Earlier this year, Questis conducted a survey that found 56% of respondents–3 out of every 5 people–have fibbed about their finances on social media. And one out of three would rather watch a horror film, get stuck in a two-hour traffic jam, or have to give a speech in front of a large crowd than talk about their personal finances. And most people would prefer to talk about sex compared to money.
Why is talking about money so taboo?
In the Questis survey, 81% of respondents didn’t know. Maybe it’s because our English ancestors, particularly those who had inherited wealth, considered talking about money to be gauche, and this attitude followed early colonists to America. Many families are uncomfortable having financial conversations, and send the message, both verbally and nonverbally, that “we just don’t talk about money.” And of course, money can bring up powerful emotions for people.
But not talking about it doesn’t mean the problem isn’t there. Money is a significant source of stress: another survey of 2,000 Americans found that the average American worries about money six times a day–and for millennials that number goes up to seven.
Why financial conversations are necessary
Talking about money has a number of not-so-surprising benefits. By bringing concerns out into the open, it can help reduce the anxiety associated with financial stress. Talking about our financial goals can reduce the FOMO we often experience when comparing our situation to our friends, and can model positive behaviors–it’s really ok to talk about this stuff. We might even learn some tips to manage our own finances better, or help a friend or colleague by sharing our experiences.
Most importantly, good communication improves relationships. Couples, in particular, can reduce arguments around money by sharing their money histories with their partner–what they each learned from their families about money growing up. Understanding your partner’s background and beliefs about money builds empathy, which also tends to improve relationships. And having shared financial goals that both partners are working toward tends to reduce arguments about money.
Having financial conversations is also important for parents and children. Parents begin teaching children about money at an early age regardless of their intention to do so–children are always learning from observation as much as from what is said (or not said). By the time they become teenagers, they may be earning their own money, saving for college or other goals, and making their own spending decisions. Parents have an important role to play in getting their adolescent children to start thinking about both longer term as well as short term goals.
Adult children need to have financial conversations with their aging parents for multiple reasons. Understanding their wishes assumes more importance in the case of an emergency. In some cases, parents may be financially unprepared for retirement, with little or no savings, or may begin to experience cognitive issues, which can show up as poor financial decisions or missing timely bill payments. The key is to help them feel included and in control, even if they can’t manage things on their own anymore.
Tips for having financial conversations
While it may feel awkward at first, most people can benefit by having more open conversations about money, particularly related to personal values and goals. Here are some tips:
- Choose a relaxed setting. Long car rides can be especially good for couples and adolescents.
- Choose a time when you are both in a positive mood, and not distracted, hungry, or tired.
- Start by sharing your own experience and inviting the other person to share theirs.
- Stay curious and avoid being judgmental. Most money beliefs have deep roots and sometimes we aren’t even aware of them until someone sparks a reaction.
- Especially for aging parents, try sharing your own plans for your future finances, and ask for their advice. Then you could ask what steps they are taking.
One of the best benefits of having financial conversations is that you may realize you’re not alone when it comes to the issues you’re facing. While we know this intellectually, it can often feel like we’re the only person in our group who is wondering how our last credit card bill got so high or struggling to save for an important goal. Knowing you’re not the only person walking around feeling this way can reduce some of the stress and anxiety.
You might even find some inspiration and motivation from hearing about others’ experiences too. Over 60% of those surveyed said they’d be more willing to discuss money with those who are open about their situation, especially if it would help others feel more confident. So, there’s no time like the present to start talking about money.
Want to talk money with the Questis team?
Join the conversation on October 20th at 1 PM ET to learn why money conversations are so crucial.