When it comes to difficult conversations, there are few topics tougher than money. Tough financial talks happen at just about every stage of life, from getting married to starting a family to retirement. And while you may dread having them, the only thing worse than the awkwardness of a financial conversation is the consequences of not having one.
Luckily, financial talks don’t have to be as tricky as they might seem. We’ve collected the best tips and techniques for every type of money talk, and even put together a few conversation starters to get the ideas flowing.
How to Have Hard Conversations About Money
While talking about money with your toddler is obviously much different than discussing debt with a potential partner, there are a few best practices you should follow for any financial conversation.
Choose an Optimal Time to Talk
Misunderstandings and frustration are much more likely if you try to talk while you or your conversation partner are tired, distracted, or even hungry. Choose a time when you’re both relaxed and have plenty of energy.
Pick a Place Where You’re Both Comfortable
Not all conversations need to be formal sit-downs. If you and your partner love the outdoors, plan to talk on your next hike. If your teen seems stressed when you come into their room to talk, take it to the living room or kitchen instead. Anywhere works as long as it’s relatively private with few distractions.
Do an Activity While You Talk
Some people open up more when they’re simultaneously engaged in a passive or repetitive activity. For example, your retiring dad might be more approachable on the golf course, or your teen may be more comfortable chatting from the passenger’s seat of a long drive.
Keep It Short
These conversation starters include many questions, but we don’t recommend trying to get through all of them in one sitting. You want to end the conversation before either person gets tired or frustrated. So plan to break up what you need to discuss into manageable chunks.
Must-Have Money Conversations
Some financial talks are essential to prevent much bigger headaches later on. You don’t want to wait until marriage to talk about your partner’s student loan debt or find out your teen has no idea how to manage a credit card after they’ve already left for college.
Here are a few money conversations every person should have.
Financial Conversations With Kids
It can be difficult for parents to figure out when to start talking about money with their kids — and how complicated the conversation should be at each age. A good rule of thumb is to start talking about dollars and cents as soon as your child starts practicing addition and subtraction in school. Before then, you can talk about more general concepts like why people need jobs, what banks are for, and other age-appropriate topics.
Financial Conversations With Teens
Once kids are older, it’s even more important to make sure they learn the necessary lessons to prepare them to become financially independent adults. While most high school history or social studies curricula cover basics like taxes, inflation, and credit, parents should look for opportunities to connect those ideas to their kids’ personal lives.
For example, your teen might know how hyperinflation contributed to the Great Depression. But that doesn’t mean they understand that their money will lose value if they keep it in a savings account that doesn’t earn enough interest to keep up with the inflation rate.
Financial Conversations With a Partner
When it comes to broaching financial topics with a partner, earlier is always better — especially if you’re not married and think a wedding could be in your future. Partners should talk about more than just their respective debts and credit scores. It’s also important to make sure you understand each other’s attitudes toward money and wealth, what kind of a financial education you both received, and how your individual financial goals align with one another.
For married couples or those who are planning a family, it’s good to go over the questions for kids and teens together, too, so you can discuss what financial lessons you plan to teach your children and what values and beliefs you hope to pass on.
Financial Conversations With Retiring Parents
You should have your first conversations about estate planning and retirement well before your parents plan to end their careers. This way, you have plenty of time to make any necessary changes or anticipate obstacles that may lie ahead.
An easy way to determine your parents’ retirement plans and whether they’re adequately prepared for retirement is to ask their advice on how you should manage your own retirement funds.
When it comes to end-of-life finances, your best bet is to tackle the big financial questions with your parents around the time they retire. You’ll need to discuss things like whether they plan to move and whether they have enough saved to support them through retirement. While you have these talks, you should also plan to check on essential estate planning documents and make sure plan beneficiaries are up to date.
Most of the apprehension surrounding difficult financial conversations comes from a desire to avoid discomfort. But the reality is that awkwardness is inevitable when it comes to talking about money. Since you can’t avoid it, embrace it! The only real mistake you can make is not to have important money conversations at all.
Whatever discomfort you experience talking about money, it will be nothing compared to the unpleasantness of making major financial mistakes because you and your partner, parents, or kids weren’t on the same page.