Want to feel happier and have more money? Talk more.
It turns out, more communication can make you financially fit and happier in your relationships.
Since money can be regarded as deeply personal and private, it’s one that you’re typically only able to have with those close to you. But that’s okay – lifting the taboo of the subject to connect with your loved ones is a moment of vulnerability that can pay off.
These won’t be easy – but they will be worthwhile.
Talking to Your Parents
Our parents are the ones who offer our first impression of the concept of money. But they also may have taught you that money is something very private you shouldn’t bring up.
Still, you don’t want to avoid the conversation until the problem has become catastrophic.
The question to ask is: Are your parents prepared for retirement?
Parents may bristle at first when you bring up this undeniably sensitive issue. In fact, it might me just as uncomfortable as some conversations you had around puberty. Others might be relieved that you’ve brought it up and might really benefit from having someone on their side.
Being an ally doesn’t mean just giving them money or letting them move into your guest bedroom. Sometimes it can be as easy as your time, energy and expertise to prevent them ever needing those things to begin with.
Ways to help your parents that don’t involve money:
- Helping them obtain a free credit report digitally
- Making sure that any annuities or structured settlements have a designated beneficiary in the event of one parent’s death
- Searching for unclaimed pensions in their name at the Pension Benefit Guaranty Corporation, a US Government agency protecting American pensions
Talking to Your Spouse
Every newly married needs to have a purposeful, lengthy discussion about money. No, this isn’t a vague understanding you have of their approach to money that’s been cobbled together from things they’ve said here and there. This is an official meeting that both parties should approach with the same seriousness they use to approach their career.
When a couple joins financially by marriage, they need to take at least a few hours to talk about how they were raised to manage money, their money concerns, the amount of debt they carry, retirement planning, and anything else financially pertinent. All incoming money, outgoing expenses, credit cards, car payment, credit score and student loans should be on the table – literally.
From here, it’s important the couple devises a budget that accounts for the strategies, needs, and lifestyle of both people. If one of you is a saver and one is a spender, now is the time to reach a compromise.
I know it sounds intense. It will be. But it will absolutely help you start your marriage off on the right track. But what about afterwards?
Anne Malec, author of “Marriage in Modern Life,” told MSN Money recently that the biggest mistake couples make when having money conversations is expecting money management to fall on one person’s shoulders.
Both spouses need to be involved in how money is being spent. Continuing from your first initial meeting – which by the way it’s never too late to have – you can stay connected as partners in each other’s financial success.
Having a quick monthly meeting about the state of the union can do wonders. In the meeting you can:
- Review the budget and pay bills
- Talk about trends in spending
- And extra expenses on the horizon to prepare for
This presents an opportunity to celebrate the small wins, instead of only talking about money when it becomes a problem. And there’s nothing wrong with rewarding yourself with a decent bottle of wine and a pizza afterwards.
Talking to Your Kids
Providing opportunities for thoughtful conversations about money is one of the best things you can do for your children. The best way to do this according to research? Sit down for meals together.
Research at the University of Michigan showed that the time kids spent eating at home was the biggest predictor of academic success. Additionally, kids who eat dinner with their family are less likely to do drugs, commit suicide and develop eating disorders.
Plus, it’s a great time to teach your children how to think critically about money from an early age. Research from Cambridge University shows most 7-year-old children understand that money can be exchanged for products and that money is earned through work.
While young children don’t need to know the finer points of your budget, it’s important to teach children the tradeoffs of money and the emotional involved with money.
When a child becomes upset about not being able to purchase something, it’s a great opportunity to teach them to handle those emotions in a healthy way. You might think it’s crazy that your 8-year-old wants to spend their savings for a new bike on a new Batman toy. Like anything else, helping them work through the decision process helps them grow.
A study published in Management Science showed that one-time financial lessons wear off quickly, to the tune of one hour of instruction wearing off after five months. So just like a series of conversations with your spouse works well, a series of conversations about money is important with your children.
With a series of conversations, as they get older you can have more advanced conversations, like how compounding interest, credit cards and insurance work.
And if you’ve done your job right, they just might come around in a few years and ask you if you’re prepared for retirement.
This was a guest post from Catherine J Byerly, Staff Writer at StructuredSettlements.com. Her mission is to help consumers stay financially savvy, and make carefully evaluated decisions about your settlement.