Some years ago a wise woman in her later years shared with me that
“talking with family about money is like doing a high-wire act without
a safety net -- the slightest wind of disagreement can make for an
unpleasant landing.”
Most people agree that it’s easier to have a financial conversation
with a stranger than it is to broach the subject with a spouse, a child
or a parent. I experience this frequently as I fly around the country
to meetings and speaking engagements.
Time after time complete strangers will share intimate details about
their financial picture – especially after they learn what I do. Maybe
it’s the altitude.
The more likely reason is that it’s easier to divulge our fears, hopes
and dreams about money to strangers because it often comes sans
judgment. While not always intended, parents, siblings and yes even
grandparents can look askance at our financial decisions if they don’t
fit into the family norms.
Which of course begs the question -- when it comes to money, what are
your family’s norms? Enter: the 8000 pound elephant in the living room.
Because so many families struggle to communicate effectively about
money it can lead to enormous amounts of misunderstanding, confusion
and overall unhealthy behavior.
One woman I know is facing the immediate issue of cutting off two
twenty-something children who each receive financial support in excess
of $40k per-year. In talking with the now single mom, it was never her
intent to let things spiral out of control. But through a series of
cascading events -- an inheritance from her parents, a divorce and
numerous financial bailouts of her children -- the unhealthy money
patterns are now set like foot-deep concrete.
While it might be easy to criticize her from a distance, it didn’t
unravel overnight. There are two primary reasons why it got to this
point. First, she was too close to the situation and couldn’t get a
healthy perspective on what was happening. Second and probably most
important, there weren’t clear boundaries as to how long her support
would last and for what purpose the money would be used.
Bottom line -- it is essential for families to have a process for
communicating about money and also to set clear boundaries and
expectations for what is acceptable behavior and what is not.
One Share Save Spend Idea
Here are a few tips for building healthy family norms around money and expectations.
1. Set a weekly or monthly date on the family calendar to address financial topics and related issues
2. Make a list of topics; don’t forget to address those that often
get overlooked (e.g. what happens after a child graduates from
high-school or college -- will they still receive financial support?)
3. Periodically invite your financial advisor into the conversation to address complex topics and for a neutral perspective
4. Listen without judgment
Money Talks – One question for teaching about money
Why is it helpful to establish a regular routine for addressing money topics?
Gotta Have it Now - WOW!
Americans find their mothers to be more influential than their fathers in teaching them how to manage their money.
Source: National Survey on Financial Role Models by Ameriprise Financial
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