Love and Money

It’s February, time for the column about how to talk to your special someone(s) about money. That “s” is intentional, because we need to expand our financial conversations from our partner/spouse to all of our loved ones: the romantic ones, the kids and the parents.

Talking to a spouse/partner:

You know that stress about money causes a lot of relationship issues. The conflicts usually occur because each of you arrived into adulthood with a different relationship with money. When I conducted research for my book, The Dumb Things Smart People Do with Their Money, I found that your family of origin shapes these feelings and habits, for the good and the bad. Keep that in mind as you talk to your partner about money and know that he or she may come from a dissimilar circumstance and also may be hardwired differently about finances.

According to psychotherapist Benjamin Seaman, before you start any dialogue about money, “you need to check yourself. Ask whether this conversation will bring you together or not.” If you are using it as an excuse to launch an interrogation, stop in your tracks because that is not going to serve anyone well.

Once you have shifted from adversarial to collaborative, set aside a specific time and place to talk and share information about concrete issues, like any “secret” or separate accounts (including outstanding debt), and also review financial priorities, like retirement, college planning and cash flow management.

Talking to kids:

In my book, I noted, “How you behave around money with your kids matters,” because you run the risk of saddling your kids with your own money issues.” And the conversations have to start early, because according to research from Cambridge University, money habits start to form by age 7. To help educate your kids, be careful to strike a balance between educating them so they can take responsibility for money but not overdoing it and conveying too much of a focus on money. The Consumer Financial Protection Bureau’s (CFPB) Money as You Grow guide is great resource for parents to talk about money at each stage of your kids’ lives.

Talking to aging parents:

This is a tough one, because it requires that you balance being a responsible adult child without prying. Ideally, this is an ongoing conversation that begins when your folks are considering retirement and while they are still healthy. Seaman suggests breaking the ice by saying something like, “This is such a hard topic and it really scares me, which is why I have avoided it. But I want to make sure we are on the same page when it comes to your wishes.”

If your parents are receptive, ask whether or not they feel financially secure and try to find out if they have up to date estate documents (reviewed within the past three years). If they voice concern, or you sense anxiety, suggest that they consult an impartial financial professional, like a Certified Financial Planner, or a CPA. Planning can help integrate the family game plan and allow for plenty of time for siblings to get on the same page with future responsibilities.

If your parents completely shut down when you introduce the topic, don’t fight it. Now that the door is open, you can revisit it when a good opportunity arises, perhaps at tax time (“How did the new tax law impact your tax filing?”), year-end (“Are you happy with how your money did last year?”), or when you are experiencing a financial transition in your own life (“I just want to get an estate attorney—I’m so relieved to have finally crossed that off my to-do list!”)