Finance and Family – Why so taboo?
Although it is a something that is used every day by people across the country, money remains a controversial topic among American families. It is often even considered “inappropriate” to discuss finances in mixed company. There are plenty of reasons people don’t talk about money –
“I don’t want him knowing my business. Who knows who else he’ll tell?!”
“If they know how much money we have they’ll use it to take advantage of us.”
“I don’t want her feeling sorry for me once she finds out how much I make.”
“My parents said it’s tacky to discuss money in front of others!”
The list could go on of course. While money talk has a way of halting conversations in their tracks, that is precisely WHY you should work to change the way it is approached within your own family. It carries such emotional weight for people because it is important, and important things deserve to be acknowledged.
A recent survey* found that 48% of families don’t have emergency savings, 50% are not saving regularly for retirement, 54% don’t have life insurance and 74% do not have current Wills in place. These results, to me, are astonishing. There can always be circumstances that preclude these items from being prioritized such as not making enough money or being responsible for supporting multiple family members, but there are also plenty of times when the actions aren’t in place simply because the conversation is not happening. People often avoid topics in which they are not well versed or confident. Because there is a frustrating lack of financial education in this country, many people are raised without the skills and knowledge they need to be financially successful. By simply starting the conversation in your own home, you can break that cycle and put yourself on a path to a lifestyle that empowers you, brings you joy, and lets you sleep peacefully at night.
If you are unsure how to start the conversation, don’t worry – you are not alone. Below are a few questions to get you started:
What makes you happy?
What do you want your life to look like 10 years from now?
Are you prepared if an unexpected expense comes up like a major car or home repair?
Money is not the be all and end all of life but it does represent a significant and powerful tool that can help you build the life you’ve always wanted. Most dreams take money and a plan if they are to be achieved. The best plans often begin with a great conversation between you and a trusted friend or family member. By simply starting the discussion, you can start to flesh out what is important to you and what you want your life to look like. Once you know that, you can be free to discuss your own desires with those you love. Perhaps your open approach to the conversation will inspire them to be open as well.
Let me leave you with one last startling statistic: 70% of wealthy families lose their wealth by the second generation and 90% of them have squandered it by the third. After nearly 10 years in this business, I can tell you that what happens between a parent and child when money is inherited often comes down to the conversations they have before the transfer is made. If you cannot be honest with yourself about what you want and the legacy you want to leave, then your family will have no way of carrying it out for you either.
It is never too late to start the conversation. It also is never too early. Start talking TODAY!
*Employee Benefit Research Institute Survey, 6/30/17.