Having That Difficult Money Conversation

Most people will talk about almost anything else before talking about their finances.

The best way to teach your kids about money is to share your own financial management details, but who wants their 10-year old blabbing about their income and debts to everyone at school?

And, unless you’re in a union-type job with a stepped wage scale, salary talk is discouraged by employers and uncomfortable for employees.  People don’t want to find out that they are earning less than their peers.

Why is that money conversation so difficult?

Love conquers all

Various estimates have pegged money issues as the driving force in 70 percent or more of divorces.  Yet most couples do not talk about money before they marry.

How do you mix love and money when you’re in the throes of romance with someone who has swept you off your feet?  It’s not enough to have a lot in common and enjoy each other’s company.

While I’m not suggesting asking for a credit score on the first date (maybe wait a few dates), there are indications of how the other spends right from the get go.

Related: Treating your marriage like a business (financially)

Does he always buy?  He may seem overly generous, but can he afford to treat every time?  Does she always look for the cheapest alternative?  Is this being frugal, or tightfisted?  Do you always end up paying for everything?  Is she selfish?  Misunderstandings and assumptions abound.

Keep an eye out for patterns and especially warning signs.  Don’t let red flags go.  Don’t try to be the saviour, “He’s made these mistakes in the past, but I’m here now, I can fix it.”

Have a conversation about how you see your future, financial and otherwise – next year, in 5 years, in 10 years.

Share your feelings, experiences and hopes about money.  Discuss how your parents dealt with money and what it meant to you when you were growing up.

Be honest about your feelings.  If you’ve always been independent, it may be difficult to share.  If you have more assets, you may fear risking your hard-earned money, or feel resentment over the other’s poor spending habits.  How will you deal with combining your finances?

Rethink the relationship if someone is unwilling to discuss money, or lies about their finances.

Don’t think it’s not your problem.  After marriage it does become your problem.

Equal partnership

Do you find it difficult to talk about money matters with your spouse?  Some couples have never had an in-depth conversation about what they want or what their expectations are.

Related: Joint or separate accounts? How should couples handle their finances

There can be power struggles if one spouse earns considerably more, especially if the wife out-earns her spouse.  Money pushes a lot of buttons for people – fear, anxiety, guilt and anger.

Don’t let financial issues come between you.

When only one partner handles the finances the other can be genuinely unaware of the real cost of living in the household.  Instead of issuing blame or finger pointing, give them a sense of what’s going on.

Some couples have monthly meetings to discuss their goals, planning decisions and the current status of debts and investments.

Does anything need to change in the budget?  Are any large expenses coming up?  How can we work as a family to make this happen?

Couples often tend to marry their financial opposites – saver vs. spender, risk taker vs. security conscious.

In the long run having different approaches can strengthen your finances and relationship, but only if differences are acknowledged and you’re both willing to negotiate.

You need to consider yourselves equal partners with equal say in money management and work together to come up with your plans.

Talking to parents – a touchy subject

When the dynamic changes between adults and their parents one of the toughest topics is related to money.

Related: Talking to your elderly parents about money

Parents may not be comfortable sharing financial details with you because of the barriers of pride and privacy.  But the more you know, the better you’ll be able to help them.

Set the right tone.  If you come on too strong your parents may think you’re trying to force them into a nursing home, or that you’re just after their money.  If you’re too timid you’ll be brushed off with, “Don’t worry, we’re fine.”

A good time to talk about financial arrangements is when you’re working on your own – will, power of attorney, health care directive, funeral arrangements.  Ask if they have taken care of these too.

If something has happened to a neighbour or the parents of one of your friends – illness, death, loss of savings – it can provide a good entry point for a discussion.

Use a story or recent headlines and talk about what you’ve read – frauds and scams, changes to CPP, investing and saving.

Ask if you can put everything in a binder for simplicity.  Help them consolidate accounts and have bills paid automatically and deposits paid directly to their account.

Offer to lighten their load.  Suggest taking over some financial responsibilities such as preparing their taxes.

Pull a credit report to make sure they’re keeping up with bills and are not victims of identity theft.

Many older parents assume they’ll take care of each other, or that you’ll take care of them.  They also don’t want to be a burden.

Related: Are you expecting an inheritance?

Respect your parents’ right to determine what they are willing or not willing to share.  Let them set the pace.  Always respect their preferences.  You can make suggestions, but not tell them what to do.

If you are sincere and concerned for their well-being they will be more open to and grateful for your assistance.

Final thoughts

There is still a very strong taboo around talking about money, but that doesn’t mean you shouldn’t try.

