Whether at a family reunion or a business lunch, we all know to avoid topics like politics and religion if we want to stay out of arguments and avoid making people feel uncomfortable. Another taboo topic that can be even more uncomfortable for people to discuss is money – specifically, personal finances.
Americans consider money as one of the hardest topics to talk about with others. In many cases people think personal finance is even harder to talk about than death, politics and religion! Knowing how passionately we tend to feel about the rest of these topics hints at the emotions tied to the money we carry in our wallets and bank accounts.
And talking about money doesn’t get any easier inside our homes either. Although we could discuss the many reasons we have for avoiding money talk with family and close friends, let’s look, instead, at five advantages of talking about it more in both private and public circles:
1. Talking about money impacts our ability to enjoy a good relationship with our spouses and family members.
Too many people in our country avoids having a serious conversation about finances with their partner, as most people feel uncomfortable discussing their personal finances with their significant other.
Being unwilling to discuss something as important and integral to a partnership as finances, breeds distance or even distrust in any relationship. There may be hurdles and differences to reconcile (we all come from diverse backgrounds with different money values), but talking about finances can open doors to greater understanding — enabling couples and families to find compromises and common ground, learn from one another’s strengths, and help each other learn and grow in financial management.
2. It can help you find answers to questions and grow in financial knowledge and wisdom.
Even in the business or social world, being willing to speak up about money can help you succeed in life. Many of us have questions about our finances. For freelancers, it might be how much money to charge clients; for an employee, it might be how much salary we should ask for; in the investment, savings, and debt-repayment realms, it might be which options are best for our personal situation.
Being too timid or embarrassed to ask these types of questions holds us back from getting practical, valuable advice we can use to grow.
3. Vocalizing a more positive language around money can help you change your money attitudes.
Talking about money is one thing, but there’s also how we talk about money. Are you overly negative about your financial outlook, saying things like ‘I’ll never get out of debt,’ ‘I’m always broke,’ or ‘I’m going to have to work until I’m 90 because I can’t afford to retire’?
Not only talking about money, but purposing to talk about it more positively, can help you change your attitude. Your attitude, in turn, can directly affect the financial decisions you make and your ability to improve your financial situation.
4. Talking to our kids about money can help them develop good financial attitudes and habits.
Parents need to talk to their kids about money too. With limited financial education in schools, kids are left to learn by example – whether from you or from their peers. Hopefully you’re modeling good financial habits, but discussing your struggles, what you’ve learned, and just being real about money with your kids can make a huge impact on their ability to manage their own finances in the future.
5. Being the first to break the ice can make others feel more comfortable talking about money, too.
Just because no one else is talking about money doesn’t mean it’s taboo. Start talking about it, and you’ll be surprised at how relieved others are to be able to share their struggles as well. You could be the one who opens the door to financial growth for many others, so consider taking that first step.
4 Tips for Giving Financial Advice to Family & Friends
So, now that you know how beneficial it can be to talk to people about money, here are a few tips on ways to break that ice. Keep in mind that you have to be in the mindset to provide them with the knowledge in a loving way in order to impact their current financial situation. This can snowball into other areas of their finances as well, so what you are doing can have a profound impact on those you love.
#1. Don’t tell them they’re wrong.
It’s easy to see things as black and white from the outside — especially when you’ve ‘been there, done that’ in a certain situation and are eager to help someone else avoid the same mistakes. When someone’s deeply-ingrained opinions and feelings are involved, it’s a bad idea to say or even imply that their decisions or habits or wrong.
A better approach is to use examples. These can be examples from own life or purely theoretical, but the idea is to share something they can learn from without it coming across as a personal attack.
#2. Be understanding and positive.
It’s hard to face our own financial problems, but when someone commiserates and identifies with our situation on a personal level, it’s easier to receive. It’s also important to offer a positive alternative. Only warning someone of the negative outcomes of a financial behavior can be discouraging, but showing the advantages of changing the action is more likely to inspire hope and motivation.
#3. Offer to help.
To someone without financial know-how, tasks such as setting up a budget or automating savings can be overwhelming, even if they see the wisdom in these things. Offer not only your advice — but your help.
#4. Know your limits.
Regardless of how much you might have learned at an amateur level, some financial situations and topics need expert advice. If you’re not an expert on, say, investing, don’t overstep your knowledge and abilities. Give what you have and point your family member or friend in the direction of a trusted professional advisor.
#5. Realize that, ultimately, it’s their decision.
Watching those we care about make bad financial decisions despite the advice we or someone else may have given them is hard, but sometimes experience is the best teacher of all — the lessons that stick the strongest are the ones we learn the hard way. Just be there to offer support and help when they’re ready for it.
Giving family and friends financial advice can be uncomfortable and potentially volatile, but following these tips can help you communicate your knowledge and concern in a way that’s welcomed and life-changing.
Do you have any tips for offering financial advice to those your closest to?
{ read the comments below or add one }
Always know your limits and err on the side of caution. “Should I invest in Weed stocks?”, if you aren’t well versed in this area, for God’s sake don’t even make a flippant comment, as you may end up with a friend or family member investing large amounts of money because, “You said it was OK!”. Yes that kind of thing happened to me. A little “advice” is always a dangerous thing. Yes, tell them NOT to get Payday loans, or run up credit card debt, but be very careful with investing comments.
I think talking about finance in general is very positive. Talking details with a spouse or money coach is VERY important. Getting into details publicly or with a group though can sometimes have a negative effect. Perhaps because we, as a society, aren’t comfortable with the topic, but still… it can create discontent sharing details outside of close relationships.
I think this is one area where you might want to try something in social media that is well-moderated and where the posters are in a similar situation to you with similar life goals. Unfortunately too many of us are not very knowledgeable on this topic and our behavior is usually not exemplary, so just getting input from random people around you may not give you what you need.
Another benefit comes from online anonymity. So long as you treat your online persona at arm’s length, you can feel free to ask and suggest without fear of being judged. Even if you’re well-off I think it’s worth an occasional read because you’re likely to learn something that could prove to be useful.
Of course the downside is most of the interaction involves using a keyboard and having to communicate effectively in writing, both of which most people would find to be inconvenient. But if you keep things short and simple and watch out to never share too many details that could identify you, it should be a good resource.
My advice: from what I hear much of what appears on Facebook tends to push in the opposite direction to good financial behavior, so maybe ease out of that and instead tune into something like Dave Ramsey or personal finance blogs like this one.