Talking to your family about money

How difficult is it to talk to your family about money?

We endure a diversity of experiences throughout life. Some only a few people will experience, others are situations that everyone goes through. Regardless, no matter what the circumstance, everyone will react differently because of what they’ve gone through.

Anxiety, procrastination, sympathy, a lack of knowledge. All of which can be bumps in the road when we’re trying to finish a journey or a task. This includes that moment that we all reach in life, when it’s time to discuss money with our loved ones. You’ll read that sentence and you may be flushed with one of those road bumps right off the bat. Which is completely understandable, it’s an abrupt occurrence, and can be alarming because you may not know how your loved ones will react to a conversation about money.

Responses could go either way with this subject, but unfortunately, some can get prickly when discussing finances, and that’s when the temptation to panic or procrastinate arises.

If you have no idea where to start, the very first thing we advise you do, is to eliminate the mindset that this is an explosive topic. You must try to treat this as if it will be a normal conversation.

Money can be harder to talk about than death.

Studies have shown that out of the largest topics; ranging from death, religion, and politics, 44% of people found that personal finances are the most difficult to discuss.

Which may seem a little unrealistic but consider it for a moment. Discussing death, while it is painful, is a-matter-of-fact topic. You can’t prevent it, the best thing you can do with loved ones regarding death is come together. But a debate of money could strike offence, create conflict, could make some feel unworthy, some feel outranked. The list goes on, and again it all depends on who you’re talking to and what your family’s situation is personally.

Tips For The Talk

Chances are, we’ve all experienced that sudden heavyweight in our stomachs when hearing the phrase “we need to talk…”

A lot of conversations about money tend to happen during a crisis or when a person needs some. However, if you can manage to make money a general, unconditional topic of conversation (alongside and throughout other chats), you can reduce the difficulty when it’s finally time to have the talk. Bearing in mind this tip would have to be something you implement a while before the talk itself.

Regularly discussing financial tips, tricks, or experiences with kids, siblings, and parents will normalise it and soften the impact later on. Start small — savings, investments, monthly budgets, advice you got from your parents or trusted advisors — and work up to bigger conversations once everyone’s on board and settled into the regularity.

Generational Divide

Further studies have shown that 69% of older respondents view monetary gifts as an expression of love. On the flipside, 30% of millennials see monetary gifts as a way to exert control or influence.

This all boils down to the simple fact that these diverse age groups are living through completely different experiences. An older person who’s worked their whole life to amass savings, has an entirely different perspective than someone in their early 20s just getting started on the journey. So, while you might never see eye-to-eye with someone decades younger or older than you, it’s important to try and understand their point of view.

Finding The Right Place

When it comes time for a bigger discussion about money and estate planning, where you meet can dictate how well it will go. We recommend choosing a location that will set everyone at ease. Your options are varied, but you should consider a setting that’s suitable for a serious talk, but not at all intimidating. Somewhere private but not too formal – maybe even a private section in a restaurant. You would have the convenience of a meal that hopefully everyone will enjoy, and the restaurant setting does give off more of a hassle-free vibe.

Be Calm While You Carry On

Body language is something to try and keep in mind during this discussion, because usually family members will know you at your best and worst. If a family member recognises a slight mannerism or catches an eye-roll, things can get dramatic and explosive very quickly.

Ideally, you should have a clear idea of what you want to accomplish. If you’re one of the ‘family elders’, you are most likely have a much better handle on all the finances and can dictate the tone and agenda. You should try to ensure that everyone is comfortable and let people know that they can ask questions.

Finally, try not to be coy. Unless someone is demanding specific figures that you’re unwilling to talk about, try to answer as openly and honestly as possible. For example, if your Will states that all your assets will be divided equally among your adult children, tell them that. The entire point of ‘normalizing’ money discussions with your family is to limit surprises, not heighten the suspense and turn it into an even more problematic time after you’re gone.

Is your child considering attending university? Read our blog to find out the best approaches to discuss student loans with your them.

Take a look at our 5 step plan for retirement.

Source:

https://www.everplans.com/articles/how-difficult-is-it-to-talk-with-your-family-about-money