarke, author of the book, “True Family Wealth: Love, Money and an Inspired Life,” believes parents have a duty to give their children the gift of financial literacy.

“Give them the understanding of knowing how money is made and saved as well as the skills and ability to use financial resources to make decisions, including how to generate, invest, spend and save money,” Clarke says. ‘Have healthy conversations about money and values that includes teaching children the true value of wealth, which is so much more than just money – it’s helping them find a clear direction in life and to discover their purpose.”

The issue of financial literacy is a growing concern in Canada. The Financial Consumer Agency of Canada (FCAC) has designated November national literacy month to raise the public’s awareness about the need for financial literacy and has created a financial literary database, a self-assessment tool to help Canadians identify shortcomings in their financial knowledge.

Several provinces in Canada including Ontario and Alberta now are piloting financial education programs in their school curricula.

In Ontario, for example, financial literacy is integrated with many different subjects such as mathematics, social studies, Canadian and world studies, business and others from grades 4 to 12.

In some subjects students may be learning specific skills such as understanding money, personal finances, budgeting and money management that will help them develop financial literacy skills.

In other subjects financial literacy connections may be made as students learn about their place in the world as responsible and compassionate citizens or when they study different economy systems.

Throughout the curriculum, students develop skills in critical thinking, decision-making and problem solving that can be applied to subjects at school and to real life situations.

“True family wealth is about putting the power to create and preserve wealth back into the loving hands of family,” Clarke writes. “Money is a wonderful blessing to be shared. True wealth is not just measured by the size of your financial portfolio: it’s measured by your feeling of fulfilment and joy and the quality of love and personal freedom in life. You need to believe that a family united is stronger than the separate self.”

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

Copyright 2018 Talbot Boggs

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