Let's talk: how to talk about money
Monday, October 10, 2016
Talking money with your family can be a tricky topic, particularly when it’s about big issues like your end-of-life financial matters, but it doesn't need to be as hard as you think. Here's how to get started.
Our recent survey of Foresters Friendly Society members found that only 15% of respondents spoke to their families about money on a regular basis, while 62% spoke only occasionally.1 That's still better than the rest of the UK; This is Money reports on how there often seems to be a barrier when it comes to talking about money, and that 22% of families only talk about money when ‘it becomes necessary’.2
“We need to talk...” are never words anyone wants to hear, but talking to your nearest and dearest about life's big issues – particularly your finances – can be really important and, with our handy guide, it can be pain free.
“Asking for help is often difficult for most people, but talking about issues impacting your wellbeing can be beneficial. Given the high cost of living and recent poor wage growth, money is often one of the biggest worries for a lot of people. As personal finance can be such a sensitive subject, it’s important everyone feels comfortable when seeking guidance – from the practical decisions to someone listening to general concerns.”
Myles Edwards, Membership Director, Foresters Friendly Society
So pull up a chair, gather the family round and let's get talking...
Step 1 – What do you need to talk about?
Before you start, it's a good idea to work out where you stand. Make a list of the financial products you have and the details of them. It will be useful to provide your family with information such as which products you have – for example savings plans, investments and life insurance – and who you have taken these products out with. You don't need to overload your family with information, but it's important to let them know what exists.
Step 2 – Who do you need to talk to?
Once you know what you need to talk about, you can identify the people you need to tell. Should it be your partner or spouse, your adult children, a nephew or niece, or perhaps a close family friend? The people you choose can include the person you plan to make executor of your estate in your will, your next of kin, or the people you would like to benefit from your will.
Step 3 – How should you approach it?
Armed with a good knowledge of who you want to talk to, and what you want to talk about, broaching the subject of money will become much easier. Make sure you pick a location where everyone feels comfortable and keep your chat informal. It's always a good idea to come at a money chat from a positive angle, and simply work through your list of points. If anyone has any questions, be sure to note them down, and remember that you don't have to rush through everything in one go.
Step 4 – What should I do if something goes wrong?
If, for any reason, your money chat becomes confrontational or negative, take a step back from it to work out why tempers flared. Money can be a sensitive subject for many people, so you may need to give everyone a chance to cool off. Remember that your finances are your decision, but should a family conflict arise from it you could seek a third-party professional to act as an intermediary.
Step 5 – Do I need to do anything afterwards?
If any questions were raised during your discussion, make sure you find out the answers and get back to everyone. If any matters came up that need further thought or discussion, it's a good idea to arrange a follow-up chat to clarify everything. Remember that your money talk doesn't have to be a one-off, the more often you talk the better it can be, you could have annual, bi-annual or even monthly conversations if you feel you need to. Finances can change from year-to-year, so it's good to keep everyone updated with what's going on.