Talking openly with friends and family about money can be helpful for everyone, says blogger Jennifer Nelson. Here’s how to get started.
You wouldn’t dare ask a buddy how much his new sound system cost or how much your friend’s car set her back. Many of us learned never to talk about money with other Grownups.
Well, now that you are a Grownup, scratch that. A 2012 study found participants in a self-help group that fostered open discussions about savings progress had an average savings balance twice that of non-participants. So keeping mum about money might be holding you back from having more.
Why the taboo? Jennifer Brazer, president of virtual accounting firm Complete Controller, likens it to viewing someone’s social media page as a fair representation of their life. “That’s what they want you to see,” says Brazer. If you compare your financial fitness with the perfect picture everyone portrays, then you’ll feel like you don’t stack up.
But talking about money helps you manage it better, says Paul Moyer, founder of Saving Freak. Your friends and family have various skill sets—one might be a penny pincher who always nabs the best deal, another could be a savvy investor, the third a frugal budgeter. “If you aren’t talking about what you’re good at, then you can’t learn from each other,” says Moyer.
When you talk about money with other Grownups, consider:
Finding out what your peers earn, spend for housing, owe in credit card debt, and how much they invest will accomplish one of two things—you’ll feel better about your practices or you’ll get a needed push to budget, save, or start investing.
Money Talk: When hanging out with close friends, bring up the M-word. Mention what you’re investing, how much you’re saving monthly, or the debt you’re tackling. Then ask everyone to open up about their financial goals.
Unveiling Your Salary
In the past, workplaces kept employee pay a tightly guarded secret. Now they’re experimenting with degrees of transparency, taking cues from studies that show salary-related openness translates to happier workers. Glassdoor, a leading career site, found salary transparency exposes pay gaps between otherwise-similar workers, encouraging underpaid employees to renegotiate or move to better-fitting jobs.
Money Talk: Loose lips don’t sink ships. In fact, many companies (like Whole Foods and Buffer) are now transparent about pay. If you’re still in the dark when it comes to your company’s salaries, it could be hurting your bank account and enabling pay discrimination. If you aren’t prohibited from mentioning money at work, start a conversation with a few coworkers about transparency. Then, be ready to share your numbers.
How was money viewed in your household growing up? Our first experiences with money are powerful and offer insights into personal financial views. Ed Vargo, CFP®, Burning River Advisory Group, says discussing childhood money memories “gets the conversation started in a lively and non-judgmental way.”
Money Talk: Sit down with family, your significant other, or bestie and open up about your first money memory. Did your family have enough? Did you get an allowance? When was the first time you lacked money and couldn’t buy something? These memories can unearth myths, dysfunctions, fears, and patterns that stop you from saving, budgeting—or keep you in debt.
Think ahead: Do you want to buy a home, travel, or retire young? Work backward from there. “Talking about your goals should be fun and rewarding—dream a little,” says Vargo.
Money Talk: Sit with your partner or a financial planner and discuss how money behaviors can help you accomplish your goals. “The average Millennial will need about a million dollars saved to be able to retire successfully,” says Loyan Mensah, senior director and financial leadership coach at Transamerica Financial Advisors. Discuss specifics such as debt and retirement savings. “The more in touch you can be with your financial life and its role in accomplishing your important goals and aspirations, the more likely you are to achieve them,” says Vargo.
A Money Club
Looking for something more concrete? Start or join a money club—it’s like a book club, but instead of talking literary characters, you’ll banter investment and saving strategies. You can meet in person, create a Facebook focus group on personal finance, or ask a local planner to host a meet-up.
Money Talk: “It’s cool to talk about money—it could save your life or the life of someone else,” says Mensah. If an open dialogue about money is made trendy, that becomes the new norm, rather than a mum’s-the-word outlook. Money talk leads to better feelings surrounding saving, budgeting, investing, and debt management, which results in better choices and ultimately, a rosier financial situation.
Jennifer Nelson is a Florida-based journalist who writes about lifestyle and financial health topics for outlets like Forbes, Today.com, and AARP.
Any third-party resources or websites referenced above are not under Society of Grownups control. Society of Grownups cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.
While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.