It’s sad. It is disrespectful. It’s personal. These are all things you may feel when it comes to money. Keeping your lips tight-lipped about your finances is normal, but your financial future could be in jeopardy if you’re not willing to talk openly about financial planning.
Surprisingly, only 9 percent of teenagers regularly discuss money matters with people close to them, according to TransAmerica. Also, a survey conducted by Wells Fargo found that 44 percent of Americans see finances as the most challenging topic to discuss with others, above topics such as death, politics, and religion.
However, avoiding direct talk about your financial situation may harm your hope for a secure and happy future.
Here are 10 reasons why talking openly about money is useful and tips for starting conversations:
1. Straight Talk With Friends and Family Boosts Your Success (and Theirs)
Peer pressure doesn’t end in middle school. We feel pressure as parents, at work and sometimes even when we will retire or what to do when we retire.
However, peer pressure is not always bad. Peer pressure can also encourage us to adopt better habits and make better decisions.
- Research has shown that people who have friends with high financial intelligence become more financially intelligent themselves.
- And, just as you’re more likely to exercise when your peer group is exercising, you’re more likely to save for a secure retirement if your friends are too.
Personal finance is huge. By talking about it with friends and family, you are helping yourself and your loved ones by bringing the topic forward. Financial and retirement planning is often done privately or not at all. However, having direct discussions about it can help make the issue more prominent.
Talking about retirement can help us find new ideas for achieving financial success and ultimately prepare ourselves.
2. You’ll Avoid and Solve Problems
The Common Cents Lab told Scientific American, “In our interviews, we often encounter people who are accumulating crippling debt, missing out on savings opportunities, or who don’t know basic financial strategies that can improve their well-being—often because they were too embarrassed to question their credit. friends and family for money advice.”
Talking to people about your financial situation can help solve your financial problems.
3. Talking About Money Can Reduce Stress
Think about what you do when you have a difficult problem to solve. Chances are you turn to coworkers, friends, or family to talk. This transformation can evoke empathy, understanding, positive resolution, and almost always a more optimistic outlook.
Discussions about money can do the same. You will probably find that you are not alone in your problems and you can find ideas that will help you solve your problems.
4. Talking About Money Results in Valuable Ideas and Advice
When it comes to other aspects of your life – work, relationships and lifestyle choices – your friends and family members may be the first people you go to for advice and comfort. Why should financial advice be so different? If you’re not reaching out to people you know about retirement savings, you’re probably missing out on valuable advice.
People you know may or may not have all the answers, but just talking things out can sometimes bring clarity and new perspective to your plans.
5. More Chances for You to Follow Through on Your Plans
If you tell friends and family about your financial goals, you increase the chances that you will succeed. It adds a layer of accountability to your plans.
The study showed a staggering 3.7 times increase in the amount of deposits made by people who had the option to publicly announce their savings intention, which was then monitored in weekly meetings.
When you commit to a goal and feel responsible for someone, it’s easier to follow through.
6. Getting On The Same Page With Your Partner Is A Good Idea
Money is the number one cause of divorce. Maybe it’s because they don’t talk to each other. A study by Fidelity Investments found that only 38% of couples discuss financial strategies for retirement.
Including a spouse or partner in financial decisions can be an important financial health strategy. Research has found that participating decision makers are less susceptible to behavioral biases, leading to better outcomes.
Check out 8 financial conversations to have with your spouse.
7. Talking About Money With Your Partner Can Help You Increase Your Income
It may be uncomfortable and unwelcome in the office, but having honest conversations with your colleagues can help you increase your salary. It is important that you understand your salary relative to others in your field. Also, talking about money and salary, even if you avoid the nitty gritty numbers, can help you make a strong case for getting a higher salary or looking for a different job.
8. Talking About Money With Your Kids Can Help Them Do Better
Our attitudes towards money develop during our lifetime and we are first informed by the examples of our parents. Talking openly with your children about your financial strengths and weaknesses can prepare them to do better in the future.
Researchers have found that people from families that are open about finances are less likely to have unexpected spending problems and have less credit card debt.
9. Also, Talking to Kids About Your Heritage (or Lack of) Is Important
Although opinions vary, many financial experts recommend that parents be open with their older children about inheritance prospects. It’s also important to be honest if you expect to need financial help as you get older.
Learn more about transferring financial values and get tips for discussing money with family.
10. You May Be Surprised What You Learn From Talking To Your Aged Parents
It is important to understand your parents’ financial situation, especially if you are considering helping them in some way. And, the faster you can have a conversation, the more options you have to offer.
According to Pew Research, nearly a quarter of all adults ages 45 to 64 care for an older adult. Of the people who provide assistance, approximately 58% provide assistance with specific tasks, 28% provide financial assistance, and 14% provide personal care.
Speaking Out About Retirement Doesn’t Have to Be Embarrassing
When we were young, we might be shy to talk about personal issues, but we talked and found that everyone else had the same problems.
In our middle years, we may be too shy to discuss problems such as lack of progress at work or problems with our children. But if you ever talked, you found out that everyone faced the same kinds of problems.
As we approach retirement, we may worry that we’re the only ones who haven’t saved enough or know how to create retirement savings or when to start Social Security. However, it is unlikely that you are alone.
Study after study shows that few people are ready for retirement. We are all trying to figure it out. And we can help each other find the right answers.
How to Start Conversations
Ask questions
The secret to being a good conversationalist? Asking questions and listening to answers.
You don’t need to share a lot about your financial situation to have good financial conversations. Try one of these ice creams:
- What’s the worst financial mistake you’ve ever made?
- What did you learn from your parents about money?
- Do you have financial goals?
- Where do you get help with financial decisions?
Understand why you don’t want to talk about money
Maybe you are ashamed that you have too much or too little money. Maybe you’re afraid of sounding dumb. Once you understand why you avoid conversations about personal finances, you can address what’s holding you back.
Join the Boldin Facebook group
The Boldin Facebook group is a moderated place where people discuss financial questions. It’s a supportive place to find answers, learn, and practice talking about money.
Create and maintain your financial plan
You may feel more comfortable talking about money if your hands are close to your financial situation. The Boldin Retirement Planner can help you assess your situation and provide you with a comprehensive understanding of all aspects of retirement and financial planning. Retirement planning is much more than investing.
Take a financial planning class
Looking for a complete confidence boost? Take a retirement planning class! Boldin offers two different courses: an 8-week Intro to Planning and a Dive Deeper course with 16 different topics. Classes are led by zoom (or you can always watch the recording). Plus, there are live Q&A sessions to learn from your peers.
Try starting a retirement club
You are probably not alone in your desire to start financial discussions. Why not try starting a retirement or financial club? It’s like a book club, but with a focus on personal finance.
Find retirement club tips here.
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