Having the money talk is important to relationships, whether with your children, your parents, your spouse or anyone else dear to you. Is Junior maxing out his credit cards? Is your aging dad not keeping track of his bills? It’s in no one’s interest to let the problem roll on, unsolved. Diane Bourdo, president of the Humphreys Group in San Francisco, has four ideas on how to handle this crucial conversation:
Larry Light: So this interchange must be in person, right?
Diane Bourdo: In today’s digitally driven world, many aspects of our daily lives are easier than ever. We get answers to questions in minutes—sometimes, even seconds—with the click of a button. Friends and family can stay up to date on important news, or something as simple as your morning latte order, by quickly scrolling through Instagram, Facebook or Twitter.
And yet, with all of these advancements and countless channels at our fingertips, many of us still struggle to communicate with each other. We’re talking about real, personal communication—not text messages or emails sent through your smartphone.
Communication can be made even more difficult when the topic at hand is anxiety-inducing or uncomfortable. Especially if it’s about money. In its 2017 Money Matters report, which surveyed 3,000 Americans ages 18 to 44, investing app Acorns revealed that 72% of respondents would rather talk about their weight than how much they had in savings.
But the truth is, talking about money doesn’t have to be scary. In fact, when broached appropriately, money conversations can actually bring positive, life-changing results—an enjoyable retirement and a secure future for your children, to name a few. Whether it’s with your spouse, parents or children, I have four tips to help ensure your money conversations are healthy and productive.
Light: What’s the first tip?
Bourdo: Think ahead about what you are going to say. Proactivity is great, but it’s important to take some time to plan your approach to starting the conversation, especially if the topic is sensitive to your audience—for instance, discussing long-term care with an aging parent. Pause for a moment, be calm and think about the effects of what you’ll be presenting to the other party, including potential assumptions or perceptions. Being thoughtful about the preparation process will allow you to have more meaningful, productive dialogue.
Light: And the second tip?
Bourdo: Don’t blindside the other party. Once you’ve thought through your approach and prepared appropriately, set a date and location for your conversation. Choose a time when you both will be more relaxed and comfortable.
For instance, choosing to discuss finances with your spouse after a long day of work may fuel existing stress or exhaustion, which will likely derail your discussion. It also may be helpful to agree on the length of your conversation—some people are tired by long conversations, while others prefer to walk while talking about tough topics.
Light: And the third tip is about how to begin the talk with the other person?
Bourdo: Yes. Show you are honest about your intentions. When starting your money conversation, you should avoid catching the other person off-guard—but you also don’t want them to become defensive. State your intentions and explain why the conversation is important to you. Consider structuring your introduction like this:
“I feel like the way we’re handling our credit cards is creating tension between us. I would like for us to work together to find some agreement so we can deal with this issue as a team. I have an idea for a new approach that could help, and I’d like for us to really listen to each other.”
Light: The fourth tip concerns how to structure and get ready for the big talk, correct?
Bourdo: That’s right. Prepare and practice. If there are multiple money issues you need to discuss with your audience, don’t panic. Start small by broaching easier topics first, and then work up to bigger issues over time. It may help you to write down what you want to say and practice the conversation aloud to yourself or with a friend.
Light: And I suspect that this all is worthwhile, no matter how uncomfortable it makes you feel.
Bourdo: Put simply, communication, on any topic and in any form, can be hard—even when it’s with the people you trust and care about most. But if you prepare and approach the conversation in a respectful way, you can surmount money challenges and come out the other side with renewed perspective and confidence.