How To Talk About Money With Those Around You

Knowing how to talk about money can be challenging, but talking about money is a crucial aspect of any relationship, whether it’s with a partner, family member, friend, child, or even colleague. The current cost of living crisis is hitting everyone hard and so these conversations, while sometimes awkward, are essential for building trust, aligning financial goals and future plans, and avoiding conflict. 

Our latest podcast episode with Vanessa Stoykov equips you with the tools to have open and honest conversations about finances, how to break the money silence and initiate healthy conversations with loved ones, friends, and even colleagues. Through storytelling, and creating engaging and educational content without the jargon, Vanessa helps Australians make better money decisions.

Learn how to navigate budgeting, expenses, and financial goals during challenging times as Vanessa shares the secrets to mastering effective money management and financial education. Whether you’re looking to strengthen your relationship with your partner, educate your children about money, or navigate financial conversations in the workplace, Vanessa’s unique approach to money makes this touchy subject both accessible and empowering.

Why Talking About Money Matters

Discussions about personal finances are often shrouded in secrecy or discomfort, so the importance of open communication about money should not be overlooked. 

Whether it’s sharing financial goals, discussing spending habits, or addressing concerns about debt, these hard conversations are vital for establishing trust, strengthening relationships, and ensuring your overall financial stability.

Building Trust and Transparency

Openly discussing finances with your partner helps foster trust and transparency in your relationship. It allows you both to understand each other’s financial values, goals, and priorities, laying the foundation for joint decision-making and shared responsibility.

Discussing money matters with family members also creates trust and openness within the family unit. Whether it’s you teaching your children about budgeting or siblings navigating shared expenses, transparent communication builds stronger familial bonds and reduces misunderstandings.

Aligning Financial Goals

As partners sharing your financial goals and aspirations means you can work together to develop a unified plan for achieving them. Whether it’s saving for your first house, planning for retirement, or paying off debt, aligning your financial goals ensures that both of you are on the same page and working towards the same future.

In families, discussing money goals allows everyone to contribute to the decision-making process. Whether it’s planning for education expenses, saving for a family holiday, or supporting ageing parents with their retirement plan, open communication ensures that everyone’s needs are considered.

Avoiding Conflicts and Misunderstandings

Money-related conflicts often arise due to confusion or unmet expectations. By openly discussing your financial matters and setting a clear budget with your partner or spouse, you can clarify expectations, set boundaries, and address potential sources of conflict before they escalate.

When conflicts do arise, effective communication can help resolve them constructively. By listening actively, expressing concerns calmly, and seeking mutually beneficial solutions, you can overcome financial disagreements with empathy and understanding.

How to Initiate Financial Discussions

Initiating conversations about money can feel a bit uncomfortable, but with the right approach, it can become constructive and empowering. You might need to address shared financial goals, differences in spending habits, or plan for the future. 

Whether you’re discussing money with your partner, family members, friends, children, or colleagues, these strategies can help you have financial conversations more effectively.

1. Choose the Right Time and Place

Choose a time when everyone feels relaxed and are free from distractions. Create a comfortable setting where everyone feels at ease and are able to express themselves openly.

Begin by explaining why you want to discuss finances and what you hope to achieve from the conversation. Setting clear intentions helps to establish a sense of purpose and direction.

2. Demonstrate Active Listening and Empathy

Active listening is giving your full attention to whoever is speaking without interrupting or passing judgement. Show empathy by acknowledging their emotions behind their words. Make sure to validate their feelings and experiences, even if you don’t agree with them, to create a safe and supportive environment.

3. Ask Open-Ended Questions

Use open-ended questions to encourage the other person to share their thoughts and feelings. Avoid yes/no questions and instead ask questions that invite elaboration and discussion.

Try to dig deeper into the underlying motivations and concerns driving the conversation. By understanding the root causes of their financial attitudes and behaviours, you can address them more effectively.

4. Share Personal Stories

Share your own experiences and challenges with money to give a sense of vulnerability and authenticity. Opening up about your own journey can inspire others to do the same and foster deeper connections.

5. Respect Boundaries

Respect the other person’s boundaries and comfort levels when discussing sensitive financial topics. Avoid pressuring them to share more than they’re comfortable with and be mindful of their emotional responses.

By employing these strategies, you can initiate financial discussions with confidence and compassion, paving the way for more meaningful and productive conversations about money.

Financial Topics to Discuss

With Your Spouse or Partner

  • Tailor budgeting discussions to align with your shared financial goals and individual spending habits.
  • Discuss savings goals in the context of your joint goals, such as buying an investment property or planning for a family holiday.
  • Address debt management strategies that consider both of your incomes, expenses, and debt repayments.
  • Explore investment options that reflect both of your risk tolerances, investment preferences, and long-term financial objectives.
  • Collaborate on long-term financial planning, including retirement goals, estate planning, and building a financial legacy for your children.

