Why its important to talk to your family about finances
Updated: May 7, 2021
Studies have shown that more people are comfortable talking with friends and family about sensitive topics like divorce, mental health, addiction, race, sex, and politics rather than money. Growing up my family never discussed money openly. Sadly, when my parents divorced, it came to light that because we didn't speak about it, none of us knew the true financial picture my father had created.
Money concerns put a strain on relationships and conversations about money can often be stressful. But having family conversations proactively and often about money may help. Before getting into specific financial topics and strategies to bring up in family conversations, it is important to start with your own feelings about discussing money. Understanding your own attitude can be a major help in empathizing with family members who may feel differently than you about finances.
Some questions you should ask yourself:
How often do I speak to my children about financial topics like earning, saving, spending, investing, or borrowing?
How reluctant are you to speak to your spouse or significant other about finances?
How confident are you in your own financial decision making?
How prepared are you to answer questions about your finances?
There are many opportunities for family conversations about money. Many of these conversations can be built into the life events (loss of job, promotion at work, graduation, buying a home, retirement) that happen naturally throughout life. Don't be afraid to use these opportunities to emphasize how the life lesson impacts financial decisions.
Just as it is important to discuss certain financial topics with your family, it is also a great idea to use these natural opportunities to foster positive financial habits in kids. According to a study done by the Council for Economic Education, only 17% of students were required to take at least one semester of personal finance in high school.
But these conversations don't need to wait until high school. Just-in-time education is more effective and meaningful to children. Plan your conversations with children to be timely and appropriate. Seize opportunities in your daily life and relationship with your children to speak openly about money and create “teachable moments.”
Maybe then, we can help our family members side step bad financial decisions and bring the topic of financial education to become everyday conversation.