The first two stages of our StewardsPlan™ process—organize and allocate—are necessary for responsible stewardship. You must know what assets you have and how much you need to live on, so you can protect and use resources wisely. However, the final stage of a StewardsPlan™ delves into bigger and deeper issues. The transfer stage is where we discuss what to do with the rest, and that’s when critical conversations take place about the difference between inheritance and legacy.
Inheritance is leaving assets to someone when you pass away. Legacy is the lasting impact you leave behind—things like values, wisdom, and influence. Money, however, can be a tool to teach what matters most to your family and to develop the next generation of responsible stewards.
Here are four lessons your children and grandchildren can learn from watching how you handle your finances.
- Consistent savings add up over time. Whether you use UTMA accounts, Roth IRAs for kids, or the newly available Trump Accounts to save for your child’s future, they will see that even small contributions compound over time and can lead to large sums when given time to grow.
- Hard work will be rewarded. From earning a monthly allowance or a first real paycheck to establishing matching criteria in estate planning documents, you can design additional incentives to reward your children’s effort and discipline.
- Continued education is an investment in yourself. Paying for college might be one of the largest expenses of your child’s upbringing, but by making education a priority, you’re showing that expanding your marketable skills is a worthwhile return on investment.
- It is better to give than to receive. One of the privileges of being blessed with financial resources is the ability to bless others. There is great joy in generosity, and by making charitable contributions, you’re demonstrating that abundance should be shared.
At Stewards Planning Group, our goal is not to help transfer an inheritance to your children; it’s to transfer your legacy. However, that process doesn’t begin when you pass away. It starts now in how you model financial stewardship.