Many treat money like a taboo topic. But talking about money may help you save and invest.
Many in my parents’ generation had some hang-ups that seem ridiculous to Generation X’ers and beyond. In our current culture of sharing everything over social media, it can seem quaint to think of a generation that mostly avoided revealing who they planned to vote for, and always avoided the subject of money, no matter the audience.
But talking about money, while uncomfortable for some people, doesn’t have to be taboo. In fact, having someone you trust with a money discussion can make you a better investor. At the very least, it can make you a more trusted partner or parent. So, to whom should you start these conversations?
Talk to your partner. If you’re single and dating around, you don’t want to take every date on a tour of your finances, of course. But as you get serious with someone, it’s important to talk about money. You want to make sure that if there’s a financial calamity afoot, you both go deeper into the relationship with full knowledge of the other’s situation. How in depth your conversations get depends on your relationship and comfort level. Make sure that, even if you’re the main breadwinner, the conversations don’t sound like money lectures. Ask for your partner’s input, even if you are comfortable with your strategy and even if you’re more financially savvy than your partner.
Talk to your advisor. Ok, so the idea of trusting someone else with a discussion about money is a tough one for many. Let’s simplify it. Do you trust your advisor? (And have you confirmed that trust with a visit to Broker Check and a verification of references?)
No? Find a new advisor—one that you do trust.
Yes? Talk to your advisor about money. All things money. Your current income, debts, goals, hopes, and fears. Helping you navigate all of those things is what they do. It’s their reason for being, and the vast majority of them are really good at it.
Talk to your children. We covered this in more depth earlier this year. But while it’s always a good idea to raise good savers early, there’s another good reason for talking to your children about your finances. When most of us fall down on our savings or investing goals, it’s because we avoid the subject, start saving too late, or don’t realize the very real impact that not saving could have on our futures. Talking to your kids about money—including your current state of preparedness—will make it impossible to avoid the issue.
Research from T. Rowe Price earlier this year found that 73% of parents say they talk regularly with their kids about spending and saving, although only 61% of the kids agreed. Still, that number is much higher than it was when I was a kid. And it’s an unmistakable sign of progress.