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One of the most important yet often overlooked techniques on the path to success in personal finance is to simply talk about it.


But as we all know, talking about money can be a somewhat taboo topic. For many of us, money is an extremely personal subject, something that we believe should be private and kept under wraps. While it is certainly true that some aspects of finance should be kept personal (who would want to go out to dinner with someone that constantly talked about how much money they made), we also believe that appropriate discussions about money – whether with family members or with professionals - can be powerful and even liberating.


“Talking about money is something that doesn’t come naturally to a lot of people.  I am not sure exactly why, but many people feel awkward or even embarrassed to ask questions or share experiences around the topic of money.  

Almost as if they have self-imposed expectations that they should somehow already know about money.  But no one among us was born with knowledge of personal finance.  Like any other skill, it has to be learned.  Talking about things is a great way to learn,” says Marc Horner, founder of Fairhaven Wealth.


It is important to realize that all members of your family can benefit from an open conversation about money, especially younger children.  “Kids are naturally curious and it’s not just about school or video games.  Their curiosity flows into money topics, and it’s never too early to feed that curiosity by talking,” says Marc. “Opportunities are all around us to start those conversations.  When out to eat, let the kids calculate the tip and help them determine what amount of tip the server earned.  It’s a great way to help them understand there is compensation associated with value provided and that value differs.  Birthday money is a great opportunity to talk about the difference between spending and saving.  Maybe you propose a $0.50 match for every dollar saved in their savings account versus spent at the 7-11.  Teaching them early about choices between spending now and saving later might be one of the most powerful lessons you teach your kids about personal finance.”


Here are a few suggestions for more successful family communications about money:


1. Keep it Brief

Kids are kids whether they are 5 or 25.  Sometimes it can be difficult for them to acknowledge that they can still learn something from their parents.  No lectures.


2. Give to Get

Not having all the answers is OK.  In fact, sharing that you don’t have all the answers can be a great way to bring others into a conversation.  Maybe your parents didn’t talk much about money (they certainly wouldn’t have been alone!) and maybe you had to learn by making mistakes (you certainly wouldn’t be alone!).  Consider starting a conversation by sharing some of the details of one of those mistakes and that you would like to help your kids avoid the same trap.


3. Avoid Absolutes

Words or phrases like “always, never, or all” can cut off conversations.  Give people space for an opinion, leave room for dialogue, allow for benefit of the doubt and recognize that your point of view may not always be accurate (more difficult said than done for many of us) and that sometimes circumstances change.


4. Stay Patient

News flash – kids are not perfect and they make mistakes.  Do your best to limit your frustration when your kids are slow to follow or don’t follow your advice.

If you demonstrate an ability to hear bad news without being judgmental, your child may be more inclined to share information with you before the negatives multiply.  A candid relationship combined with experiencing missteps on their own might actually help your kids more quickly see the wisdom of Mom and Dad’s counsel.

5. Be Specific…When Asked

As you and your kids talk more about various money topics, their natural curiosity is likely to kick-in.  When it does, be prepared to share with them how you make financial planning decisions.  Topics such as saving for your first car or house, saving enough in your 401k plan at work to make sure you receive the company match or structuring your portfolio with both domestic and international exposure (aka: asset allocation and diversification) will all help them understand the need to be strategic in their decisions and make choices appropriate to their own circumstances.

It Matters

Building trust and confidence takes time and it takes interaction.  In a recent survey, only 22% of young adults (age 25 to 35) said their parents were their most trusted source of financial advice, and one-third said they don’t trust anyone on money matters.  Financial conversations aren’t always easy, but with openness and honesty, they can be made easier.  Go ahead and start talking.



by Dave Wilson

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