Bank of America Merrill Lynch sends families back to the classroom

When a teenager uses a smartwatch to buy a new ‘game skin’ or orders lunch with a single tap, they may not realise they have just spent real money. In today’s cashless world, traditional money lessons are struggling to keep pace. Fifty-eight per cent of consumer spending now happens online, a figure expected to rise to 64 per cent within the next decade, according to 2023 research by Wunderman Thompson.

At Merrill Center for Family Wealth, a dedicated think-tank within Bank of America Merrill Lynch, financial literacy is being redefined to respond to today’s realities. For ultra-high net worth families, it now means more than understanding spreadsheets: it involves emotional intelligence, digital fluency and conversations grounded in values that help preserve wealth across generations.

“Financial literacy isn’t just about answering questions, it’s about empowering people to ask the right ones, about investing, budgeting, philanthropy and more,” says the New York-based head of the centre, Valerie Galinskaya.

Her multi-disciplinary team, comprising former educators, lawyers and family consultants, works with around 360 ultra-high net worth families, often across generations, and their advisers, helping clients define purpose, foster generational engagement and develop stewardship skills.

Invisible money

That guidance is especially critical for digital-native teenagers. “Some of these kids have never handled a physical banknote,” notes Ms Galinskaya, who has a background in strategy and psychology and was previously a project leader at consultancy BCG.

In what she calls a “brave new digital world”, money can feel both invisible and instantaneous. Mobile wallets and biometric payments have removed many tactile cues that once helped younger generations grasp money as finite, according to a recent white paper from the Merrill Center for Family Wealth.

A growing percentage of young people now receive allowances digitally. In-app purchases often happen in seconds, encouraging instant gratification without the visible reduction in a bank balance. ‘Freemium’ games, which promote micro purchases to level up or unlock new features, target users during moments of heightened emotion, undermining impulse control.

Online shopping, driven by flash sales and personalised ads, triggers similarly reactive behaviour. Without the experience of exchanging cash, many children lack context. “There’s no delayed gratification, or at least, developing it now takes much more discipline. Children have never had that experience,” explains Ms Galinskaya.

That puts more pressure on parents, grandparents and advisers. “How do you educate, what do you share, when the person you’re speaking to doesn’t have the same reference points?”

Teaching the psychology behind digital spending, in an age-appropriate way, can help foster more aware and responsible habits. The centre suggests making digital spending more tangible through practical activities, such as linking online purchases to physical cash equivalents or reviewing bank statements together. “The more kids can visualise and trace money’s path, the better they understand it,” says Ms Galinskaya.

Her team uses proprietary tools to help families set policies around social media, or define goals, based on shared principles and promote “experiential” learning.

Bank of America’s SafeBalance for family banking programme is a key component of its modern literacy strategy. Launched in 2024, the initiative gives young users access to their own digital banking tools, complete with login credentials and spending limits, while keeping parents in control. Children who open savings accounts by age 12 are significantly more likely to become lifelong savers, according to Merrill. 

Family values

Family conversations about responsible digital spending are important, but often absent, says Ms Galinskaya. These discussions should be rooted in values and family narratives — the foundation of lasting financial habits. Children’s attitudes towards money begin forming before the age of seven, she explains, heavily influenced by the tone and openness of parental conversations.

Such dialogues should tackle values like fairness versus equality, particularly when families face decisions around unequal financial support for education or lifestyle choices. “Without values, kids tend not to listen. It becomes nagging,” says Ms Galinskaya. “But when they understand the ‘why’, they engage.”

The cost of neglecting financial education can be high, she says, citing cases where poor communication and lack of preparation led to strained relationships and poor financial decisions. “The main reasons families fail to sustain wealth are limited communication and an unprepared next generation, and financial education is key to addressing both,” she warns.

Initiatives such as Merrill’s long-running Financial Boot Camp, now in its 15th year, introduce rising generations to topics like investing, wealth communication and estate planning. Delivered in partnership with leading US business schools, the two-day sessions also encourage open dialogue and offer participants the chance to connect with peers.

Her team promotes a “dimmer switch” approach to financial transparency, introducing structures and values before revealing specific numbers. “Families don’t need to leap from secrecy to full disclosure,” she explains. “Overwhelm, not entitlement, is often the real reaction to early financial disclosures.”

Education is not something to be outsourced, she says, recommending real-world financial practice and parental modelling. “Children benefit from seeing their parents engage vulnerably and honestly. It strengthens families.”

She also highlights the value of emotional support, “That’s where my group comes in,” she says — helping people explore the money messages from childhood, the values that shaped their thinking, current concerns, and which financial skills to prioritise. In one case, a daughter’s passion for philanthropy led her family to rethink their approach to financial education, broadening it beyond investment expertise.

Collaborative approach

Advisers also receive training in how to guide these sensitive discussions. “Some advisers get nervous about boundaries when discussing personal or complex issues with clients,” she says. “We support them, and when specialist input is needed, from a psychologist, mediator or coach, we have a vetted network we can draw on.”

Ms Galinskaya believes the future lies in a more collaborative adviser model. “The best advisers we work with aren’t afraid to involve others,” she says, noting that this approach enhances their ability to retain and grow client assets. “They listen, ask good questions and take a broad view of wealth. It’s not about having every answer, it’s about guiding the conversation.”

That shift, she says, brings meaning to the work: “Advisers tell us it brings greater purpose to their work. They are not just growing portfolios but helping families educate the next generation. It’s these conversations that families remember.”

By blending emotional insight, digital competence and shared values, families can ensure their wealth not only lasts across generations but serves a greater purpose.

 “In a world where everything is being commoditised, this human approach is a key differentiator,” she says. “These families have outsized influence, financially, socially, philanthropically. Helping the next generation lead with clarity and purpose has the potential for real impact.”