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Mission statements can help families plan for financial security

Does your family have a financial mission statement? Wealthy families are encouraged to develop mission statements to help them decide how to distribute charitable funds and inheritances. Why not the rest of us?

Family mission statements can guide families in making decisions, clarify what is most important to them and bring the family together toward a common purpose.

The purpose of a family mission statement, according to Daniel Akst (Bloomberg Wealth Manager, December 2002/January 2003), is to determine core values, decide the purposes of income and financial assets and face any hard truths that may be buried. Although sometimes difficult, the process allows families to begin dialogues around any issues that are related to money. Hopefully, the process allows all family members to understand and respect each other a little better. Following are some questions that each family member should answer individually and then join in a family discussion.

 

  • If you had $10,000 to spend, how would you spend it?
  • What joint family goals would we like to achieve?
  • What individual family member goals do we want to support?
  • What tradeoffs of our current lifestyle might we forego for things that are more important?
  • Do we have family financial obligations outside of our family unit with other relatives, in the community or where we worship?

    The mission statement can be brief, such as a one- or two-sentence financial vision coupled with detailed steps on how to achieve the vision. But talk alone will not bring success. The family must identify and stick to a set of behaviors that may be different than current activities to achieve a new and more important goal. Plans are more likely to be successful if a timeline is set to alert and motivate the family. Last of all, these mission statements and plans should be evaluated and modified every few years - they are to be considered living documents.

    A mission statement might be: Our family wants to support the values and goals of each family member to the best of our ability. We want to educate each family member to the utmost so that they will be independent and financially secure in their lifetimes. We believe that it is up to us to contribute some amount of time, talent and money when possible to make our community better.

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