How to Talk About Money
Anyone who knows me knows that I’m a big advocate for getting people, women in particular, to talk about money. Money is a topic of conversation that for many of us is considered out of bounds. I certainly grew up with the view that topics like religion, politics and money were not acceptable in polite conversation.
But here’s the thing, not talking about money is holding you back. The secrecy around money impacts your financial literacy and ultimately your financial wellbeing. This is especially true for women. How do you know what’s the right rate of pay if no one around you or in your professional field will disclose what they earn? We still have a gender pay gap of around 14% - knowledge is power!
It can often feel like we are discouraged to talk about money at every turn. For example, we are happy to tell people we bought a house but not the price or how we got to the point of being able to purchase property, or we don’t ask our friends what they spend on groceries or set aside for holidays even it that might help us to put our own budget in perspective. It’s all too personal and intimidating, right?
Money is often cloaked in shame, embarrassment and fear. We feel intimidated by it because it’s something we feel we should understand even though there is no formal education structure that teaches us about it. If money is a source of stress in our lives we can feel ashamed about either the decisions we make or for not seemingly having as much of it as those around us. There’s also a social tendency to make value judgments about others based on their networth. This will vary depending on your personal values but some of the common judgements that are made might be that those struggling financially are lazy or stupid, or those with wealth are greedy and selfish. Or perhaps you think those with money are smarter, harder working and better than those without. Money can definitely be an emotionally loaded topic.
Studies show that those who do talk about money, however, acquire more knowledge, have higher levels of confidence in their decisions and ultimately are more likely to achieve their financial goals.
So where to begin? How do you open a conversation up around money in a way that is supportive, productive and safe for all those involved? Here’s a list of some Do’s and Don’ts to get you on your way.
Do - frame the conversation
Framing a conversation means defining how you intend for the topic to be discussed and is a useful tool to set the tone and direction of your money conversation. Framing the conversation in a way that encourages an open, supportive discussion will help ensure all involved feel safe to open up. If you want to start a money conversation with your partner then framing the conversation around wanting to work toward a team goal, wanting to understand each other better, or a desire to strengthen the relationship will set a positive tone for the conversation. When it comes to talking about money with friends or family consider framing the conversation as you’re looking to learn or work toward a particular goal and you would like their guidance, support, ideas.
Don’t - be judgemental
One of the big reasons we shy away from talking about money is that we don’t want to be judged by the people around us. When having a conversation about money take subtle steps to assure the person you're speaking to that their financial position or behaviours have no bearing on what you think about them.
Do - choose the right time
This is particularly important when discussing money with those closest to you like partners, flat mates or family. Often we’ll want to talk about money in the moment like when a large bill arrives or when we feel like we’re spending too much money on take away meals. Keep in mind that you want to have a positive outcome from the conversation. Starting a money conversation with someone late at night, when they're in the middle of something or after a boozy dinner may result in the other person feeling uncomfortable or defensive. Consider scheduling a time to have a discussion, make sure everyone is in a good mood and relaxed for the best result.
Don’t - get competitive about money
Personal finance is just that - it’s personal. Everyone’s situation is different and comparison is pointless. We all come from different backgrounds, have different money stories, earn different amounts of money, have different levels of support and different priorities. Furthermore, you’ll never really know what’s happening in someone else’s financial situation. Those friends with the flashy car, instagrammable holidays and the designer home might be secretly drowning in debt. Your other friend driving the second hand Subaru might have an investment portfolio worth hundreds of thousands. Your friend who has suddenly stopped coming to group dinners might be trying to save to buy a home or perhaps might have to support family members financially and can’t afford the expense of dining out. You just never know what’s going on so don’t even begin to compare. You do you, my friend, and just focus on that.
Do - some peer to peer learning
Sometimes listening to finance professionals talk can be overwhelming. They might use a swag of jargon and it makes no sense to you or perhaps they tell stories of how they did XYZ and are now millionaires which can be hard to relate to. Why not rally your gal & guy pals and get money savvy together? It could be simply asking something like, “I’m trying to find a way to manage money more easily and am wondering what you do?”, or asking them about where they bank or what superfund they’re in and why. It could also be about sharing recommendations for a good accountant, financial advisor or coach. I have a group of friends who started their own money club. They would take turns to meet at someone’s house once a month, share a meal and learn about a money topic over a few glasses of wine. What a great way to catch up and get money savvy all at once?!
Don’t - expect it to go perfectly
Learning to talk about money will take practice just like any worthwhile skill. Be kind to yourself and if you struggle to know what to say in a conversation or it starts to get heated try saying something like ‘hey, I know this is a tricky conversation but I really appreciate you discussing this with me” or “I want to discuss this with you and I know it’s difficult especially as we’re both learning how to navigate the subject. Let’s just agree to be curious and kind as we find our way” can help keep the conversation going and calm things down if need be.
Do - find some money savvy friends
Chatting to friends who are already engaged with their money is a good place to start. They probably have some good habits and tips they can share with you. Furthermore, they’re more likely to feel comfortable to discuss money with you. If there's no one in your inner circle that you feel you can chat to about this, why not find a virtual tribe? Groups like The Ladies Finance Club, The Broke Millennials Club, My Millennial Money and How to Money are just four of the many facebook groups you could join to find your tribe.
So that’s some tips to get you started. What else would you include in this list?
What I will say is get started and keep going. Remember when you first learned to ride a bike? At first there were training wheels, then no training wheels and you took a few tumbles but you got back on and kept trying. Now you can ride and say “look, mum, no hands” - you go, Glen Coco. Well, your money journey is likely to be a bit like this. Keep getting back on the ‘bike’ and in no time you’ll be a pro at chatting about money.