Discussing financial goals with your family can be hard. Whether it’s your spouse, parents or kids, it can sometimes be difficult to find the right approach. To openly communicate about money in a positive and productive way, here are some tips to help break the ice and make financial discussions second nature.
Talking Money with Your Parents
Talking to your aging parents about money can be very awkward. For most of your life, they are the ones you turned to for advice about life. But as they get older, they may not have the ability to manage their money as well as they did when they were younger. It’s important to make sure there’s a plan in place to keep them comfortable in their golden years. Here are some tips for discussing money with your parents:
Ease Into the Conversation
Your parents’ financial future may not be something they’ve considered discussing with you, so you need to approach it gently and allow them some time to digest it. Show your parents you care by acknowledging that it’s difficult for them to talk about, but you want to make sure they’re taken care of when they retire. Then ask to discuss the financial plans at a later date.
Be Specific About Your Concerns
When you sit down with your parents, be caring, but specific about your concerns. For example, if you don’t think they have enough money saved to retire, express your concern and ask permission to help. For example, say, “I’m worried that you haven’t built up a big enough of a nest egg for your retirement. I would like to help you make sure you have the funds you need. What do you think?” It’s also a good idea to be organized and prepared. Gather the financial information needed to support your words. If you show you’ve put some real thought into your concern, your parents will be much more likely to understand why you want to talk about their finances.
Keep the Conversations Brief
It’s a good idea to keep the conversation short. You will have many questions for your parents about their finances, but you don’t need to ask them all at once. Give them time to process your concerns and request. If they want your help, it will be easier to discuss details later.
Talking Money with Your Children
You should start talking to your kids about money when they are young. Teaching them the value of money early on will help them learn how to save wisely, understand how to make better spending choices in life and allow them to learn about the consequences of overspending. Here are some tips for discussing money with your children:
Don’t hide your financial failures or lie about the family’s financial situation when money gets tight. Kids can handle the truth and will learn to appreciate openness.
Don’t Get Too Technical
When you discuss finances with kids, talk about values, instead of giving the figures. You want them to understand the concepts of saving, budgeting and paying the debt without bogging them down with dollar amounts.
Let Them Participate
A good way to discuss money with your children is to let them sit in on family budget meetings. Show your kids the bills you have to pay each month and talk about how you could work together for a month to cut back on the costs. Allow them to make suggestions, but make it clear that as the parent, you have the final say. When you pay off a debt, celebrate it with your kids.
Play Money Games
Board games like “Monopoly” can help your kids learn money terms and financial jargon. You can also help them better grasp concepts of saving and budgeting by letting them download an app. Your kids will also learn about risks associated with impulse purchases and the concepts of charitable giving and investing. The app lets kids play to earn or lose imaginary money based on their financial decisions.
Remember to always offer praise and encouragement to your kids when they do save money!
Talking Money with Your Partner
The key to financial success in any relationship is being able to discuss matters with your significant other. If you are afraid to talk money or that conversation hasn’t gone well in the past, you may need to find the right approach to get on the same page. Here are some tips for discussing money with your partner.
Make a Money Date
Talking about money can be delicate, especially with your partner, so it’s a good idea to set a time for discussing finances. Make it more comfortable by making a date to go out to a diner, café, or other low key places that have Wi-Fi. That way you can bring your laptop and go over key issues such as spending, savings, budgeting, and retirement.
Focus on Goals
A financial talk is all about achieving goals. So, start by asking your partner what he or she wants to achieve in the present and the future. You should also let your partner know what specific goals you want to accomplish, like paying off debt, buying a house or making a savings plan for retirement.
Be Fair and Listen
When you discuss finances for the first time, chances are good that you’ll have different experiences with money and different approaches on how to manage it. Make sure you listen to what he or she says. If your partner mentions something you don’t like, don’t get angry. Instead, discuss how to make things better. It’s okay to disagree on something, but remember that you care for the person in front of you. Talk out your differences calmly and find a reasonable compromise. For your budget to work, you must be on the same page with your partner.
Talk About Ways to Achieve Your Goals
After you’ve discussed your goals, find the ones you have in common and spend some time figuring out how you can achieve them. You and your partner may have different visions for how to do that, so be willing to make some sort of sacrifice to reach the goals together.
Routinely Discuss Finances
To stay on the same page and keep on top of your goals, have financial discussions with your partner routinely. Make a date every month to review the budget and make sure everything is on track. Having that initial conversation can be hard, but once you break the ice, the follow-ups should be easier. You and your partner will know what to expect and will feel more comfortable having a conversation about money.