Talking about Finances

Why it’s hard and why it matters

Photo by Sedulur Papat on Unsplash

Today’s topic might get quite uncomfortable. If you wonder why I said “uncomfortable”, that’s because research shows that though we’re all going through financial stress on varying levels, 42% of us still shy away from discussing finances with friends and even family.

So I’ve decided that today we’d be talking about …

GIF from giphy

I’m being head-on, but I don’t intend to scare you. I know discussing money can be incredibly challenging. I’ll even rat myself out — I used to be one of those people.

In the past, ‘money’ seemed like this deeply confusing and abstract topic I simply couldn’t for the life of me understand. In retrospect, I realize most of my worry came from how vague conversations about money around me were. I knew that to live well and plan for the future, I had to make money, and that when I eventually made it, I had to learn how to manage it as well.

I knew these theoretical bits, but what I didn’t understand was the ‘how.’ I didn’t grasp the practicalities of ‘handling money.’

Conversations reveal a lot, and the more I had those, especially when I listened in and observed the people around me, I realised I wasn’t the only one who felt that way.

I saw others like me — people who wanted to learn about money and generally finance management, but the distinctive bit was how fundamentally different all our upbringings were.

In some houses, talking about money was considered a taboo, which I’m convinced has something to do with not wanting to speak deeply on something you don’t have or understand. In some cultures, speaking on finances was considered rude, and in some homes, those conversations were welcomed. I found all this interesting and I wanted to know more.

My curiosity wins most battles, and it won this one as well.

So to understand the differing views, I put this question up on my story:

Question put up on story

And I got these responses;

🧐 Understanding the Challenges:

I realised that there was a pattern with the answers and some recurring worries. These came up often;

• The fear of judgment
• Needing to hear another person talk about it
• I’d add a lack of financial knowledge

And it’s easy to see how these could be problems;

Take the fear of judgment, for example — Imagine you just made some money off a project you’re proud of and in excitement, you decide to splurge excessively.

But afterwards, here comes our friend — post purchase clarity.

The next day you wake up staring at all the stuff you bought and you immediately regret acting on impulse. So when you meet up with friends and you’re asked about the things you bought, you decrease the prices or you avoid discussing it altogether because you feel ashamed and you’re afraid of being judged for the financial choices you made in the heat of the moment — so you keep it to yourself.

Don’t worry, I get you, we’ve all been there.

The problem is, a short-term splurge might have long-term effects and you might brush it off as a one-time thing, but habits grow easily. If this continues, over time you might regret that.

I understand self-care so a more healthy approach could be putting money into a ‘spoil myself’ account and over time you get to use the money there as you like, but the good thing is, the splurge is accounted for before it even happens — it’s well thought out.

Well, maybe that doesn’t apply to you, so let’s try another scenario. The internet has been a blessing in most ways, one of which is the gift of a double life — you can be whoever you want online, I’m not even kidding.

On social media, you could be rich even though you’re drowning in debt in reality. If this is the case, then naturally, you’d want to move things around to keep up appearances even to your detriment. This is a stressful situation and of course you’d want a way out, but the issue is, who would you talk to?

That would be ratting yourself out then running the risk of looking/feeling like a failure. So you keep it all in, and this starts to stress you out mentally.
The thing about money is, it’s very linked to many parts of us, our ego, our self-image, and it holds significant emotional value as well. Which is why we get very stressed and anxious by the lack of it.

Sometimes the lack has less to do with ‘not having’ and more to do with ‘not knowing how to manage’ what we already have. Financial illiteracy is a real problem — in fact, it’s the biggest problem.

And when the topic of Financial Literacy comes up, people dive straight into budgeting and saving for rainy days, but something else gets spoken about less — at least less clearly.

💡 Investing!

Though it gets spoken about, people seldom break down what it means in a clear step-by-step way.

And that’s the thing about money, right? We all need it. So people hear about quick ways to make more money after putting in less and they quickly jump on it.

For example, you hear about a get-rich-quick scheme and the benefits entice you, so you jump on it without fully understanding what it means, what they’re doing, or the level of risk it entails. In your excitement to make good money quickly, you go hard and go home (literally).

Regret GIF from GIPHY

And after trying this out, it’s hard to come back from. Depending on how much you put in, your level of distrust grows.

The point is, it’s understandable if you get very wary about investing but — investing isn’t what is bad, your lack of understanding of how it works is what is.

Investing could be risky, but there are safer ways to go about it and before you invest in something, I’d say you should on some level, understand it. The fact that your friend understands how it works isn’t enough. You should know something about it too because … why not? it’s your money after all.

And you have to be patient with handling money but you should also understand the market enough to know when to move. If you act too quickly, you could lose everything and likewise, if you act too slowly, you could miss opportunities.

Concepts like investments, savings, or debt management, are basic and easy to grasp when explained simply but if you have little knowledge of these bits, discussing money can seem intimidating.