Volunteer your own feelings about a financial issue and it may encourage your partner, or parent, to do the same.

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  1. Stephen Weyman on August 13, 2014 at 7:52 am

    It can be difficult to know the right approach to take when talking about money. Since I run a site all about money I tend to be a little bit blunt on the subject so I’m sure I ask people inappropriate questions all the time.

    I’m pretty open with my own money status so I usually give back as much or more than I get from another person.

    I think you’ve provided some good starting points for broaching this taboo subject with your loved ones!

    • The Passive Income Earner on August 16, 2014 at 9:56 am

      I find that when I start talking about money with someone not so used to it, I overwhelmed them. I have to take a step back and go slow.

      Just recently, a co-worker did not know that a TFSA could be used to trade stocks. He did not see anything useful about it thinking it was just a bank account.

      I have thought a lot to my wife about money, using it and spending it. She now can pin points how badly others manage their finances. I am however the only income earner and we don’t share the account. I basically give her money for groceries and personal money.

      I now have to get her a credit card in her name to build credit because everything is in my name. This is something important to consider when there is only one income.

  2. Gary on August 13, 2014 at 8:13 am

    i think our education system has to take more responsibility to educate our young people about money. it is difficult to talk about stuff that you haven’t been exposed to. (i.e.: i was watching guys playing cricket in the park on saturday — i had no idea what the heck was going on!) your post is great marie; but how many people will read it — 1000 or more; but there are millions of people out there that need information. i for one applaud your efforts and i am glad there are people like you and robb who are doing their part to educate us. i only wish you had been around 50 years ago!

    • Boomer on August 13, 2014 at 12:01 pm

      Well Gary, I was around 50 years ago, but like many of us, I blundered about – making lots of mistakes along the way.

      My parents rarely talk to me (now or ever) about money. Even though I worked in the financial services industry for over 30 years they think my brother (engineer) has more financial knowledge and rely on him for any help they may need. Go figure!

  3. Tom on August 13, 2014 at 8:45 am

    A good topic. Everyone has their little black list of financial blunders from which they’ve learned. I suppose I would have to say I wish I’d never heard of a Line of Credit and friends have told me they wish I’d never mentioned it to them! While my life might be different without a LoC, it has certainly enabled me to do things I never would have dreamed of doing.
    What with the mandated curriculum, incorporating daily physical activity, Health and Sex Ed, as well as (volunteer) coaching/ clubs, the teachers shouldn’t necessarily be asked to take on additional parenting tasks.
    But as a retired teacher I guess I’m a little biased.

    • Boomer on August 13, 2014 at 12:05 pm

      @Tom, I wouldn’t say that teachers should have additional responsibilities put on them or have to volunteer their time. Financial education should be a separate course (or part of a “life” course) with a trained instructors – just like a math or English teacher.

    • Diane on September 10, 2014 at 7:14 am

      Tom, a LOC has all the same benefits and risks of a credit card. The product in and of itself is not the problem, it is how you use it. A LOC can be very beneficial in an emergency situation or for investing. It should not be viewed as a bank account; this will get you in trouble. I have 5 LOC’s each with a specific duty. Most of the time they do not have a balance, but when they do it was for a necessity not a want. The difficulty is knowing the difference between the 2. Bottom line control the LOC, don’t let it control you.

  4. Robert on August 13, 2014 at 9:27 am

    I and many of my friends seem to think fairly similar on marriage. If you get married or cohabit the discussion is mostly about keeping finances as separate as possible. But the home being a major shared asset I imagine there are discussions to be had on that.

    My parents seemed to have a good sense of timing on talking about their assets and sharing control with their kids. By the time they passed away things were very simple. From that experience it is my long term goal to gradually simplify my holdings to the same end.

  5. Tawcan on August 13, 2014 at 11:36 am

    My family and I always had an open discussion about money. This got carried over when I got married. My wife and I openly discuss about money and any long term goals. I think it’s very important to have both partners on the same page when it comes to money.

    • Boomer on August 13, 2014 at 12:08 pm

      @Robert and Tawcan: I think you may be in the minority when it comes to open discussions about money.

      In my experience, the topic never arises – unless someone is talking about the big score they made on an African mining stock 🙂

  6. debs (@debtdebs) on August 22, 2014 at 5:59 am

    Some sage advice. I think we’ve done everything contrary to this in the past. But now we’ve turned it around and things are going much better. I can’t stress enough how important this is in a marriage though. We’ve just passed 25 years. 😀

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