With Your Children

  • Use your budgeting discussions to teach your children about basic money management skills, such as budgeting for pocket money or saving for a toy they want.
  • Discuss savings goals with children by linking them to specific milestones or achievements, such as saving for a bike or buying their first car.
  • Introduce debt management concepts to older children or teenagers and emphasise responsible borrowing and the importance of avoiding high-interest debt that can get out of control.
  • Educate your children about investment basics through age-appropriate resources and activities, such as following the basic stock market results for their favourite companies like Dominoes Pizza or Apple. 
  • Involve all family members in long-term financial planning discussions, encouraging intergenerational discussion about everyone’s financial goals, values, and legacies.
  • By sharing both successes and setbacks, you can help your children develop a healthy understanding of money management and resilience.

With Your Friends

  • Financial conversations with friends may revolve around shared expenses, budget-friendly activities, and supporting each other’s financial goals.
  • Share savings goals with your friends for mutual accountability and support in achieving financial milestones, such as saving for a group trip or starting a business together.
  • Discuss debt management strategies in a supportive and non-judgmental manner, offering resources or advice based on everyone’s individual circumstances.
  • Exchange investment insights and experiences with friends, considering each person’s risk tolerance, investment horizon, and financial knowledge.
  • Have long-term financial planning discussions, exploring shared goals, and opportunities for growth and greater financial independence.
  • When discussing debt with your friends, consider sharing tips for prioritising debt repayment, negotiating lower interest rates, and avoiding excessive debt accumulation.
  • Avoid comparing financial situations or making assumptions about each other’s financial capabilities.

With Your Colleagues

  • Financial conversations in the workplace may include salary negotiations, retirement planning, and discussing company benefits.
  • Discuss savings goals with colleagues within the framework of career milestones, retirement planning, or financial wellness programs offered by your employer.
  • Share insights on debt management strategies relevant to the workplace, such as managing student loans or paying for your own professional development.
  • Exchange investment ideas or participate in workplace investment clubs to explore collective investment opportunities or retirement planning options.
  • Engage in long-term financial planning discussions with your colleagues such as career transitions, retirement timelines, or the financial implications of your workplace benefits and incentives.
  • Approach financial discussions in the workplace with professionalism and discretion. Respect confidentiality and avoid discussing sensitive financial matters in public settings.
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Questions to Start Money Discussions

Money discussions are not always about numbers, they’re about values, priorities, and future goals. By asking these questions and encouraging honest, non-judgemental responses, you can have meaningful financial discussions with those around you.

    • What are your priorities when it comes to spending money?
    • How do you differentiate between needs and wants when it comes to spending your money?
    • Are there any recurring expenses that you feel could be minimised or eliminated to help you reach your financial goals?
    • What are your short-term and long-term financial goals, and how do you plan to achieve them?
    • Are there any dreams or aspirations that you’ve haven’t pursued due to your finances?
    • What are your biggest financial fears or anxieties, and how do you cope with them?
    • Have you ever faced a financial setback or challenge, and what did you learn from the experience?

Overcoming Challenges in Financial Conversations

Having money conversations can sometimes be met with challenges that can hinder your open communication and mutual understanding. Here are some common problems and strategies for overcoming them:

Differences in Financial Literacy

  • Not everyone has the same level of financial knowledge or understanding.

    Tailor your discussions to the other person’s level of financial literacy. Use simple language and avoid jargon or complex financial terms. Provide educational resources or offer to explain concepts in more detail if needed.

Discomfort with Sharing Financial Information

People may feel uncomfortable discussing their financial situation due to privacy concerns or fear of judgement. Money conversations can evoke complex emotions such as shame, guilt, or anxiety.

Create a safe and supportive environment where they feel comfortable sharing without fear of criticism or scrutiny. Emphasise confidentiality and assure them that the goal is to support and learn from each other, not to pass judgement. 

You can also gain empathy and understanding by sharing your own financial experiences and vulnerabilities. Lead by example and demonstrate your own vulnerability, which can encourage others to open up. Focus on finding solutions and offering your support rather than dwelling on their past mistakes.

Cultural and Social Norms

Cultural or social norms may influence others’ attitudes towards money and what is considered acceptable to discuss openly.

Respect cultural differences and be mindful of sensitive topics. Approach your financial discussions with sensitivity and be open to learning from diverse perspectives. Encourage them to share their unique cultural or social perspectives on money.

Resources for Learning How to Talk About Money

Learning how to talk about money is essential for building strong relationships and ensuring your own financial well-being. 

Finance expert, Vanessa Stoykov, has a wealth of education on her website which can teach you how to talk about money more confidently including ways to educate your children and how to work towards your dream life. 

Have a free chat with our friendly brokers about loan and finance options. We would love to help you and your family navigate any tricky financial conversations with options you might not even know are out there!