With all the shopping, decorating, cooking, cleaning, gift-wrapping and celebrating – and maybe even the odd hangover or two – the Christmas holidays might not seem like the ideal time to spark a serious conversation with your immediate family. Let’s be honest, many of us just want to get through the day! In reality though, it’s a time when you are likely to have all the family together and so getting everyone to open up can actually be a bit easier than during other times in the year. Particularly if you’re nearing retirement age and have children who are becoming more independent, and perhaps even have families of their own, the festive period might be your best shot at getting everyone in the same room together to sit down and plan for the year ahead.
It doesn’t need to be a long, drawn-out event. In fact, it can be easier if it’s all kept quite casual. After dinner just pour some tea or coffee, pass around the chocolates and say you would like an open and honest conversation about the following three important topics.
Families often don’t discuss their financial goals with each other for fear of confrontation, but this can lead to unrealistic expectations and resentment amongst family members.
Tackle this head on! You don’t need to launch straight into the financial side of things – just go around the table and ask each person what they are looking to accomplish in the year ahead. This can naturally lead on to a conversation about finances and everyone’s individual financial goals. Openly discussing these goals together gives the person setting them a greater level of accountability and the rest of the family an opportunity to support and encourage them.
There’s no need to tell your children anything you don’t want to with regard to your finances, but every member of your family who benefits from things that cost money, such as a gym membership, mobile phone plan, video streaming subscriptions, or shared vehicles should at least be aware of what these things cost. If your children are old enough to be working, they’re old enough to be contributing to these bills and even if you are happy to be paying, they need to be aware that one day that won’t be the case, and understand that their salaries are going to have to include these things in the future.
What’s just as important though, is to make sure you’re not paying anything unnecessarily. It might be that the magazines you subscribe to on behalf of ‘everybody’ are not actually being read by anyone at all. Or you might have a family membership to an organization that no one has actually visited. If you’re not benefitting from these things, then stop paying out for them.
This is the tricky one and there’s never an ideal time to discuss what will happen when you’re gone, but it’s always going to be better to broach estate planning when you’re in good health and everyone is happy. Christmas can be the ideal time for this. Your family need to have a broad idea of how you want your estate to be settled should something unexpected happen and while it’s not a pleasant thought, nor is them not knowing what to do and worrying about it on top of their grief.
Make sure everyone knows who your executor is and where all your important documents and information are filed. It’s also wise to cover your wishes should you become incapacitated, and who should be called at your financial advisor’s office if you pass.
The end of the year is also a great time to schedule an appointment to review your lifestyle financial plan. We look forward to hearing about the goals you and your family discussed during your Christmas conversation.
This article does not constitute financial advice and should not be construed as such.