A closer look

Empower Children to Lead Financially Healthy Lives

Mon kneel over her son inside the building by the window
In brief
  • We’ve found that families benefit greatly if parents make a concerted effort to help their children learn how to steward wealth.
  • As unique as each family is, parents with wealth face some common challenges when teaching their children to be fully engaged and responsible for their financial well-being and the family’s goals.
  • There are time-tested strategies to help the next generation embrace their financial adulthood and contribute to a family’s legacy. This article offers a brief overview of these approaches. Your Bessemer team is available to help you decide which strategies might suit your family.


Many wealthy parents worry far more about how financial privilege might affect their children than how external forces (markets, taxes, and the like) might affect their fortunes.

They fervently hope current and future generations will develop healthy relationships to wealth and values aligned to their family’s goals. But they are keenly aware of the obstacles their children will face.

Our longstanding experience has taught us that the obstacles can be overcome. Parents can foster a culture of stewardship so that their children are energized by a shared value system and animate it with their actions, both large and small.

Here, we share our insights into what families can do to help their rising generations thrive — and offer a glimpse of how Bessemer might help.

Many Families Face These Challenges

In our work, we see many families wrestle with challenges created by these four common realities:

1. Parents often have differing relationships with money.

Children establish a baseline for their beliefs and attitudes about money by observing how their parents earn and spend, what they value, and how they make financial decisions. They see when money sparks joy and conflict in the home.

By the time adults have their own children, they already have a robust history with financial matters that informs their “default settings” as parents. Partners’ deeply held attitudes are rarely the same, even when they are compatible.

Unfortunately, seemingly small differences can snowball over time, becoming a source of tension for parents and mixed messaging to their children.

Scenario: It’s the Little Things

Amy grew up in a family that was able to support all her financial needs. Unfortunately, the family’s wealth was a source of longstanding conflict between her parents. Her mother often advised her to “make your own money so you never depend on others.”

Now in her late 50s, Amy is an accomplished lawyer married to Andre, a successful commercial real estate developer. They share a vision: that their daughter Lara should have a strong work ethic and agency over her finances. Empowering Lara is particularly important to Andre as a first-generation American, whose family watched every penny. He worries giving Lara too much will make her entitled and ineffective.

One day, Andre returned home expecting to find his college-age daughter studying for finals. Instead, he saw his wife and daughter chatting next to takeout lunches from an upscale restaurant. He was furious and admonished his daughter, saying: “I don’t know that your earning power will ever match your lifestyle habits if you don’t pass your macro exam.” He also took his wife to task for the “five-star luncheon.”

Amy seethed. Lara rolled her eyes and yelled at her parents: “Stop fighting. I’m going upstairs to study now!”

2. Parents are frequently unprepared to discuss money.

Parents to millennials and Gen Z grew up in an era when financial matters were considered private and open family discussions about money were infrequent.

Times have changed. As soon as children can browse the internet, they have access to a tremendous amount of financial information: home prices, school tuition fees, salary ranges. Bottom line: parents no longer have complete control over what their children learn about the family’s finances.

Children also may develop faulty assumptions based on income and spending, which are easier to observe but not always reflective of the family’s wealth.

Scenario: Appearances and the Internet Can Mislead

Jill is raising her two boys outside of Silicon Valley. She drives them every morning to a prestigious private school 15 miles away from her modest home. On the ride back from school one day, her first grader asked, “Are we poor?”

Without thinking, Jill exclaimed, “Of course not!” Her husband Eric is working his way up in the family business. His compensation is modest, but he owns a stake in the company, and it continues to grow. Jill and Eric live on their salaries and support the broader family’s decision to reinvest profits in the business rather than take dividends. They use a family trust to pay the kids’ school fees but otherwise live modestly.

After Jill’s outburst, she heard her fourth grader retort: “Dude, not everyone can be a billionaire like Ellie Court. Did you know her house cost like $4 million? Mom, can I have your phone? I’ll show you!”

3. Wealth can erase some teaching opportunities.

When a family’s finances are tight, parents regularly navigate financial trade-offs, giving them ample opportunities to teach their children about budgeting and family priorities.

As families with substantial wealth lack those constraints, they must manufacture opportunities for their children to make tough decisions. The exercise for a child from a wealthy family is typically more abstract: not, “Can we afford that new dress for the dance?” but rather, “Should we buy it?” and “Why?

Scenario: Explaining the Need for Limits Can Be Difficult

Sarah is deflated after a tense back-to-school shopping trip with her daughter, Ashley.

Ashley is entering her sophomore year at college and is preoccupied with fashion. She keeps spending more and more on cosmetics, clothes, and trips to the salon.

Sarah and her husband, Bob, have noted that this uptick in credit card charges has coincided with Ashley’s learning about the extent of the family’s wealth. On a recent shopping trip, after Sarah told her daughter to put some of the clothing items she wanted back on the rack, Ashley muttered, “It’s not like we can’t afford it.”

Sarah called her husband and asked, “How can I explain to Ash why she should purchase only one sweater when she knows that we can buy the whole store?”

4. Young people can feel uncomfortable about their wealth.

Secrecy and shame plague many affluent young people as they reconcile their wealth with other aspects of their identity.

