Relationships and money: what to talk about and why
Money is one of those subjects that everyone has to talk about, even though few people are comfortable discussing it. While you don’t need to lay out your five-year financial plan to every person you meet on the street, it is vital for you and your family to have appropriate discussions about money, your budget, and family spending habits. If you’re not sure how or when to have that discussion, we have a few ideas on ways you can get started.
You and your spouse
We’ve said it before, and we’ll keep saying it until the end of time: you need a budget. It just has to happen if you want to have any type of financial security, even if you are living paycheck to paycheck. You and your spouse or significant other need to be aware of your expenses and the plans you have for your collective financial future.
If you’re uncomfortable starting this conversation, start small. Sit down one evening with as few distractions as possible and list out your expenses. Include everything, from the electric bill to your estimated weekly gas usage for the car, and, if money is tight, look for places where you can trim some of the excess. You might not even realize how much you’re spending until you write it all down. This is a great launching point for creating a budget that works for your family.
You and your kids
Teaching your children about money is vital to helping them understand the idea of saving, budgeting, and spending. You don’t need to give your kids a list of every line in your budget, or ask them to audit your bank account. But you can still talk to them about money and why it matters to use it well. How you have this discussion will depend on the age of your kids:
Infants: Do nothing. Smile at them a lot. You’re done!
Young children: You don’t have to get into the math, but you can begin explaining to your children that it is your job to figure out the best ways to spend your money. The older your kids get, the more they will understand that money is not an infinite source, and just because you have money in the bank doesn’t mean you need to spend it all.
In fact, you can show your young children your budget to let them see all the items you need to account for when choosing how and where to spend your money. If you don’t want to them announcing to their schoolmates how much you spend at Target each month, you might just want to show them where your money is assigned, and not how much is spent.
Older children: Once your kids have a better grasp on more complicated math, like adding and subtracting in double digits, multiplication, division, etc., you can ask them for their input on your budget as a math exercise or help them make a budget of their own. If your children earn money through chores or an allowance or if they receive money as gifts, you can sit down with them and explain the process of deciding how to spend their cash.
Get them comfortable with the idea of not using every penny they have and show them the value of looking for deals on coveted books, games, or toys. You don’t need to insist they research for six weeks before making a purchase, but teaching them how to spot a good value is a skill they will use for their entire life.
Teenagers: While you don’t want your teen to take on the emotional burden of your financial responsibilities, you can still be honest with them about your financial situation as needed. For instance, if your teenager is hoping for a birthday gift that isn’t in line with your budget, you can explain that they need to choose a gift within a certain price range or encourage them to find a job that will allow them to buy the gift for themselves. In fact, one of the best gifts you can give your kids is the ability to understand the responsibility that comes with money.
What else should I discuss?
Starting these conversations is a great way to help your family gain a better understanding of your financial situation, especially as they begin to grasp the value of smart spending. You can keep the conversation going by checking in with your kids regularly and helping them with questions they have.
Normalize the money talk
It’s important to help your kids understand that discussing money is not a bad thing – in fact, it’s a great idea. You don’t have to turn every conversation into a lesson on finance, but by openly discussing age-appropriate money topics, you can help your kids become comfortable with communicating money-related questions or concerns. You can even consider having a weekly family budget discussion, where you talk with your family about new ideas for budgeting or show them how your savings helped them get a fun treat.
Speak openly and without judgment
If you and your spouse share a checking account, you both need to review it regularly, and speak to each other about any questions you have. The same goes for having separate checking or savings accounts – the goal is to understand how much shared money you have between you, and what you plan to use it for.
Address any concerns right away: for instance, if one of you goes over budget without discussing it first, work on a plan for an alternate solution that you could use in the future. Remember that staying calm and working smart next steps will aid you in making better financial choices moving forward.
When it comes to money, it’s always better to overcommunicate than to under-communicate. Your finances don’t have to dominate every conversation, but encourage everyone to ask questions and voice concerns so you can keep an open conversation going. Practicing the concepts now will go a long way in preparing your family for the future – and you might just learn something, too.