It’s taboo. This is not polite. It’s personal. These are all things you’ve probably heard when it comes to talking about money. Keeping your lips shut about your personal finances is all too common, but your financial future could be in jeopardy if you’re not willing to talk openly about financial planning.
Unsurprisingly, only 9% of baby boomers often discuss finances with the people closest to them, according to Across America. And a reconnaissance A Wells Fargo study found that 44% of Americans view personal finance as the most difficult topic to discuss with others, more so than topics like death, politics, and religion.
However, avoiding open talk about your financial situation may hurt your prospects for a secure and happy future.
Here are 10 reasons why talking about money is helpful and tips for starting conversations:
1. Talking openly with friends and family boosts your (and their) success.
Peer pressure doesn’t end in middle school. We feel pressure as parents, in the workplace, and sometimes even about when to retire or what to do when you retire.
However, peer pressure is not always bad. Peer pressure can also encourage us to adopt better habits and make better decisions.
- Studies have shown that people who have friends with high financial intelligence become more financially intelligent themselves.
- Just as you’re more likely to exercise if your peer group does, you’re more likely to save for a secure retirement if your friends are saving too.
Personal finance is a big deal. By talking about this with friends and family, you help yourself and your loved ones by bringing the topic to the forefront. Financial and retirement planning is often done in secret or not done at all. However, having direct conversations about it can help make the issue more salient.
Talking about retirement can enable us to find new ideas for financial success and ultimately be more prepared.
2. You will avoid and solve problems
Common Cents Laboratory said American Scientific“In our interviews, we often encountered individuals who had accumulated crippling debt, were missing out on savings opportunities, or were unaware of basic financial strategies that would improve their well-being – often because they were embarrassed to seek advice from their friends and family about money.”
Talking to people about your financial situation can help solve your financial problems.
3. Conversations about money can reduce stress
Think about what you do when you encounter a problem that is difficult to solve. You’ll likely turn to your colleagues, friends, or family to talk. These diversions can elicit empathy, understanding, and a good solution, always sparking a more optimistic outlook.
Conversations about money can do the same thing. You will likely find that you are not alone in your concerns and may find ideas to help solve your problems.
4. Talking about money leads to valuable insights and advice
When it comes to other areas of your life — work, relationships, lifestyle choices — your friends and family may be the first people you turn to for advice and comfort. Why should financial advice be so different? If you’re not communicating with people you know about retirement finances, you’re probably missing out on some important advice.
People you know may or may not have all the answers, but just talking about things can sometimes bring clarity and a new perspective to your plans.
5. You are more likely to follow through with your plans
When you tell your friends and family about your financial goals, you increase your odds of success. You add a layer of accountability to your plans.
A He studies It showed a significant 3.7-fold increase in the number of deposits made by people who had the option to publicly declare their savings goal, which was then monitored at weekly meetings.
When you commit to a goal and feel accountable to someone, it becomes easier to follow through.
6. Communicating with your spouse is a good idea
Money is the number one reason for divorce. Maybe it’s because the couple doesn’t talk to each other. Poll by Fidelity Investments It found that only 38% of couples discuss financial strategies for retirement.
Involving a spouse or partner in financial decisions can be a key financial health strategy. Research has found that shared decision makers are less susceptible to behavioral biases, leading to better outcomes.
Discover 8 financial conversations you can have with your spouse.
7. Talking about money with your colleagues can help you increase your income
It may be uncomfortable and taboo in the office, but having frank discussions with your colleagues can help you increase your income. It is important for you to understand your salary compared to others in your field. And talking about money and income, even if you avoid hard numbers, can help you make a strong case for getting a higher wage or looking for a different job.
8. Discussing finances with your children can help them do better
Our attitudes toward money develop over our lives and are informed first and foremost by the examples of our parents. Talking to your children about your financial strengths and weaknesses can set them up to do better in the future.
Researchers have found that people from households that talk publicly about finances were less likely to have problems with impulsive spending and had significantly less credit card debt.
9. Talking to children about your possessions (or lack thereof) is important
Although opinions vary, most financial experts recommend that parents be open with their adult children about their inheritance expectations. It’s also important to be honest if you anticipate that you will need financial assistance as you age.
Learn more about transferring financial values and get tips for discussing finances with family.
10. You may be surprised by what you learn by talking to your elderly parents
It’s important to understand your parents’ financial situation, especially if you’re thinking about helping them in some way. The sooner you have the conversation, the more options you can explore to help.
According to Pew Research Center research, about a quarter of adults between the ages of 45 and 64 care for an older adult. Of the people who help, about 58% provide help with errands, 28% provide financial assistance, and 14% provide personal care.
Open talk about retirement doesn’t need to be awkward
As teenagers, we may have been embarrassed to talk about personal matters, but we actually talked and learned that everyone has similar problems.
In the Middle Ages, we may have felt embarrassed to discuss issues such as lack of progress at work or problems with our children. But if you talk, you’ll find that everyone faced the same kinds of dilemmas.
As we approach retirement, we may worry that we’re the only ones who haven’t saved enough, known how to build retirement income, or when to start Social Security. However, you are unlikely to be alone.
Study after study shows that only a handful of people are actually ready for retirement. The rest of us are trying to figure it out. We can help each other find the right answers.
How to start conversations
Ask questions
What is the secret of being a good communicator? Ask questions and listen to the answers.
You don’t have to share a lot about your financial situation to have good money conversations. Try one of these ice crushers:
- What’s the worst financial mistake you’ve ever made?
- What did you learn from your parents about money?
- Do you have financial goals?
- Where do you get help making financial decisions?
Understand why you don’t want to talk about money
Maybe you feel embarrassed because you have too much or too little money. Maybe you’re afraid of looking stupid. Once you understand why you’re avoiding talking about personal finance, you can address what’s holding you back.
Join Bouldin’s Facebook group
The Boldin Facebook group is a moderated space where people discuss financial matters. It’s a supportive place to get answers, learn and practice talking about money.
Build and maintain your own financial plan
You may feel more comfortable talking about money if you truly have control over your personal financial situation. The Boldin Retirement Planner can help you evaluate your particular situation and give you a comprehensive understanding of all the components of retirement and financial planning. Retirement planning is much more than just investing.
Take a course in financial planning
Do you want the ultimate confidence boost? Take a Retirement planning class! Boldin offers two different courses: an 8-week Introduction to Planning course and a Dive Deeper course with 16 different topics. Classes are led via zoom (or you can always watch recordings). There are live Q&A sessions so you can learn from your peers.
Try starting a retirement club
Maybe you’re not alone in wanting to start financial conversations. Why not try starting a retirement or financial planning club? It’s like a book club, but focused on personal finance.
Get Retirement Club tips here.
Source link