Americans under age 30 show that 44% of respondents feel “angry” after reading or hearing about rich people.1 Moreover, wealth inheritors can be subject to special ire in the court of public opinion, where they’re often stereotyped as spoiled, lazy, and undeserving.

Scenario: Owning One’s Position in the World Can Be Daunting

Sarah is a sophomore in college studying anthropology at a small liberal arts school in the Northeast. She is interested in journalism and inspired to share the personal stories of communities that are too often overlooked. She believes in fairness and has found meaning and purpose in volunteerism, civic advocacy, and organizing.

Engaging in these activities gives her a way to meet new friends on campus. Over winter break, Sarah has the opportunity to participate in a family philanthropy retreat with near and distant cousins.

Sarah is ambivalent about attending. On one hand, she’s eager to go, as she expects to learn and engage in deploying financial resources to nonprofits that are making positive change in the world. On the other hand, she’s embarrassed about her connection to the well-resourced foundation.

When friends ask her what she’s doing over the break, she mentions a family get-together but avoids any mention of her philanthropic pursuits.

There Are Proven Ways to Handle These Challenges

From our experience with families and the evidence gleaned from practitioners and academics, we offer four strategies families might consider employing.

1. Clarify, share, and consciously model the values and behaviors you want future generations to embrace.

We see families benefit when couples clarify the values and the money messages they wish to share with their children. Even the most compatible partners can find it challenging to initiate and navigate these discussions with each other. Bessemer can help by tailoring conversation prompts, questions to spark reflection, and other tools.

Once a shared vision is articulated, couples can more proactively build a family culture aligned to their values. Couples with whom we work report that initial conversations on these topics can open important channels of communication. They are better equipped to hold each another accountable for modeling family values with their actions and they can be more empathetic with one another when things don’t go according to plan.

Scenario: A Couple Shapes a Vision for Their New Family

Rebecca and Steven recently married and, approaching their mid-thirties, hope to start a family soon. They’ve always agreed about finances and share a common vision for the lifestyle they want.

Rebecca comes from a very large family that lives modestly, despite having significant wealth. Steven is an only child from a small family. His parents have less but enjoy entertaining and travel, choosing to spend their hard-earned money on life experiences.

The couple had complied with a request from Rebecca’s family to execute a prenuptial agreement. However, the process was uncomfortable and she’s concerned now about how she and her new husband will handle money issues with their children. After a call with Rebecca, Bessemer advisors craft some questions and “what if” scenarios for the couple to talk through.

The pair discusses the values they want to anchor their household and imagine some sticky scenarios they might confront. The conversations go well.

The Bessemer advisors also help the couple reflect on how they will share their vision with their parents, who will have an ongoing role in their lives.

2. Create and implement a plan for educating your next generation.

Young people are able to step into family leadership with enthusiasm and make decisions in keeping with their family’s values when they are financially literate and confident about working with the family’s advisors.

To achieve such competency, children must be engaged and given opportunities that match their learning style and developmental stage. We can offer some general guidelines about what lessons to deliver and when (see “Teaching Your Children: Tips for Every Age” below). However, these lessons likely should be shaped to suit each child’s learning style and interests.

Teaching Your Children: Tips for Every Age

Age  Skills
  • Teach kids how to count, handle money
  • Help kids prioritize spending choices
  • Read books and play games that reinforce good money skills
  • Offer an allowance
  • Explore wants vs. needs
  • Build kids’ money vocabulary and understanding of basic budgeting
  • Open parent-controlled checking account and mobile apps
  • Encourage entrepreneurial activities and nonprofit volunteerism
  • Introduce teens to core investing concepts, financial knowledge & skills
  • Help contextualize the family’s financial position
  • Empower teens with a budget to make small charitable donations
  • Transfer management of monthly expenses
  • Introduce credit and monitor responsible borrowing
  • Set up a Roth IRA and discuss long-term investing
  • Begin preparing young people for roles as trust beneficiaries
  • Formalize family meetings
  • Introduce family wealth structures, purposes, and assets
  • Invite participation in key communications and decision-making

Scenario: Staying in Tune with a Child’s Interests

Wes and his twin Lilly couldn’t be more different. Wes is low key and finds contentment hiking and camping with his closest friends. Lilly gravitates to big social events and thrives in competitive environments.

They are several years away from gaining access to their trusts — a first step in the transfer of the family’s sizable fortune.

Their parents have concerns. Wes, they fear, will take too much of a hands-off approach; he’s uncomfortable with the family’s wealth. Lilly, they fear, could be influenced by peers to live lavishly, or make risky investments based on friends’ recommendations.

A Bessemer team works with the parents to customize a plan for each child.

For Wes, the team sets up a donor-advised fund (DAF) with a small charitable donation from his parents. The team meets with Wes to describe how the fund works, using the opportunity to highlight charitable organizations Wes can consider helping to preserve the national parks he loves so dearly. While teaching him about how the assets in the DAF might grow, they also educate him more generally about investments, asset allocation, compounding, and sustainable investing.

