Money is a topic that many would prefer to avoid. It’s supercharged with emotion, family history, societal conformities, and factors related to our relationships. According to a Wells Fargo study, “Society has conditioned us to think that sharing financially related numbers is so taboo, that the only piece of information deemed more scandalous to share is the number of romantic partners” one has had. This seems to be magnified when women are compared to men. Men in this study were more willing to share information about their salary, savings, spending, and credit scores than women.
Talking about money can feel uncomfortable, but it’s an essential skill. Whether you’re in a relationship, managing family finances, parenting children, or simply navigating your own financial goals, knowing how to have conversations about money can strengthen your relationships, reduce anxiety, and lead to better financial outcomes. But how do you start? And why does it matter so much?
Take Inventory: Where Do You Stand?
Begin by reflecting on your own attitudes and experiences with money. Were you taught to view money as a taboo topic? How did your parents deal with money and how has this experience affected the way you approach your own money? Have past experiences made you wary of discussing finances? Do you feel shame around past mistakes? Understanding the lens through which you perceive money is the first step toward productive money conversations.
Now consider your relationships. Who are the people in your life with whom you need to discuss money? This could be your partner, children, parents, advisors, or even close friends. Think about your goals for the conversations you want to have with them—whether it’s managing shared expenses, supporting a loved one, or making long-term financial plans. How can you approach this in the most constructive way?
The Cost of Avoidance
Many people avoid talking about money because it feels awkward or confrontational. But avoiding these conversations can lead to misunderstandings, unmet expectations, and missed opportunities.
For example, couples often assume they’re on the same page financially, only to discover differences in spending habits or savings priorities. This can create missed wealth-building opportunities. Parents might hesitate to discuss financial realities with their children, leaving kids unprepared for future responsibilities and reducing their financial literacy. Open communication about money helps prevent these scenarios. It allows you to set clear expectations, establish boundaries, and work together toward shared goals. Families who don’t discuss finances may be unprepared for emergencies. Discussing estate plans, emergency savings, insurance coverage and access to essential financial information can reduce stress during critical situations. Avoiding money conversations will surely create problems with long-term planning. Tax inefficiencies, legal issues, unspoken legacy wishes, and lack of proper planning can lead to plans that don’t last through old age and estate plans that are inefficient or ineffective.
Practical Steps for Effective Money Conversations
- Start Small: Begin with a casual, low-pressure conversation. Share your thoughts on a financial goal, like saving for a vacation or paying down debt. Limit the topic to everyday matters, like budgeting or upcoming expenses that need to be covered.
- Schedule Regular Check-ins: Schedule regular check-ins to allow these conversations to feel more routine. Have a monthly review to ensure you’re on track.
- Identify Shared Goals: Focus conversations on shared goals and the progress you are making towards them. Make adjustments as needed.
- Reduce the Emotional Connection: Avoid discussing money when emotions are running high or during stressful situations. Choose a time when both parties are relaxed and open to dialogue.
- Be Honest and Transparent: Share your thoughts, feelings, and financial situation openly. Acknowledge any mistakes or past challenges and invite the other person to do the same.
- Listen Actively: Pay attention to the other person’s concerns and perspectives. Avoid interrupting or jumping to conclusions.
- Focus on Solutions: Instead of dwelling on past disagreements or mistakes, work together to create a plan for moving forward. Don’t shame or blame, simply move forward from where you are now.
- Involve the Family: While you don’t need to share the scope of your finances with your children, you can find age-appropriate ways to teach them and instill good habits.
- Enlist a Professional: Work with a financial advisor who can help focus your conversations around top priorities. An educated third party can often diffuse emotional topics because they have the ability to view the issue without emotion.
Building a Financial Partnership:
For couples, financial conversations are especially important. Money is a leading cause of relationship stress, but it doesn’t have to be. By establishing shared goals, budgeting together, and maintaining open communication, couples can build a strong financial foundation. If you’re not in a relationship, you can still benefit from having trusted individuals to discuss finances with—whether it’s a close friend, family member, or financial advisor.
Don’t Wait—Start the Conversation Today
Talking about money isn’t always easy, but it’s one of the most impactful steps you can take to improve your relationships and financial well-being. Whether you’re planning for the future, resolving a disagreement, or simply identifying your financial goals, an open dialogue can pave the way for mutual understanding and success. Don’t wait for the “perfect” time—start the conversation today. Your relationships, and your financial future, will thank you.
Our articles this year will focus on different Conversations About Money. What conversations do we need to have and what do we need to communicate? What information needs to be shared and what decisions need to be made? How can you best present the information to increase the likelihood of a productive conversation? Upcoming conversation topics will include: Prenuptial Agreements, Co-habitating Financially, The College Conversation, Debt and Disputes, Marriage, Retirement, and more.
PLEASE SEE IMPORTANT DISCLOSURE INFORMATION AT www.twelvepointswealth.com/disclosure
