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Money education in the business
family: a perspective article
Anneleen Michiels
Hasselt University, Diepenbeek, Belgium, and
Claudia Binz Astrachan
Lucerne School of Business, Lucerne University of Applied Sciences and Arts,
Lucerne, Switzerland
Abstract
Purpose –The primary aim is to renew academic discourse on financial education in business families.
It emphasizes the need for effective financial literacy programs to foster a healthier relationship with money,
addressing both technical aspects of financeand its psychological and relational impacts amongfamily members.
Design/methodology/approach –This perspective article explores the impact of money education within
business families. It discusses the psychological effects of money education on family dynamics and decision-
making in family businesses. The research draws on previous studies, surveys and practical examples to
highlight the importance of financial education and its implications on family and business sustainability.
Findings –Financial education is essential in business families as it enables more meaningful discussions on
money and wealth, fostering informed decisions and decreasing conflict. Yet, it is often overlooked. There is a
need for academic research into effective strategies for financial education for family members and the effects
of financial literacy, or its absence, on various aspects of the business and the family system. The article
presents a selection of pertinent questions for future research in this domain.
Originality/value –This article contributes to the family business field by underscoring the gap in scholarly
research on money education within family businesses. It advocates for comprehensive financial education
strategies that balance technical knowledge with an understanding of the psychological and relational aspects
of money.
Keywords Family business, Family dynamics, Family unit
Paper type Research paper
Introduction
The convergence of wealth and kinship within a family business system often manifests as a
complex web of financial and emotional interdependencies. Beyond its function as a medium
of exchange, money exerts a psychological influence, affecting familial relationships and
decision-making processes. In 1993, an article by Astrachan underscored the significance of
money education, seeing a field ripe for academic inquiry. Thirty years have passed, and as
with many thought-provoking research pieces, the academic debate has not continued to
explore this topic that is so hugely influential in practice. With this perspective article we seek
to renew the academic discourse on the role of financial education within business families.
Money in the family business
Psychological research has shown that even subtle reminders of money elicit significant
changes in human behavior (see, e.g. Vohs et al., 2006;Teng et al., 2016), and many of the
conflicts face by multigenerationalbusiness families are, in one way or another, linkedto money
(Benjamin and Irving, 2001;Wakefield and Sebora, 2004.) Yet, these money conflicts are often
proxy conflicts that conceal deeper issues, such as generational trauma, disagreements in
values, feelings of moral responsibility, privilege, independence, equality, greed, resentment,
Money
education in
the business
family
Since submission of this article, the following author(s) have updated their affiliation(s): Claudia Binz
Astrachan is at the Centre for Family Entrepreneurship and Ownership, J€
onk€
oping University,
J€
onk€
oping, Sweden and Witten/Herdecke University, Witten, Germany.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2043-6238.htm
Received 5 January 2024
Revised 12 January 2024
12 January 2024
Accepted 12 January 2024
Journal of Family Business
Management
© Emerald Publishing Limited
2043-6238
DOI 10.1108/JFBM-01-2024-0006
shame or self-esteem, to name a few. This leads to friction that is seemingly about money, but
reflecting more profound relational issues. For example, it is often easier to argue about money
than to express feelings of inadequacy or loneliness (Shapiro, 2007).
In business families, where financial dynamics are deeply intertwined with relational
bonds, money thus acts as a pivotal force that shapes interactions and decision-making
processes. A transparent, healthy relationship with money is therefore not just beneficial but
probably even essential for the longevity of a business family. It can foster stronger, more
cohesive family ties and mitigate the potential for conflict, thereby becoming a critical
differentiator between well-functioning and dysfunctional business families in the long run.
The foundation of such relationship is education.
Money education
Evidence from research and practice underscores the importance of educating the next
generation about the privileges and responsibilities accompanying wealth. Worldwide,
financial literacy remains low among young adults, with many lacking basic economic
knowledge, leading to detrimental economic behaviors and poor financial planning (Lusardi
and Mitchell, 2014). This is also reflected in the findings of a recent survey among members of
multigenerational business families (Michiels and Astrachan, 2023), where 34% of
respondents indicated that they were not educated early enough by their parents about
money and wealth. What is more, 22% of the respondents expressed a desire to understand
financial affairs better, signaling an awareness of their limitations and a potential interest in
further financial education. This shows that members of business families recognize the
importance of financial acumen and show a desire to learn.
Educating children about money, especially in a family business system where disparities
in the financial understanding of money can be a source of severe conflict, should, therefore,
start early. It should focus on understanding money’s value and role in society, spending and
saving habits and the long-term implications of financial decisions (Baron and Lachenauer,
2021;Webley, 2005;Pieper and Astrachan, 2020). Effective financial education must also
address human tendencies towards instant gratification and foster a solid understanding of
actions and their consequences. Such education lays the groundwork for self-confidence and
responsible autonomy, essential qualities for managing wealth. For example, introducing the
concept of delayed gratification and distinguishing between ownership and management are
critical to preventing entitlement and ensuring a responsible stewardship mindset (Mischel
et al., 1989;Astrachan and Pieper, 2020). Money education aims to nurture financially literate
individuals who can align their financial behaviors with the long-term objectives of their
family and the family business. Developing such financial educational curricula for family
members can be a responsibility of the family council (Barbera et al., 2023;Astrachan et al.,
2020) or the family office (Rivo-Lopez et al., 2021).
