By: Sean van Zyl
The start of a new year is a time for families to reassess their financial goals and think about the legacy they want to leave behind. While day-to-day expenses often take precedence, creating a financial foundation that supports future generations requires intentional planning and decisive action. This is where the expertise of a financial adviser can make all the difference.
Generational wealth isn’t just about having more money—it’s about creating a foundation that empowers your family to make choices, not sacrifices. To achieve this, you need to think of your financial journey as building a house—it starts with a solid design to ensure all the pieces come together in the right way.
Building generational wealth is an achievable goal when tailored to your family’s unique needs and values. It’s not about meeting external benchmarks—it’s about defining what matters most for your family. A financial plan offers a clear picture of your future and helps you balance what you can afford now with the goal of improving it over time.
A friend of mine started with a modest one-bedroom home. He built it with the vision of expanding into something larger as his circumstances evolved, aligning his immediate needs with long-term aspirations, while staying within what was affordable.
For some families, generational wealth might mean passing down a business or property; for others, it could involve funding their grandchildren’s education or creating a financial safety net.
Here are practical tips for building generational wealth
1. Understand your cash flow: Change your attitude about budgeting to focus on cash flow. Budgets often bring up feelings of deprivation, but they’re really about being in control of your money. Understanding where your money is going allows you to make informed decisions and take charge of your financial future.
2. Build strong financial habits: Big goals are achieved through consistent daily habits. Each small action—like tracking your spending, setting a savings routine, or cutting unnecessary expenses—adds up to something far greater. When combined, these habits create a financial foundation that is stronger and more impactful than the sum of its parts.
3. Start small to stay motivated: Big goals can feel overwhelming, but starting small is the key to success. Whether it’s setting aside a small amount each month or cutting back on one unnecessary expense, these manageable steps help you stay consistent and avoid burnout. Taking on too much at once can lead to frustration and a loss of motivation. Focus on progress, not perfection.
4. Review and adjust as you build: Plans can change, and that’s okay. Life is unpredictable, and your financial plan should evolve with your circumstances. If something goes wrong or you find yourself off track, don’t panic—take a moment to reassess and make adjustments. Regularly reviewing your plan ensures it remains relevant and aligned with your goals.
5. Seek guidance from a financial adviser: The best time to start planning was ten years ago. The second-best time is now. Consulting with a financial adviser today can help you take the first steps toward a secure and prosperous future. A financial adviser acts as both a coach and a sounding board, helping you clarify your goals, stay accountable, and make confident decisions when facing challenges.
Families are encouraged to think beyond saving for its own sake. At its core, a financial plan is about creating a life that reflects your values and provides your family with the security to make choices, not sacrifices. It’s not just about accumulating money—it’s about achieving true financial well-being for yourself and your family.
* Van Zyl is a certified financial planner at Old Mutual Personal Finance.
PERSONAL FINANCE