If you have children and grandchildren, you likely make it a priority to bestow on them any pearls of wisdom you’ve learned throughout your life.

After all, part of raising children is using your experiences to teach them valuable life lessons. These lessons could help your children and grandchildren to be more independent, self-starting, kind, and motivated as they get older.

Yet have you ever considered how, as a business owner, your unique point of view could be extremely useful to the children in your life?

Being a business owner and a parent or grandparent may have its downsides, perhaps you find that you struggle to spend enough time with your family. However, your role may have taught you infallible lessons – particularly where money is concerned – that come in handy as your children grow up.

Learning important financial basics is essential for children. But according to RTÉ, Ireland lags behind other countries when it comes to financial literacy, with the youngest age bracket only scoring 48% in a basic financial questionnaire.

With this in mind, here are three important lessons business owners can teach children about money.

1. A little goes a long way

Whether you inherited your company as a family business or started it from scratch, you will likely have experienced difficult financial periods over the years.

Be it the Covid-19 pandemic (which saw many in-person businesses close down temporarily) or working in a fast-changing industry, financial hardships may arrive seemingly out of nowhere.

But once you emerge from the other side, you’ll likely have a greater appreciation for the phrase “a little goes a long way”.

In order to charter a course through hard times, you might have cut expenditure by as little as 5%, or worked extra hours to increase customer engagement by a small margin.

While seemingly insignificant, a 5% reduction in expenditure or a similar increase in engagement over a whole year, for instance, could have made the difference between closing your doors and remaining open.

So, when you’re sitting down to talk about money with your children, remember to teach them that a little goes a long way. Remind them that saving just €5 a week would mean they had €260 at the end of the year – a huge amount for a child or young teen.

As they get older, the same goes for investing. The magic of compounding returns means that even if they invest a very small amount each month, over the course of a decade or more, this could turn into a substantial pot of money that helps them achieve their ambitions.

2. Setting medium- and long-term goals could help you succeed

As a business owner, it’s likely that you’ve set rigorous targets throughout your working life, especially where money is concerned.

Children often live moment-to-moment – and understandably so. But as they get older and are able to think further ahead, it could be wise to teach them about the power of setting medium- and long-term goals.

Some examples of important medium-term goals for young people include:

• Buying their first car
• Building an emergency fund
• Saving up for a once-in-a-lifetime travel experience
• Purchasing their first home after leaving school or university.

Once your children reach their mid to late twenties, they might want to set long-term goals including:

• Investing consistently to build wealth
• The age at which they want to start a family.

If they struggle to envision these goals or take practical steps to achieve them, you could use an example from your career to explain how goal setting works in practice.

Pick a time when you set a target for your company, such as expanding your team, and explain how you took financial steps to achieve it.

A concrete example could help your children or grandchildren feel more confident about setting their own goals and help them to understand why these targets could make such a difference.

3. Learn to separate “wants” and “needs”

In today’s world, almost anything you want to buy or consume can be found online. From clothing to experiences to food items, almost everything is available at a few touches of your phone or tablet screen.

For young people growing up in this environment, it may be hard to differentiate between wants and needs. Unlike your pre-internet upbringing, throughout which you might have had less access to your “wants”, your children and grandchildren might be used to getting what they want without delay.

But as they get older, consumerism could stop them from reaching their financial goals, or even shake their stability if their spending becomes out of control. So, from an early age, it could be wise to teach them the difference between what they want and what they need.

Using your experience as a business owner could help tremendously here. You might have wants for your business, such as to modernise your office space. But until the foundational needs of the company and employees are cared for, you will likely place these wants on the bottom of your priority list.

Talking to children about building their basic foundation – like investing and saving – before indulging in too many luxuries might set them on a more disciplined path for the future.

Financial planning could help you stay focused where your personal wealth is concerned

We know that running a business can be all-consuming, which is why we focus entirely on helping business owners take care of their personal wealth.

With our guidance, you could be in a position to grow your personal wealth and help the next generation as you do so.

Email us at clients@iqf.ie, or call 353 71 915 5560.

Please note

This article is for information only. It does not constitute advice.

It describes financial planning services that iQ Financial can offer to you. Financial planning services are not regulated by the Central Bank of Ireland.