Meaningful Money Conversations

As financial planners, we are entrusted with one of life’s most precious and delicate subjects, money. And it’s no news to us or to you that discussing money, even with a financial planner, can sometimes be difficult. In fact, according to a 2014 Wells Fargo Financial Health study, people are more comfortable talking about politics and religion than they are about personal finance.

Despite the possibility of discomfort – which may come from feelings of insecurity, guilt, embarrassment, or fear of the unknown, – having meaningful conversations with family about money is essential to maintaining a transparent dynamic around one of life’s most sensitive subjects, and minimizing conflicts that could arise down the road. Consider the following outcomes that have resulted from meaningful money conversations:

• Money conversations with a spouse can build trust and deliver peace of mind knowing you are both on the same page.
• Money conversations with children can be an empowering first step in forming a healthy relationship around what money might mean for the child and the family.
• Money conversations with parents about their plans for retirement or their well-being in their older years can help ensure you understand and make decisions that align with their wishes and values.

So, what might you focus on when engaging in a money conversation with your spouse, child, or parent?

Money Conversations with a Spouse

In the study mentioned earlier, 33% of married or partnered adults say they have difficulty discussing money with their spouse or partner, and 25% of those have “very heated discussions” with their partner about finances. As we’ve discussed, it is more beneficial for all when a couple knows that they and their spouse are on the same page when it comes to making financial decisions and staying up to speed with their current finances. Consider asking and answering the following questions with a spouse to help kickstart an important conversation around money:

• What is the most important benefit that our money gives us today?
• What money habits have brought you closer to your life goals?
• What or who has most influenced your financial philosophy? How and why?
• Who will be affected by the financial decisions that we make?

Money Conversations with a Child

The study we’ve been citing reports that 36% of surveyed parents have discussed the meaning of money and the importance of saving with their children. For many parents, it’s not starting the conversation with a child that can be difficult, but rather they can be uncertain about what to talk about. Yeske Buie’s Financial Literacy Program includes tools and resources for facilitating money conversations with children on the following topics:

• Saving, spending, donating, and investing
• Money choices including wants vs. needs
• Setting financial goals
• Teaching concepts including credit cards, insurance, identity protection, and more
• Taking ownership of your money

In addition to conversations, studies have shown that allowing children to participate in spending at a young age will help their development around understanding money at a faster rate. Giving a child an allowance or setting a $50 credit limit on a credit card for an older child, for example, helps them feel a sense of ownership and teaches them about budgeting.

Money Conversations with a Parent

Engaging with a parent, who has been through much more life than their children, about money can feel like a very daunting task. Remember, you’re seeking to have a discussion with them, and it’s important to approach the conversation from an assistance standpoint; talk with them, not lecture them. Seek to learn more about their wishes and values by asking curious questions:

• What is your earliest money memory?
• What messages regarding money have stuck with you throughout your life?
• What experience do you feel has most directly shaped your opinions about money?
• Do you feel your financial legacy plan accurately reflects your values and priorities?

Engaging in such conversations can help to ensure that your parent’s estate plan, medical insurance, long-term insurance, or health care directives are accurate with their wishes after their passing.

Overall, with the right approach, attitude, and effort, having meaningful money conversations with your loved ones can help everyone get on the same page and minimize any conflicts that may come to a head during a crisis or major financial decision. We hope you find the avenues provided above helpful in transforming difficult conversations into meaningful family conversations. And if you’re still hesitant, rest assured that you’re not alone! Engaging with your financial planner at Yeske Buie can also help alleviate any stress that comes with posing these questions to your family and bring peace of mind for all involved. Please don’t hesitate to contact us!