I hope you enjoy this post about how important it is to keep the conversation going about money. It was written by Eleanor Blayney, of Directions for Women, a great resource about money for women and their advisors. Check it out; there’s great stuff there! I’m proud to know Eleanor and happy to be a member of this terrific group. I had the pleasure of joining them for a retreat this past June, where we explored the concept of Money Circles. I’ll share about that another time, but in the meantime, heeeeeere’s Eleanor:
Join the conversation! As long as the topic is the presidential race or who’s dancing with what star, everyone has something to say. But when the subject is money, not so much.
$$$………<<sound of crickets>>………$$$
Americans’ hesitance to talk about money, given our national wealth and preoccupation with financial status, seems odd to foreigners, most notably the Chinese. In that country, it’s perfectly acceptable to ask someone about their salary as a way of getting to know them better. But in Chinese tourist guides to the US, travellers are warned it is rude talk to an American about his or her finances.
Yet our silence can cost us. It can cost us our own financial security, our trust in others, even our marriages or intimate relationships. Of the 65 percent of American adults who at some time combined their finances with another, a third of these couples have lied about or failed to disclose key financial facts, according to a study conducted by the National Endowment for Education. For nearly half of those couples, the deception caused an argument, while for 18 percent of them, the marriage or partnership did not survive.
So when is it not just appropriate, but necessary, to speak up to a partner or family member about money?
The conversation should begin at some point in the dating phase. When a romance is still tentative, however, it’s probably better to stick to sweet nothings than to start swapping credit card balances. But at the very least, each partner should pay attention to how the other spends money and handles money transactions. Is he a stingy tipper? Is she an impulse shopper? These can be signs of money immaturity that warrant further investigation as the relationship goes forward. But once there is reason to think that the romance has legs into the future, the money talks should begin in earnest. Start by comparing the role that money played in each partner’s upbringing, and move on to financial hopes and expectations for the future.
A deeper dive into what each person owns and owes, earns and spends, wants and needs, should certainly precede any plans for living together or marriage. Discussing household money and investments and how these will be handled may be even more important than knowing how to deal with the in-laws. They, hopefully, will be only occasional visitors, whereas money matters will be getting up with you each morning, and sitting down with you each night.
What about pre-nups? Does it make sense to talk about the end of a marriage in terms of a financial settlement before the marriage even begins? Many people argue that pre-nups invalidate the sacredness of marriage by making money more important than love. Others argue just the opposite: pre-nups can strengthen the love in a marriage by eliminating the possibility that one partner is marrying the other for the money. Whatever the perspective, one thing seems clear. It’s important for a couple to at least talk about the issues that a pre-nuptial agreement addresses –what’s his, what’s hers, what’s theirs — whether or not they decide to draw one up.
Too often, couples stop talking about money once the relationship becomes established. Life gets busy and togetherness is sacrificed for efficiency. One person usually takes over the finances, leaving the other to take up the slack elsewhere. Money doesn’t get discussed until it’s a problem, and the conversations turn quickly emotional and stressful. It’s a good idea to schedule routine family business meetings, whether or not there are big financial decisions to be made, just to check progress toward savings goals, debt and asset levels, the big bills coming up. Once kids arrive, get them involved, too, to help them appreciate the role money plays in the running of a household, and how it must be allocated between needs and wants.
Possibly the hardest conversations come at the end of life. No one wants to talk about death or infirmity, and the reluctance to bring up these topics usually means that the associated money issues get short shrift as well. Children of aging parents worry that Mom and Dad will think they are lining up for their inheritance if they inquire about the estate and how it will be settled. They worry, too, that a conversation about long-term care and medical costs will sound like they are ready to put their parents into a nursing home. The parents, for their part, may believe that sharing financial information with their children is tantamount to giving up their autonomy and independence.
These talks are difficult, but necessary. When end-of-life wishes and expectations are left unexpressed, it’s likely that they will not or cannot be honored. Families have been fractured by this silence, with everyone having his or her own version of what Mom and Dad wanted or intended. From not having talked in the past, it’s but a quick step to not speaking for months, even years to come.
It’s sometimes said that talk is cheap, but when it comes to money, just the opposite is true. Money talks can be enormously valuable in growing and protecting wealth within our relationships and family. The wisdom of the Chinese could serve us well: talking openly about money does not separate us, but helps us to better understand one another.
Read more from Eleanor Blayney, consumer advocate for the Certified Financial Planning board, and founder of Directions for Women at www.directionsforwomen.com. And check out her book about finding your financial confidence, Women’s Worth.