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Is Talking Finances Taboo?

Olivia Stacey, CFA
Sep 29, 2020

Talking About Your Finances

Society has socialized most of us to believe it’s inappropriate to talk about money. As someone whose job it is to discuss the financial affairs of others, I find this phenomenon fascinating. I wonder what makes talking about our personal finances so taboo? And who decided that it should be considered uncouth? But, for now, let's set aside the reasons why talking about money is frowned upon and explore some benefits of being more open and willing to talk about our financial circumstances.

There's so much to be learned by way of sharing information. Distribution of knowledge is good for all of us, which is why we’ve been doing it since the beginning of time. Thousands of years ago when the first homo-sapiens roamed the Earth, trying to survive, if one person spotted a saber-toothed tiger off in the distance they didn’t sit on that info. They brought it to the attention of the group so that they could all steer clear and live to die another day.

A willingness to discuss our financial circumstances, plans, and knowledge is really nothing more than sharing information. We already share so much with those we're close to (and, let's be honest, even strangers) so why should money be any different?

Starting at the Beginning

Sharing information is essential and begins in childhood when we learn how to approach the world from our direct caretakers. They teach us everything. From the basics like walking and talking, to the more nuanced bits of life. But so often they leave out the parts about making responsible financial decisions, investing, and how to navigate debt. These things are important to learn when trying to survive in our society. So why do older generations neglect to pass on financial acumen to younger generations? Perhaps they've bought into the idea that talking about money is something polite people just don’t do.

I propose we change that. Teaching your children, nieces, and little brothers responsible financial habits and how to navigate the complexities of money management should be on all of our to-do lists. If you have valuable knowledge regarding personal finance, share it. You'll help them make more informed decisions as they grow up and put them in a better position to thrive in adulthood.

The Teenage Years can be Hard

I think we both know you have more to offer your dependents than teaching them how to get a credit card and pay it off on time. They could benefit from hearing about your failed business ventures, how you worked through college to keep student debt to a minimum, and how if you'd begun saving for retirement right away you'd have much more than you do now. You have invaluable knowledge to share and they probably won't get it anywhere else.

Perhaps you're reading this and patting yourself on the back because you believe you've done an exemplary job of teaching the younger people around you how to lead responsible financial lives. Good for you. I must ask, though, if you've sat them down and had the more difficult conversations surrounding money. The ones that involve them suddenly inheriting a large sum of money upon your early departure, or what kind of care you're willing to let them provide in the event that you haven't saved enough to take care of yourself.

The idea of having these kinds of conversations feels more uncomfortable, I agree. But what's the alternative? Not having difficult discussions leaves room for error at best, and resentment at worst. It's just money we're talking about, after all. At the end of the day isn't the peace of mind brought by knowing our loved ones have all the information they need to feel prepared better than not talking about the hard things?

Continuing as an Adult

Maybe you’ve hopped on my train to Teaching the Next Generation, but you’re hesitant about riding all the way to Discussing with your Peers and Friends.

Let me tell you a quick story. When I turned 26 years old and got kicked off my parents’ insurance, I needed to find a new dentist, one that was in my network. I’d been going to the same dentist for 26 years at that point and had some horrid dental tales under my belt due to my subpar genetics. I was attached to my dentist, in a vulnerable position, and didn’t know where to begin looking for another. I expressed my concern about switching to a less than satisfactory dentist to my mom, “ask your coworkers who they see,” she responded with nonchalance. Brilliant! Why didn’t I think of that? My coworkers are decent people (mostly), I trust their opinions (usually), and they have the same options I have, so they must have some good intel.

I had a problem and the people that I work with every day were able to help me solve it. I find that usually when you’re in such a situation, those that have the power to help are happy to do so. Why should matters of money be any different?

Now, please don’t misunderstand my point. You don’t want to take advice from anyone, and you shouldn’t be handing out advice on subjects you’re not qualified to opine on. Some things are best left to the professionals. So, while your cousin Bill may assure you that he knows about the best stock ideas on the market, it’s important to remember that Bill is a pediatrician, not a financial analyst.

When it comes to professional references, word of mouth is one of the best methods. If you're looking for a professional to help you manage your money, chances are that someone you know (and trust) has already hired an advisor that they're happy with. If you asked, I bet they'd be willing to refer you. On the flip side, if you've got an advisor you love and your neighbor mentions she's looking for someone at the block BBQ, you could tell her why you chose to hire who you did. This is what sharing information looks like in adulthood, and it's just as important as childhood.

We have a natural tendency to want to teach and look out for the ones we love and matters of money shouldn't be any different. Talking about money may feel awkward at times, but finances are an important part of life. If you have the chance to share some information that could make someone's life easier, why wouldn't you?

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Olivia Stacey, CFA is an Investment Advisor at Exchange Capital Managementa fee-only, fiduciary financial planning firm. She also writes with our Investment Team: The West Wing. The opinions expressed in this article are her own.

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