There is a need for academic research into effective strategies for financial education for
family members and the effects of financial literacy, or its absence, on various aspects of the
business and the family system. Furthermore, the interplay between financial education and
family business dynamics extends into critical operational domains such as succession
planning and family office governance. Future research could investigate the role of financial
literacy in preparing the next generation for leadership transitions or to for effectively
managing the wealth they will inherit. Similarly, the efficacy of family business and family
office governance might be influenced by the level of financial education among its members,
which dictates their ability to make informed decisions regarding asset allocation and risk
management decisions. These connections underscore the importance of integrating financial
education into the broader framework of family business continuity and governance models,
warranting further empirical exploration to strengthen the theoretical underpinnings of this
emerging field of study. Table 1 below presents a selection of pertinent questions for future
JFBM
research in this domain, based on our review of the literature, and interviews with experts in
financial psychology, family business advisors and members of multigenerational business
families. Tackling these questions will also ensure future research in this area is as relevant as
it is rigorous (Ratten et al., 2023,Astrachan et al., 2021).
Conclusion
In this article, we articulate the need for future scholarly inquiry into the nuanced role of
financial education in both sustaining and advancing multigenerational business families.
We propose a holistic educational paradigm that seamlessly integrates technical financial
knowledge with an understanding of the psychological and interpersonal dimensions of
wealth management. We have set forth an argument that positions money education as a
central element in the broader discourse on business family sustainability (e.g. succession,
governance, family dynamics), thereby offering a layered perspective that aims to enrich
future academic dialog and practical application.
We believe fostering a culture where financial dialog is as fundamental as operational
discussions is paramount to forge resilient family businesses. Just as we teach children to
swim to ensure their safety around water, we must equip family members with a clear
understanding of the rights and responsibilities that come with wealth. Imparting this
knowledge is a duty, not a mere option, to prepare them as capable and responsible stewards
of both their personal wealth and the family’s assets.
Area of future research Specific research question Importance for practice
Intergenerational
financial literacy
Which financial concepts are most
frequently misunderstood between
generations within family businesses?
Pinpoints targeted interventions for
educational programs to bridge
knowledge gaps
Optimal timing for
financial education
When does financial education have
the most significant impact on financial
behaviors in family business members?
Enables the structuring of financial
curricula at optimal developmental
stages for long-lasting effect
Financial knowledge and
financial decision-making
How do variations in individual family
members’financial knowledge affect
financial decision-making in a family
business (e.g. dividend policy, debt
level, asset allocation)?
Uncovers the influence of financial
knowledge on financial decision-
making
Impact on family and
business sustainability
What is the impact of financial
education on the sustainability of
family wealth and the business itself?
Gives insight into how financial
education might affect family and
business longevity
Financial literacy’s role in
innovation
What is the relationship between the
level of financial literacy among family
business members and the rate of
innovation adoption in family firms?
Identifies how financial knowledge
contributes to or hinders the adoption
of innovative practices
Communication of
financial information
How do methods of communicating
financial information within the family
business affect individual and
collective financial decision-making?
Illuminates effective communication
techniques for financial information
sharing and education within the
family business
Financial literacy and risk
taking
How does the level of financial literacy
among the family business owners
affect risk taking?
Helps family businesses develop risk
management strategies that are
informed by a comprehensive
understanding of financial literacy
Educational interventions
for wealth stewardship
Which educational interventions are
most effective at instilling a sense of
wealth stewardship in next-generation
family business members?
Guides the development of
educational programs that promote a
long-term stewardship mentality for
sustained business health
Source(s): Author’s own work
Table 1.
Potential research
avenues
Money
education in
the business
family
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JFBM
About the authors
Dr Anneleen Michiels is an Associate Professor of Finance and Family business at the Research Center
for Entrepreneurship and Family firms at Hasselt University, Belgium and a family business consultant.
Her research centers around the complex relationships between money, family businesses and the
families that run them, and is published in both academic and practitioner-orient ed journals. Anneleen is
an editorial board member of the Journal of Family Business Strategy, a board member at the
International Family Enterprise Academy and a former European Academy of Management family
business chair. Anneleen Michiels is the corresponding author and can be contacted at: anneleen.
michiels@uhasselt.be
Dr Claudia Binz Astrachan is a researcher, family business educator and family business consultant.
Claudia’s research and practice are informed and shaped by her understanding of the role of family
cohesion, effective communication and conflict management, and family and business governance that
align with the values, culture, and objectives of the owning family. Claudia is the chair of the board of the
International Family Enterprise Research Academy and a former family business chair at the European
Academy of Management. She is a visiting scholar at Witten/Herdecke University in Germany and an
affiliated researcher at J€
onk€
oping University (CeFEO) in Sweden.
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Money
education in
the business
family
