Conversations with family about money can be difficult and emotional—but they're necessary. Here’s help for beginning (and continuing) talks about family finances.
Quick takeaways
What’s harder to talk about than politics or religion? As it turns out, money: Only about 4 out of 10 adults feel OK talking about it with family and friends.
But talking about money—what we do with it, what our plans are for it, whether we need help with it—is important, and probably doesn’t happen enough. The urgency may be even greater if your family includes people contemplating retiring in the next few years: Over 40% of people nearest retirement age don't have any retirement savings.
Do you want to start (and keep having) these conversations—either to talk about your own money, or to help other family members talk about theirs? Try these steps and conversation starters.
We get together for all sorts of reasons: birthdays, holidays, casual meals, regular traditions. That means you don’t expect to celebrate a July birthday on, say, Thanksgiving. So why would it feel OK to bring up difficult money conversations when you’re gathered for another reason entirely? It wouldn’t—because no one likes to have big, difficult topics sprung on them.
If you’re serious about beginning, or continuing, hard money conversations, treat it like its own meeting or gathering. To do that:
- Schedule a time
- Set an agenda
- Manage the attendee list—just those with a role to play
- Find a comfortable location
Any conversation about money might turn out to be wide ranging and complicated—and you’re not going to work through it all in just one meeting. Instead, break it down into small bites, and keep it simple. Doing so builds confidence and trust, so loved ones can talk to you without feeling shame and blame.
| Your question | A conversation starter |
|---|---|
| If you're unsure about retirement plans | "What does retirement look like for you?" |
| If long-term care may be an issue | "What worries you about money in the future?" |
| If you don't know what their legacy plans are | "How do you want to be remembered?" |
| If you think they may have financial concerns about income or expenses | "What makes you comfortable or uncomfortable talking about your money?" |
What prompted you to want to have the conversation about money? In all likelihood, it may not be because everything is going well. Many people only start to talk family and finances when they’re facing a crisis or having end-of-life conversations, says Stanley Poorman, a financial professional with Principal®. “Talking about your finances at this stage is forcing you to face your own mortality, and that’s never comfortable for anyone,” he says.
Keep these tips handy to help:
- Write down talking points before you meet.
- Take notes.
- Avoid labels, blame, and shame. Just because a sibling made a choice you disagree with, for example, doesn’t mean it’s OK to call them irresponsible.
- End the meeting early, if needed, especially if the conversation becomes heated.
- Listen. Then listen again.
A commitment to more transparency in your family discussions about money means a commitment to talk regularly. If you were able to get through an entire topic, that's OK. Decide what’s next, and when you’ll meet. That helps you be specific and supportive; this isn’t the only conversation, but the first conversation.
Part of Poorman’s work is to to help educate other people about their money. Still, it can be hard for his own family members to come to him for insight. If you feel stymied or there’s too much tension, a neutral third-party, such as a financial professional, may be able to help. “Sometimes I just put it out there that I can help if they want, and let them come to me,” Poorman says.
That’s because learning how to talk to family about money is hard. “You won’t get it right 100% of the time, but simply starting from a place of good intentions is important,” Poorman says.
If you need to have your own conversation about family finances, it’s good to prepare. Start by logging in to principal.com to check your savings rate and find out how well you’re progressing toward your goals. Don’t have an employer-sponsored retirement account or want to save even more? We can help you set up your retirement savings with an individual retirement account (IRA).
