Is Discussing Money with Family and Friends as Taboo as Talking Politics and Religion?
October 8, 2019
Written by Evan Judge, Partner, CFA, CFP® and Trevor Moore, Senior Client Associate
Money. It’s how we buy groceries, pay for electricity, and save for retirement. There are thousands of books, TV shows, and movies all about money. It’s an essential part of our everyday lives, yet as soon as you bring it up during your Fourth of July BBQ, the room goes silent. Then all your friends and family are staring at you, wondering why you would say such a thing. You look around and find yourself asking, ‘What, is there something in my teeth?’.
Politics and religion have always been the taboo topics when it came to discussions with family and friends; has money now been added to that list? Below are two different advisor’s perspectives on what they have experienced and how they believe the culture needs to shift.
“My Parents, Grandparents, and Children…They Have More in Common Than They Think” – Trevor Moore
Over the past year or so, I’ve taken notice of a handful of conversations between various members of my family, on the topic of personal finance. Some of them were directed toward me while others were observed at various family functions. A few were about specific topics while others were more general in nature. I noticed conversations between recently retired folks, experienced retirees, and some couples with kids between one and nine years old. The level of detail provided by most was not surprising to me, though there were a couple who left no unanswered questions about their finances. There was one common theme with all the questions, stories, and ‘what if’ scenarios I observed – security.
What it means to be financially secure is different to all of us, and there is no single ‘right’ answer to get us there. Security is defined as ‘the quality or state of being secure’,so to have financial security would mean that you are in a state of being secure with your finances. If that’s the case and everyone wants to be financially secure, then why aren’t we talking about it more? Chances are if you know someone in the financial industry, they’ve been asked the question, ‘What should I be investing in these days?’. This is a great question and there’s nothing wrong with asking it…not until it comes from a family member, that is. From my observations, this question was treated like small talk rather than a serious attempt to better plan for someone’s financial future. Once I took a few minutes to reflect on the conversations, I realized it was because discussing money with family makes people uncomfortable and, when the topic comes up, most will choose to avoid it.
My son is almost two years old and really has me thinking about his financial future, and not because he has a habit of breaking expensive things. It’s because I want him to understand how finances work, and for him to feel comfortable talking about money later in life. He has no concept of money yet, but my wife and I feel that starting at a young age will set him up for success. We have discussed a few strategies on how we might manage his education over time. Like most kids I knew growing up, if I wanted to have money to spend on baseball cards or candy from the ice cream man, I had to work for it. I had a list of chores and, if I did all of them for the entire week, my parents would give me $5. This helped teach me the benefits of earning money, then being able to spend or save it. I’m hopeful we can implement a similar strategy, as the long-term benefits of something so simple can really make a difference. As is the case with financial security, there are
endless ways to achieve our education goals, but as long as we start somewhere, it’s possible that money won’t be so taboo anymore.
“I entered this industry to help people reach their financial goals. Why can’t we talk about them?” – Evan Judge
Looking back to when I first decided to go into this industry, I was excited. I was excited to not only do something for a living that I was personally interested in, but I was also excited to learn “what to do and how to do it”. I was excited to become a resource not only for my clients, but also for friends and family if/when I was needed.
Full disclosure, I am not the friend to call if you need help installing a bathroom vanity, assistance with your golf swing, or determining what wine goes best with salmon. Those are examples of situations where I would not prove much help whatsoever. However, I can be useful in other areas, specifically personal finance. Who’s got two thumbs and can walk you through the difference between a traditional IRA and Roth IRA? THIS guy!
The problem is, rarely do friends or family seek my assistance, experience, or knowledge in this arena. I have heard everything else, whether it be personal medical issues, family and relationship problems, or tragedies. However, rarely do my conversations segue into personal finances. Why is this? Is it pride? I think that definitely plays a role. Many people in my age bracket are reluctant to divulge income and wealth levels as that may be perceived as their level of “worth” or consciously/subconsciously treat it as a form of competitiveness. There are many variables and it varies by person, but it is real.
Discussing personal finances is taboo, but it shouldn’t be; it is too important. I encourage everyone to drop the pride and seek guidance* to ensure your financial trajectory is pointed in the right direction.
*If any friends or family read this, call me. I am happy to help and promise not to call you to help install a bathroom vanity.
How do we change the perspective?
After taking a look at both situations, it is obvious that discussing money with family and friends has become taboo. However, this is a cultural norm we seek to change. Ultimately, people want to feel secure with their financial situation, have a fulfilled and prosperous life, and provide for generations. In order to do this, you need to evaluate your goals and create a plan to reach them.
We can help you do that. Let’s break the cycle and get the conversation started.
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