How to begin the money conversation
“How much do you make a year?”
“How much do you save each month?”
“How much credit card debt do you have?”
“How much are the payments on that car?”
“What is your net worth?”
What makes questions like these make people feel so uncomfortable? According to a study by Ally, 7 in 10 Americans find it “rude or inappropriate to discuss personal money in a social setting.” As a Gen X’er, I was raised to never discuss your personal finances with other people, including family members. My parents never talked about money with us growing up. Even today as a 45-year-old adult, my parents in their mid-60’s refuse to talk with me about money. If I ask my mom today how much her car payment is, I guarantee you the response will be, “Enough.”
Maybe this is why we have a whole generation of middle-age adults that are stuck in a paycheck to paycheck cycle and living off of their credit cards, struggling to pay their bills with a bleak financial retirement ahead of them.
There is hope though. According to that same Ally study, 60% of Millennials have talked with others about their finances so they seem willing to learn, but two-thirds still believe it is rude to discuss in public.
Money and Relationships
Finances are also the leading cause of stress in relationships. My wife and I have definitely lived through this. Early on in our marriage, we found ourselves in major credit card debt. I would be considered the “saver” in our relationship, and she was the “spender”. Where we ran into the biggest trouble though was when she would open a credit card without my knowledge and proceed to “max” it out. This happened two different times and almost destroyed our marriage. Fortunately, we were able to work our way through these obstacles and are in a much better place today.
The Solution
Start with small conversations with friends and family about easy financial topics to discuss. Things like the best interest rates in savings accounts you have found, good credit card bonuses (only with someone financially responsible!), experiences with investment companies, loan rates, etc.. Starting with these “easier”, small conversations will allow you to slowly build up to bigger topics. You can’t just jump right into the deep end of the pool.
As for discussing with your partner, I cannot stress enough, you MUST be open with your finances. These conversations may be difficult, especially if you are the “saver” and they are the “spender” or vice versa. If you aren’t on the same page, it can completely destroy any relationship. As you talk, decide on what your goals are, determine a budget, and come to an agreement on what you both can do to help make them reality.
There’s also never going to be an “easier time” to talk about finances, you are much better off having those conversations early than waiting and compounding the problem. The earlier you start, the sooner this can be you and your partner.
Keep Stackin!