Despite growing efforts to bring personal finance education into the classroom, the topic of money remains taboo in many homes: between spouses, from parents to children, and among older generations who still consider conversations about personal finances to be forbidden.
Yet many in the financial community suggest that those who talk about their savings and spending have healthier relationships with their loved ones, and may even be more likely to achieve their financial goals.
“Money is not only a difficult topic, but the most difficult topic in many homes, and particularly with couples,” said Deborah Price in an interview, a money therapist and founder of the Money Coaching Institute in Novato, California. “It’s important to talk about money because it creates a feeling of safety in your relationships, whereas not talking about money often leads to fear, secrecy, and a loss of intimacy.”
Price acknowledged that breaking the silence can be difficult. Why? Money is charged with emotional subtext: the fear of being judged, feelings of shame, or an adherence to old-school etiquette that held it was impolite to discuss income or assets.
To change the communication standard in your own home, it helps to explore the money taboos that persist in modern America and the many benefits that may be derived from bringing the family finances to the fore.
Taboo #1: Silence between spouses
Married couples who don’t share their vision for the future, fully disclose their assets and liabilities, and set financial goals together create walls in their relationship.
Even worse, those who keep secrets from their partner about money (or anything else) erode trust in the marriage. But many do.
A 2016 Harris Poll survey for the National Foundation for Credit Counseling found that 39 percent of adults who have combined their finances in a current or past relationship committed “financial infidelity” against their partner – meaning they have either hidden a purchase, bank account, statement, bill, or cash from their partner. Sixteen percent of them said they committed more serious deceptions, like lying about the amount of debt they carry or their income.1
“When you agree to combine finances in a relationship, you’re also agreeing to a certain degree of cooperation and transparency in your money management,” said Ted Beck, president and CEO of the National Endowment for Financial Education, in the press release. “It’s easier to achieve joint financial goals when your money is pooled and working together. Yet, we’re seeing the implicit promise of collaboration destroyed by financial game-playing.”
But it’s never too late to change. By verbalizing your vision for the future and working together toward shared goals, you can help to strengthen trust in the marital team, said Price.
To further fortify your relationship, she suggested sharing details about your personal history with money, either from past relationships or from your upbringing, which may help your spouse better understand and appreciate your perspective. Perhaps your ex spent his way into bankruptcy court, or your parents worried incessantly about the bills, which played a role in forming your own emotions and behaviors toward money.
Keep in mind that you may not know what drives your saving and spending decisions. To identify and break unhealthy patterns, you may need to seek out a financial therapist or money coach. (Related: Do you and your partner need financial therapy?)
“Many times, the reason is baggage from the way they were raised,” said Price. “It’s not until we become adults and have our own money that our money patterns become active and observable.”
A professional, she said, can help you identify and establish healthy new financial behaviors. (Related: MassMutual can help)
Taboo #2: Talking money with your kids
Parents often talk about money behind closed doors. They fear their kids will hear too much, that they might share private information with their friends, or that household budget discussions will worry them unnecessarily.
Indeed, young children don’t need to be told that you’re struggling to pay your bills or know how much you earn, but they do need to hear healthy dialogue about your values concerning money.
On an age-appropriate basis, explain to them how you allocate your budget, why you save for retirement, and how you prioritize your financial goals. They’re already watching you, whether you realize it or not.
A 2014 study from North Carolina State University (NCSU) and the University of Texas found that children pay close attention to topics related to money, noting that parents must make an effort to help their kids develop healthy spending and savings habits.
“Children need financial acumen for their future well-being,” wrote Lynsey Romo, an assistant professor of communication at NCSU, in the abstract of the published research.2 “Parents play a critical role in teaching young children about money.”
While much of the research on parent-child communication concerning money is focused on parents of older children, the study found that children between the ages of eight and 17 form their own conceptions (and misconceptions) about the reasons behind their parents’ lack of disclosure surrounding money. (Related: Teaching money to kids by age group)
“Broadly speaking, we found that parents were most likely to talk with their kids about saving, spending, and earning,” said Romo. “The takeaway here is that even young kids are aware of financial issues, regardless of whether parents talk with them about money.”
Taboo #3: Aging parents and adult children rarely discuss dollars
Older generations, especially in some cultures, may be more likely to guard their financial information carefully, unwilling to divulge personal information to their adult children about their savings, debt obligations, or any estate planning they might have done.
A 2017 TIAA Family Money Matters Survey reveals both parents and adult children feel that talking about money is “very important,” but very few follow through.3 Roughly 11 percent of parents and 37 percent of adult children are initiating conversation.
There is also a disconnect in terms of when they think those conversations should take place.
About 25 percent of parents surveyed said they were happy to wait until their age or health becomes an issue before having financial conversations, and 20 percent said they were content to never have the discussion at all. By contrast, 25 percent of children surveyed said they should start those conversations well before their parents’ retirement.
Parents and adult children who do open up with each other about money matters overwhelmingly indicate that the discussions were not very detailed, perhaps because the vast majority said the conversations happened spontaneously, according to the survey. TIAA suggests that’s good reason to draft discussion points for future communication.
Adult children and their aging loved ones have much to gain from candor, said Bronson Kibler, a financial advisor with Arch Advisory Group in Atlanta, Georgia.
Parents need not disclose specifics about the value of their estate or whether they intend to leave their kids an inheritance, but they can assure their offspring that they have what they need to cover their living expenses. They can also use the discussion as an opportunity to get their estate planning documents in order, if they haven’t already, that will ensure that their wishes will be carried out when the time comes.
On the other end of the spectrum, parents who are less prepared financially for the costs associated with their senior years may also benefit from verbalizing their concern. While just 20 percent of parents said they believed their children were obligated to help them financially, roughly 75 percent of children said they would feel compelled to help their parents.
(Related: This Thanksgiving, talk estate planning)
If discussing money with your parents is too uncomfortable, Kibler said, you can still initiate dialogue by helping them find a qualified financial professional, tax advisor, or estate planning attorney who can help them get their financial house in order.
“You should always be respectful of their privacy,” he said. “Tell your parents that they can choose any advisor that they trust, but that you would just like to know that they’re taken care of and that they’ve had those important conversations.”
Families who talk about money may be more likely to foster healthy relationships, raise children with better saving and spending habits, and achieve their goal of attaining financial security. If you haven’t opened up with your loved ones lately, it may be time for a family meeting.
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1 National Endowment for Financial Education, “Two in Five Americans Confess to Financial Infidelity Against Their Partner,” Feb. 11, 2016.
2 North Carolina State University, University of Texas, “Money Matters: Children’s Perceptions of Parent-Child Financial Disclosure,” April 25, 2014.
3 TIAA, “Family Money Matters Survey,” March 1, 2017.