You might even think to avoid these conversations to hide your lack of knowledge (yup, that is a self-sub). But, nothing good comes from hiding a problem you’ve become aware you can’t solve on your own. Have conversations about it, so you can learn.

While we’re still on the topic of investments, there’s another mistake you can make. There’s something known as high and low-interest savings.
Don’t worry, I’d explain it. Let’s use an example;

• Imagine Kandy, who has just inherited a significant sum of money and wants to invest it because she wants to watch her money grow. But the problem is, she doesn’t know a lot about investing. Though she knows a bit about putting money in a savings account — enough to know she’d get some interest on the money over time. What she inherits is a lot of money, so she decides not to speak to anyone about it. She finally decides to keep the money in a savings account which turns out to be a low-interest savings account.

For context, a low-interest savings account simply means that the bank offers a relatively small percentage of interest on the money you have in the account.

• Of course, over time she doesn’t benefit as much and she misses out on potential higher returns that she could’ve earned through other investment options like certificates of deposit (CDs), mutual funds, stocks, or bonds, which often offer higher interest rates or returns on investment.

The point here is if Kandy had discussions to weigh her options, she might’ve chosen differently. Her decision obviously stemmed from a lack of understanding/knowledge of how investments work but not speaking about it inadvertently made her miss out on potential opportunities. She didn’t have to divulge the particular amount she had, but she could’ve asked more questions and gained deeper insights on how to go about it.

💡 Another Insight from Survey Answers;

Something else I realized is, beneath the fear of judgment, people really want to have these conversations about money. They want to understand how it works, and they want to know how to solve their financial problems. The issue is, they don’t want to feel like they’re the only ones with this problem. There’s something heartwarming in realising that like you, everyone doesn’t have it all figured out and we’re all pretty much learning along the way.

But regardless of the points raised above,

Beneath the fear of judgment, social perceptions, and financial illiteracy, there are deeper reasons why enough conversations aren’t being had around money.

Some of these reasons are;

Cultural and Generational Differences: Our attitudes toward money are deeply influenced by our cultural and generational backgrounds/differences. In some cultures, talking openly about personal finances is considered a taboo and rude. We are taught that money matters are private and should not be shared openly. Over time, these social norms create barriers and misunderstandings when discussing financial matters, even as we grow older. At that point, when we’ve grown up with those beliefs, breaking those norms at a later stage can feel uncomfortable and intrusive.

Family Dynamics: Our different upbringings play crucial roles in how we view and handle money. Christine Luken talks deeply about this in her book, Money is Emotional where she explains that as young children we tend to internalize everything our parents say and that also includes their views on money. But as we grow older, we can recognize the limits of their mental models and find new ways that work for us and the century we’re in. What worked 15 years ago, might not work now. Adaptation is crucial in every aspect of our lives including our finances. This Forbes article also dives deeply into ways our childhoods could influence our money habits and offers plausible solutions for getting out of unhealthy financial patterns.

Financial Insecurity: Many survey participants highlighted financial insecurity as a major concern. The fear of feeling inferior can make discussing financial struggles incredibly difficult. It is easy to understand why because when faced with financial difficulties, discussing it in that moment can trigger feelings of shame and embarrassment. Admitting these challenges might make you feel naked and exposed, especially if you perceive others as more financially stable. In such situations, you could prefer to keep your financial worries to yourself, especially when comparing your situation to others who seem to be doing better.

Power Dynamics: Money discussions in relationships can also be influenced by power imbalances, especially when one person earns significantly more than the other. There could be worry that talking about finances might lead to imbalances or unrealistic expectations within the relationship. For instance, if your partner knows your income, they might expect you to contribute more than you’re comfortable with. Similarly, family members or friends might develop expectations or feel entitled to a portion of your salary. While these expectations are situation-specific, they can create heavy emotional burdens, that make people hesitant to talk about money openly.

Something else I’ve observed is people often form deep emotional attachments to money, which either bring feelings of freedom and security or, stress and anxiety. In these situations, it’s very understandable why having open discussions about money can feel challenging.

I strongly believe though that understanding how someone manages money can reveal significant aspects of their character, often more than we realise. In romantic relationships, understanding a partner’s attitudes and behaviors towards money is very crucial for building a sustainable future together. Merely desiring wealth isn’t enough assurance that you will have it, or that if you obtain it, you’ll know how to manage it effectively. So, it’s incredibly essential to continue having these conversations.

🗣 Understanding Why These Conversations Matter:

Simply knowing you won’t go broke or being complacent about financial struggles isn’t sufficient. To make better decisions, you must first grasp how money works and this is something you learn through research, experience and conversation.

These conversations serve a dual purpose. They aren’t merely for talk’s sake; they also provide accountability and personally, I’ve found accountability immensely helpful in managing my finances.

You’ve read this far, so I’m inclined to presume you’re interested in improving your financial management skills. So now I’d let you in on the not-so-glossy bits.

