Why Everyone Needs to Learn
to Talk About Money and How to Do It
They say money makes the world go around, so why are so many of us finding it difficult to talk about their finances? “By having the conversation, you can improve your physical, mental and financial wellbeing,” according to Talk Money Week, an annual awareness campaign that encourages people to develop effective financial communication skills.
A recent survey carried out by the Money and Pensions Service about the financial behaviours of UK adults found that 55% feel uncomfortable opening up about their financial situation. The top three reasons given were shame and embarrassment, not wanting to burden others, and having been brought up NOT to talk about money.
Clearly, it’s a taboo subject for many people with the subject of money carrying a certain stigma in social situations, particularly when discussing income, savings and other financial details. But by being open to conversations about money, it is possible to put yourself into a much better position, be better informed about financial matters and share those skills with family and close friends, and even your children.
Major life events such as getting married, buying a home, having a child, starting a business or planning for the future make the benefits of talking about money crystal clear. Talk to a partner, family member, friend or financial adviser – someone you trust – and start the conversation.
What are the benefits of talking about money?
Helping you achieve your goals
Whether you are looking to pay off the mortgage, plan for early retirement, maximise your savings and investments or make the household budget work, sharing your financial goals with others can make it more likely that you will reach them. It also enables you to receive valuable financial insights and guidance on how to get there, and the options available to you.
Helping you save money
Becoming a financially savvy consumer means getting the best value for money. From home insurance to mobile phone contracts, shopping for food or domestic appliances, the latest discount codes or benefit entitlements – how do you know if you are getting the most from your budget? By comparing your outgoing to those of others in a similar situation, you could discover useful tips and tricks to help your money go further.
Helping your relationships
Being financially honest and open with your partner is a key part of developing a healthy, viable relationship. From who pays the bill on date night to the weekly food budget, saving up for a holiday or buying a new family car, money will keep coming up. Learning how to discuss finances together can be tough, especially if one of you earns less than the other, but it’s important to take any emotional ‘sting’ out of the conversation and normalise it.
Helping to lower stress and anxiety
Recent data from the Office of National Statistics suggests that more than 1/3 of us feel stressed when thinking about money. Whether you are worried about your bills or level of debt, or just need some solid financial advice, there are lots of strategies available to deal with financial anxiety, and lots of people to talk to who can help you find solutions and alleviate your stress.
Helping to make difficult times easier
Talking to your loved ones about financial arrangements when you are no longer able to make decisions may be an unpalatable subject, but it’s important to be open and practical for everyone concerned. From discussing powers of attorney to life assurance arrangements and where your will is deposited, it will be easier for your nearest and dearest to cope in these difficult situations.
How to have a conversation about money?
If talking about money doesn’t come easy to you, even if you trust the other person, there are a few tips to help you start this important conversation:
Share one of your money goals
Bringing up the thorny topic of finances may be tricky. Without putting any pressure or expectation on your conversation partner, you could simply share one of your money goals. Whether you are opening up about paying off your credit card debt, budgeting for Christmas or saving up for a special treat for yourself, it may put the other person at ease and help them open up about their goals and worries.
Create joint money goals
Once you’ve normalised the conversation around your personal finances, how about creating a money goal together with your partner to keep you both accountable? Whether you’re saving up for a new laptop this year, want to be able to buy your own home by 2025, or are planning to retire aged 60, create SMART goals (specific, measurable, achievable, realistic and timely) so that you have something specific to aim for.
Communicate your attitude to money
Some people are happy spenders while others are natural savers. And if you’re investing some of your capital, your portfolio will depend on your attitude to risk. Not everyone has the same attitude to money. When you are opening up about your finances to your partner, a trusted friend or family member, it’s important to respect their approach to money. To get an idea of their attitude, how about asking them what they would do in the event of a windfall?
Don’t get emotional
While talking about your personal finances has many benefits, as mentioned above, be sure to keep the conversation positive. It’s easy to get pulled into an emotional vortex of blaming someone for their financial mistakes or for just ‘not being good with money’ – but this is counterproductive. Instead of arguing, focus on practical solutions you can implement such as setting up a direct debit to make sure bills are paid, or starting a regular savings plan.
Financial literacy can be developed by acquiring factual knowledge, such as reading books, listening to podcasts or consulting with a professional financial adviser. However, building conversations about finances into your everyday life will give you the confidence and resilience to deal with your finances competently, whatever the future may throw at you.
About the Author
Dakota Murphey is a writer based in Brighton, specialising in management training, HR and effective talent acquisition. Having authored pieces for numerous online and print magazines, Dakota has undertaken independent studies to discover how managerial styles and practices can positively impact business productivity.