Money education in the business family: A perspective article
This article was originally written for GUBERNA, the Belgian competence center for governance.
In our academic perspectives article, we explore the critical importance of financial education within business families and argue that it is often undervalued, despite its profound implications for family cohesion and business sustainability. Money in family businesses is not merely a tool for transactions; it frequently acts as a proxy for deeper emotional and relational challenges, such as generational trauma, differing values, or feelings of inadequacy. By fostering financial literacy, we can help families navigate these complexities, enabling them to build healthier relationships with wealth and make more informed decisions.
Financial education provides several essential benefits. It can reduce conflict within the family by clarifying roles and expectations, preventing misunderstandings and disputes about wealth and responsibilities. Furthermore, it empowers family members to make better decisions regarding governance, investments, and succession planning. When financial literacy is cultivated early, it fosters a sense of stewardship, ensuring wealth is managed responsibly and sustainably across generations.
Our research emphasizes that financial education should extend beyond technical knowledge to address the societal and personal implications of money. It must help family members balance immediate desires with long-term planning and clarify the distinctions between ownership and management. By integrating these elements, we can prepare individuals to align their financial behaviors with the goals of their family and business.
Family councils and family offices play a vital role in designing and implementing these financial education programs. These initiatives should be tailored to meet the unique needs of multigenerational family businesses and should incorporate an understanding of the psychological and interpersonal dynamics of wealth. Starting education early ensures that future generations are well-equipped to handle the responsibilities that come with family wealth. We also see the need for further research into the impact of financial education on family business sustainability, decision-making, and innovation adoption. These areas of inquiry will strengthen the connection between academic research and practical applications, making financial education a core element of family business governance.
We believe that fostering financial literacy is as essential as teaching any other life skill. Just as families teach their children to swim for safety, they must also equip them with the knowledge and confidence to navigate the complexities of wealth. To implement this effectively, we recommend three key actions:
Design a structured financial education program that progresses with age - from basic budgeting exercises in childhood to complex investment and business valuation concepts for young adults, ensuring continuous learning through regular workshops and hands-on experiences.
Establish a mentoring system within the family council where experienced members guide the next generation through real business scenarios, complemented by external expert insights and dedicated annual family meetings for financial discussions.
Create practical learning opportunities through involvement in philanthropic decisions, and access to development funds for education or entrepreneurial ventures, with clear guidelines and regular assessment of financial literacy.
By embedding these financial education initiatives into family governance frameworks, we can empower families to preserve harmony, strengthen their businesses, and prepare the next generation for long-term success.
This academic article is written by Prof. Anneleen Michiels (Hasselt University, Belgium) and Prof. Claudia Binz Astrachan (Lucerne University of Applied Sciences, Switzerland), who both work with multigenerational business families worldwide through Generation6 | Family Enterprise Advisors. More on this topic in the forthcoming book ‘Geld&Generaties: Een gids voor bedrijfsfamilies en hun adviseurs’ by Anneleen Michiels.