Initially, discussing money may feel uncomfortable, it’s almost like baring your soul especially if it’s your first time. But, with each conversation and exposure to diverse perspectives on investing, saving, and financial management, making informed decisions become easier.

And when sharing financial concerns, it’s crucial to confide in people you trust and those whose judgments can genuinely aid your situation. Assess the character and financial habits of those you discuss money with. If you admire their approach, then engage them in a conversation and seek their insights.

Plus you don’t need to divulge every detail about your finances; sometimes, sharing just enough context can provide a fresh and helpful perspective.

Okay, we’re going deeper.

I’ve gone on for a while about having conversations and maybe you deeply wonder why it’s so important.

Well, this is why;

1. Learning Together — Shared Knowledge, Informed Choices:

Picture this — you and your friends gathered, engaging in casual conversation. Amidst the chatter, a question about money arises. Suddenly, one friend shares their investment insights, another discusses effective saving strategies, someone else delves into the importance of diversification, while yet another friend talks passionately about long-term planning. What initially seems like friendly banter gradually transforms into an avenue for deep insight.

These shared experiences and diverse viewpoints inadvertently create a pool of collective wisdom that can guide your financial decisions. The added advantage? You’d get to navigate your financial journey with friends which makes the daunting task much more manageable.

2. Budgeting:

Have you ever wondered why and how certain individuals or families effortlessly save and budget their finances? It’s not a mysterious art; most of the time, it’s the result of open conversation. When you openly share experiences and tips — like tracking expenses, setting savings goals, and creating emergency funds — you empower yourself with practical skills. These talks aren’t about passing judgment; they are about mutual support and learning, fostering financial security through shared knowledge and understanding.

• Investment Education and Financial Literacy:

Let’s be frank — financial literacy is the cornerstone of effective money management.

When you ignore the basics of how money operates, your ignorance only deepens — the only cure for ignorance is finding out.

Investments, on the face of it, sound complicated, but they don’t have to be. If you dedicate time to grasp the fundamentals of stocks and bonds; there’s a wealth of resources out there — books, articles, videos, and podcasts — that break down complex concepts into easily digestible pieces. You just have to put in the effort to seek out these resources (don’t worry, I’ve got your back; I’ll provide some links below).

Investment discussions aren’t reserved for experts; they are equally crucial for beginners too, offering the knowledge you need to grow your money wisely. Thanks to the internet, it’s all within your reach — if you’re curious enough, you can learn anything online, making the world of finance accessible and empowering for everyone.

And now …

Again, I get it. Talking about money might make you feel vulnerable, and it’s tempting to ignore the issue. But true and sustainable comfort comes from facing the challenge head-on.

I’d recommend though that if you feel uneasy you can start by playing the role of a listener or observer and learn from those that have done some work in figuring it out. Through this you can observe how people handle money, learn from their mistakes and gain insights that make your journey to financial freedom easier.

Also, have an open discussion about finances with someone you trust — a friend, family member, or partner. Share your experiences, challenges, and goals. Listen to their stories too; you might discover new perspectives and strategies that’ll help you. 😄

💡 Resources:

These are of course inexhaustible but feel free to explore — you’d surely learn a thing or two! 🤗

📚 Books:

• “Clever Girl Finance: Ditch Debt, Save Money and Build Real Wealth” by Bola Sokunbi
• “The Psychology of Money” by Morgan Housel
• “Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!” by Robert T. Kiyosaki
• “Broke Millennial: Stop Scraping By and Get Your Financial Life Together” by Erin Lowry

✍🏾 Articles:

• “How To Have Better Conversations About Money With Your Spouse — 3 Simple Rules” by Kwame Christian
• “The Psychology of Money” — by Morgan House, Collaborative Fund
• “Why Is It So Hard to Talk About Money?” — by Anna Sale via Simon & Schuster

🎙 Podcasts:

• “The Ramsey Show” by Dave Ramsey — Provides practical financial advice and answers tough listener questions.
• “Don’t Go Broke Trying” by Reni, The Resource — Talks about money problems in a fun and engaging way.
• “So Money” by Farnoosh Torabi — Interviews with financial experts and explores listeners’ money issues.
• “Afford Anything” by Paula Pant — Focuses on financial independence, real estate investing, and living life on your own terms.
• “Money Guy Show” by Brian Preston and Bo Hanson — Talks about wealth building techniques, financial tactics and asset management strategies.

🎥 Videos:

• “The Power of Vulnerability” — TED Talk by Brené Brown — Although not directly about money, it discusses the emotional aspects that often hinder money conversations.
• “5 Money Conversations to Have Before You Get Married” — by The Financial Diet — offering practical advice on discussing finances with your partner.
• “The Untold Truth About Money: How to Build Wealth From Nothing” — by Minority Mindset — explaining practical steps for building wealth and financial stability.