The Money Conversation: Is Talking Turkey Taboo?

I consider myself fortunate to have wonderful relationships in my life. I have a loving wife and two amazing children. Relatives and in-laws who support me. And a close circle of friends who've I've been fortunate to maintain through many phases of life. As is the case with most relationships, you share information with those in your life to the level with which you're comfortable. For those closest in your life, you hopefully share more about yourself than you would with a casual acquaintance. However, you may have some taboo topics. The old adage says avoid religion and politics, but what about personal finance? Is it ever okay to ask someone their salary? How much they pay for car insurance? How much they've saved for retirement? I am all for respecting boundaries and personal finance is just that – personal. But with something so important, in the context of those most important to you, should this be off-limits? Why are conversations about money so taboo? This week, I’m going to challenge you to consider having the personal finance conversation with your loved ones – with some considerations before you get uninvited from Thanksgiving or game night!

Putting a hand on a friend's shoulder shows you care. On a stranger? Danger!

Mutually Beneficial Test

Before you dive in, my first consideration is whether having this conversation could be beneficial to both you and the other person. For example, I have some friends who are in similar positions as I am (married, kids, homeowners, good careers, etc.) where we are going through the same experiences financially. Do we refinance our homes? Contribute to a 529? Buy a new or used car? In this case, it can be incredibly helpful to have a conversation using some actual numbers with your friends. It can help both of you to think through some decisions and get some perspective if you ever face the same situation. I recently had a great conversation with my friend who was looking at homes. His thought process got me thinking about my own circumstances, and he sent me some of the homes to review. I hopefully gave him some considerations, but looking at these homes sparked my thought process regarding improvements I should make in my own home.

How detailed do you get? If you’re close enough to the person, you could ask. But, keep in mind, it’s only fair your share your circumstances too. For example, my best friend and I went to college together, and as we neared graduation, we were interviewing for entry-level jobs. If we were fortunate enough to get an offer, we agreed to compare salaries and benefits to see what the market looked like. Keep in mind – this was before YouTube, it was still called The Facebook, and Amazon was more commonly known as a river. Today, you can get a lot of this data through career sites, but it still wouldn’t hurt to get direct data from someone in similar situation.

Will It Impact Me?

Another thought would be if the financial situation of the other person could impact you somehow. Most likely this would be the case of a family member, specifically a parent or child. Similar to the “mutually beneficial” situation above, you should be prepared to share any information in kind.

The best example I can think of would be helping a “bird leave the nest” scenario. As a parent, you want to make sure your child is financially stable (and off your books!). If you read my series on teaching children about money, I advocate for teaching children about personal finance as much as practical. However, when it gets real, and your child has rent to pay, the stakes are much higher. Will your child need to move back in? If this is a realistic scenario, a conversation about your child’s financial circumstances is warranted.

The opposite situation can apply as well, where a parent is trying to sustain an independent lifestyle off retirement savings. As a child, will you need to support your parent financially, or have a spare bedroom in case they need to move in for financial or health reasons? It’s fair to understand – at least at a high level – if your parent(s) may need assistance.

Finally, as I discussed in my money and marriage series, you definitely need to know your partner’s financial circumstances. For a strong relationship, having transparency in both of your situations will help build trust and perhaps solve some outstanding concerns. Strength in numbers!

Who’s In Your Corner?

While this may be the most subjective reason, it can be important to many of us. Money can be a major stressor – or motivator – in our lives. If you pay off your student loans, or get a raise at work, you want to be happy! Conversely, if you find yourself struggling to make ends meet or lose your job, you need the love and support of those in your life. So, if neither of the circumstances above resonate with you, consider the emotional value of sharing personal finance information. This isn’t about who is willing to spot you some money. Who will encourage you to succeed and celebrate your victories?

And, it can serve as an indicator of who’s in your corner. Over a decade ago, before I met my amazing wife, I was dating someone else. I was working a job I didn’t like, but it was paying the bills. After a difficult year of unexpected hurdles, implementing solutions that saved the company significant costs and frequent after-hours work, I was given a sizable year-end bonus. This came as a complete shock. My first thought was to share this news with my girlfriend by taking her out to a nice restaurant. At dinner, I shared the cause for celebration – only to be met with a sad panda. She twisted this positive news into me rubbing my success in her face. She was employed, but was still looking for work in her industry. This was during the Great Recession, and it was not uncommon for people to be under-employed or working outside of their field. Trying to be a supportive boyfriend, I had previously offered her my help and support in her career journey.

While I certainly didn’t intend for this to be a slight against her, and could understand her frustration with her own circumstances, I was taken aback by her reaction. My getting a bonus was not taking money from her or depriving her of an opportunity. I genuinely hoped to enjoy an evening with someone who I thought would be proud of this accomplishment. Instead, I felt awful – and I became hesitant to share any good news with this ex out of fear of hurting her feelings. Thankfully, I moved on and met my wonderful wife. I feel blessed every day because I have someone who supports my successes, and I do the same for her.

So do you have someone in your life who you can (or should) discuss finances? Be open, honest, and understanding. Trust that those in your life want you to succeed, as you should do for them. Surround yourself with great people, and you can accomplish great things.