For Lilly, they set up a practice investment portfolio, challenging her to manage the risk of that portfolio. After Lilly’s acumen increases, they set aside a separate account for Lilly to oversee.

Along the way, both children become more familiar with the Bessemer team and comfortable engaging them with questions.

3. Communicate clearly and consistently; over time, increasingly share more about the family’s wealth picture.

Starting conversations about the family’s resources is important when children are young, especially in a world where parents have less control over what their children might learn and when.

We recommend you begin by talking about family values around the dinner table; progress by regularly holding family meetings to discuss matters of significance — particularly those associated with financial planning and decision-making. Many families handle these conversations independently. In more complex cases, families can benefit from having a professional advisor design and facilitate these meetings. Regardless, parents should always calibrate the pace of their communications to their children’s financial acumen.

Scenario: Together, a Family Creates Clarity

Nadine and Connor are confident about their efforts to empower their four children as stewards of family wealth. They have a clear set of family values that guide their wealth management decisions.

All their children can identify the family’s values and describe milestone decisions made by their parents and grandparents that brought these values to life. Some of their children are more knowledgeable about investing than others, but all understand core concepts.

Through a series of family meetings — designed and facilitated by their family lawyer and Bessemer Trust advisor — the parents and children have created a mission statement, developed a basic governance structure, practiced communication skills, and discussed family finances and planning.

The four children do not always agree with the specifics of the family plan, but they all accept it. Their eldest, recently named co-trustee of one of her trusts, said, “I know what to expect, what not to expect, and what is expected of me. That gives me comfort.”

4. Create opportunities for your next gen to learn, expand their worldviews, and explore their identities.

It is important to create opportunities for children to learn the same lesson from a number of teachers in a variety of contexts. The messenger matters.

Peers and non-family mentors become especially important in young adulthood when, developmentally, it is healthy for young people to search outside the family unit for learning and identity-building opportunities.

A lesson on the power of compounding might grab a child’s attention more effectively when it is delivered by a family advisor than by a parent. And the joy of giving might be better learned by volunteering at a soup kitchen than listening to anecdotes about the family’s philanthropic pursuits.

Over time, it is important for parents to provide their children with greater exposure to more voices and opportunities.

Scenario: Learning from Peers Helps

Jordan grew up with strong family values of honesty, humility, faith, and hard work. Now in his early twenties, he has a community of friends and a nonprofit job that he loves. He’s begun to date someone he truly cares about but hasn’t yet shared the extent of his wealth with his partner. In fact, none of Jordan’s friends know how wealthy his family is.

Jordan’s family has been encouraging him to be more open with those closest to him. They coach him on how to communicate honestly, with discretion. When Jordan received an invitation to a Bessemer Next Gen event, his parents encouraged him to go, and he did.

At the event, Jordan heard from people his age who’d navigated challenging conversations about wealth with loved ones. He also attended a workshop on how to approach “difficult conversations.”

Leaving the event, Jordan said: “Today was the first time I really talked about this stuff. I didn’t want to come, but I’m glad I did.”

A Quick Guide to How Bessemer Can Help

Our firm can support you and your family as you empower children to become effective stewards of wealth and lead financially healthy lives. Please connect with your client advisor to learn more about how to:

  1. Model values and behaviors by …
    1. Exploring values and money messages
    2. Drafting family mission statements
  2. Teach your next gen about finances by …
    1. Creating a plan and using resources that can support your efforts at home
    2. Finding age-appropriate educational resources such as apps, games, videos, and programs
  3. Communicate clearly and consistently by …
    1. Creating a letter of wishes
    2. Initiating effective conversations about family wealth and legacy
  4. Help your children learn from others and through experience by …
    1. Attending Bessemer’s Next Gen workshops and other peer learning events
    2. Launching your own next gen philanthropy program

We Have Seen It Done — and Done Well

The story of Bessemer’s family, now in its seventh generation as stewards of wealth, highlights what is possible for families who are committed to empowering their children and creating a lasting legacy.

At Bessemer, we have had the privilege of helping many families achieve their multigenerational success stories. We look forward to helping you shape yours.

  1. Emily Ekins, “What Americans Think about Poverty, Wealth, and Work,” 2019 Welfare, Work, and Wealth National Survey, Cato Institute, September 24, 2019.

This material is for your general information. It does not take into account the particular investment objectives, financial situation, or needs of individual clients. This material is based upon information obtained from various sources that Bessemer Trust believes to be reliable, but Bessemer makes no representation or warranty with respect to the accuracy or completeness of such information. The views expressed herein do not constitute legal or tax advice; are current only as of the date indicated; and are subject to change without notice. Forecasts may not be realized due to a variety of factors, including changes in economic growth, corporate profitability, geopolitical conditions, and inflation. Bessemer Trust or its clients may have investments in the securities discussed herein, and this material does not constitute an investment recommendation by Bessemer Trust or an offering of such securities, and our view of these holdings may change at any time based on stock price movements, new research conclusions, or changes in risk preference.

Alyson Wise

Alyson Wise

Family and Philanthropy Advisor

Alyson is responsible for consulting with clients to design and implement philanthropic giving strategies, next gen education programming, and multigenerational family governance systems.