“Never talk about money at the dinner table,” they used to say.
For a long time, it was considered extremely impolite to discuss the topic of money with others. This taboo originated from the British. Back then, if you happen to be wealthy and you were freely discussing money, you would come across as gauche and extremely tacky. If you were financially struggling, on the other hand, talking about money was useless and only creates more stress. Hence, parents were reluctant to expose their children to that burden.
Today, the taboo still exists among us. Whether it’s with your family or friends, money is seen as a personal matter and shouldn’t be freely expressed. It is both a generation thing as well as a cultural upbringing – for most of us, we simply grew up without explicitly knowing our family’s financial status.
The gist is that, money is very closely related to our social status. We tend to associate money with beauty, intelligence, trustworthiness, and success.
As social beings, we want to fit in. We want to enjoy the same kind of food our peers are eating, wear the same brands they wear, drive the same car they drive (or even better cars), and live in the same kind of house they’re living in. It’s natural and normal but it does leave an impact on our finances. If we can afford it, that’s great! But if what our income isn’t actually appropriate for that type of lifestyle?
Exposing our actual income or the potential debts we’ve obtained over the years can be an embarrassing and uncomfortable situation. It might cost us our dignity and our friends. Which is why we avoid talking about it – to save face. Besides, we would prefer talking about things that we’re good at, or things that we know about. For most of us, financial literacy isn’t our forte. So, why would we put ourselves in a situation that can paint us as “unintelligent”? It makes no sense.
But what if we’re actually missing out?
How many times have you heard the warning, “Never ask your colleagues about their pay”? It’s an age old warning, meant to stop us from inquiring too much since it’s been deemed as rude for the longest time. But if you’re not discussing your salary with your peers or people within the same industry as you, how do you know you’re being paid fair?
Sylvia Kwan, Chief Investment Officer at Ellevest, recommends that we should, especially for women. “Talking to others helps you learn how much you should be making, and gets you more comfortable negotiating for that raise. Forty-six percent of men always negotiate salary following a job offer, compared to just 30 percent of women, and that can lead to up to $2M left on the table over the course of your career.”
Your hesitancy to talk about money can leave a negative impact on your close relationships. It can be breed distance and even distrust. On the other hand, talking about money regularly can serve as a valuable resource for your children, as well as draw the whole family closer together.
If a family has more than one source of income, the money discussions need to happen especially when you need to make big financial decisions – which can affect everyone. Whether to downsize or remortgage, how much support to give towards university fees, or how to tackle debt, all these issues need input from the whole family unit. Plus, talking comfortably about finances is an important part of helping kids develop a healthy relationship with money.
Knowledge should always be shared and you’d be surprised by how much you can learn from a simple conversation about money. Maybe you’ve heard stories about a distant uncle not saving enough for his retirement, or a friend of a friend made a huge investment mistake that cost her thousands. Whatever it is, there’s always a lesson in every story.
If you’re too embarrassed to talk about money, you’ll miss out on valuable information that can improve your wealth. So put aside your shame and embarrassment and you’ll find yourself asking the right questions.
So, we’ve established why talking about money is important and can bring many benefits. The question is, how should we do it? Are there rules and regulations that shouldn’t be broken, or should we just take a leap of faith and go into it blindly?
Whether you’re married or not, not talking about money can seriously affect your relationship. In fact, in Malaysia, nearly half of divorce rates are due to financial issues.
One of the ways to best approach the topic of money includes establishing your goals together. This is the part where you should make a list of the goals you’d like to reach, both in the short term and in the long term. Once that is done, you can then find the ones that are in line with your goals and agree to work towards them.
Next you can plan the actions you need to make as a unit to reach that goal. Each of you need to be willing to make some sort of sacrifice to reach the goal.
Try a Money Date while you’re at it. A Money Date is a special day that you need to set and it’s only for you and your spouse. During this date, it’s important to do a financial self-assessment so that you’re both on track towards your financial goals.
Remember to always be fair when assessing your finances together. We’re all humans and we are bound to make mistakes with our money, especially in terms of overspending. Always keep a level head when discussing this matter with your spouse so that no one gets too over-emotional about the issue. Even if you think they’re spending on unnecessary items, ask them what they think of the overspending – was it worth it and reasonable?
A lot of parents are reluctant to talk about money with their children because they don’t want to expose their own money skeletons to them. But that shouldn’t be an excuse for you to stop your child’s financial literacy.
Start by reevaluating your personal beliefs about money. Before you sit them down and talk about the importance of saving and not overspending, take a look at your personal money habits. You would want to lead your children by example.
Always be honest. Sharing about your past money mistakes can be a humiliating situation but it’s important your kids learn from your mistakes. If you’re tight on money, tell them. Explain to them the situation and you’d learn that children can be incredibly selfless and understanding. They will appreciate the openness in the long run.
Try talking about values instead of numbers. You don’t need to expose your exact salary or how much debt you have, but instead, focus on the importance of saving, giving, budgeting or paying down debt. You can read more about how to help them manage their money here.
If you have aging parents, money can be a difficult topic to talk about. They may feel embarrassed about their financial mistakes and insists that it’s “none of your business” every time you try to bring it up. So, what should you do?
Be gentle. Our parents are older now and they’re much more emotionally fragile. So, don’t accuse them of overspending or not saving enough for retirement. Instead, invite a discussion. Listen to what they have to say and if you think they need some assistance, offer help. Sometimes parents feel embarrassed about asking their kids to take over financially, and may not be ready to hand over the reins right away but do extend the help, regardless.
Ask for access to their important financial information. Life is unpredictable so try to ask from your parents their financial information such as their insurance information, estate planning documents and the likes.
Most importantly, have patience. Your parents have been so used to taking care of you and not the other way round so there could be some resistance in the beginning. Just continue to reach out to them to have discussions and if required, get some family members to help as well.
It’s easy to feel intimidated about your financial status when you compare it to your friends, which is why most of us just straight up avoid the topic altogether. But talking about money with your friends and peers can be immensely valuable!
Ask questions. If you’re unsure about a specific term or the financial concept, don’t hold yourself back from asking. If your friends have experiences with it, they can provide the best tips and suggestions and you’ll learn a lot.
Do bring the topic up in a productive, positive way, so that everyone can participate. Remember, this is not a competition and try to curb your jealousy. Everyone is bound to have different lifestyles so remember to be civil and inclusive.
Be honest. If your friends keep going to places you can’t afford, just pull them aside and tell them the truth. If they’re real friends, they’d understand and help out by either adjusting the budget of the plan or help you find suggestions for your financial rut.
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