In a previous post we discussed the isolation, guilt and identity crises that often accompany sudden wealth. Dealing with these issues requires temperance and a commitment to learning new financial skills and navigating an unfamiliar social space. Whatever you are going through, know this: the effects of sudden wealth can be even more profound for your children.
Like you, they may find themselves caught between their old world and the new, and fitting into neither. For example, they may be excited about their fortuitous change in circumstances but unable to share this with their old peer group for fear of seeming like a braggart. At the same time, they may feel like a fish out of water in their new environment, with its different culture, language and rules. Here are some ways in which you can help ease the transition for them.
Do not make big purchases for them (right away). If you’ve struggled in the past, the (understandable) impulse will be to give your kids everything their hearts desire. Moreover, those desires may change quite a bit if they are now around wealthy peers. Just as you need to gradually grow into your new identity, so should they. Let them know that just because you have the money for something doesn’t necessarily mean they should have it. Teach them to really think about what’s important to them and make the attainment of those things contingent upon school performance and, if they are old enough, getting a job. Refusing to give them a free ride will help them build a sense of self, independent of their bank account.
Keep their daily routine as “normal” as possible. This will be relative to your situation. For example, if your kids were already attending excellent public schools it may be prudent to keep them there, especially if they are thriving socially. If you move to another area or decide to put them in private school, make arrangements for them to see their old friends through sports or other extracurricular activities. This will give them a sense of stability and allow them to see their wealth as a blessing, rather than something that’s robbing them of the people they love.
Be there for them. This is the most important piece of advice. If your sudden wealth is tied to your business concerns, you may find yourself busier than ever. While you cannot neglect your professional obligations, it is imperative that you carve out time to spend with your kids, especially around activities you previously enjoyed together. Let them know that they are still your number one priority, not your newfound wealth.
Educate them. All children should learn to make healthy financial decisions; however, many families, regardless of net worth, don’t have these conversations until it’s too late. See this transition as an opportunity to teach your kids about the value of money. Again, if they are young this may be as simple as saying no to the latest toy or trinket. If they are teenagers, explain the change in your financial picture and the decisions you are making to maintain it, as well as your vision around creating a legacy. One way to do this is to use digital tools such as all-in-one solutions that allow you to share information in a secure space. Encourage them to “log on” and become familiar with your holdings, i.e. physical assets and what it takes to maintain them. Given kids’ facility with technology, don’t be surprised if you become the student as well as the teacher!
Ask for help. There is no reason for you to reinvent the wheel. Seek out mentors who have successfully navigated the challenges of sudden wealth, especially with regard to raising their children. It may also be helpful to engage a therapist for your child, as long as you vet potential candidates carefully. There is a tendency, even among mental health professionals, to downplay the problems of the wealthy, so make sure you engage someone with the experience and empathy to validate your child’s feelings.
Sudden wealth is like any other major life change, and some people deal with it better than others. How you come into the wealth may also be a factor; for example, if you have spent years building your business, setting goals, and envisioning what your life will be like once you’ve “made it,” you will likely be better prepared than if you bought the winning Powerball ticket. Either way, you cannot assume that your children are adjusting as easily as you. Children may also be unaware of their own feelings, so it is incumbent upon you as the parent to pay attention to the subtle (and not so subtle) clues in their behavior and figure out how to give them what they need. You’ll likely find that the answer is the same as before the money came into your life: what they need most is the structure and unconditional love that only you can provide.