December 2019 Monthly Insight – Money Talk With The Family

Posted By T. Lee Sherbakoff, CPA/PFS, CFP® on Dec 1, 2019


It was impossible to get a conversation going, everybody was talking too much.

Yogi Berra, Major League Baseball player, manager and Baseball Hall of Fame member

You’ve heard it said before—never discuss religion and politics. It’s easy to understand why. Some folks hold very strong opinions, and it’s easy to get swept up into an unwinnable argument. Interestingly enough, though, politics and religion aren’t considered the most difficult subjects to tackle.  According to a 2014 study, personal finances (44%) ranked ahead of both politics (35%) and religion (32%). And, in case you were curious, death came in at 38%, taxes at 21%, and personal health at 20%.

Not surprisingly, the study shows that 71% of adults learned the importance of saving from their parents. Yet, barely more than one-third of today’s parents report discussing the importance of saving money with their children frequently. Sadly, about a third have a hard time discussing money with their spouse or partner, and 25% often end up in heated discussions. So, how can we stop arguing and start a real conversation?

Money talk with your spouse

When discussing financial matters with your spouse, it’s important you find shared ground. Otherwise, you’ll be working toward different goals, and the risk of failure and frustration is high.

What’s the best way to talk about money with your spouse? Go on a date—a money date. Get out of the house, get away from distractions, and leave the kids with a babysitter. Here’s where you’ll discuss goals and craft a plan. Nothing is off limits. You may discuss retirement savings, large purchases, debt reduction, a down payment on a new home, or a plan for bolstering your savings. Yet, don’t overindulge. It’s one step at a time. Retirement savings may be the first topic. Or getting out from under credit card debt may be your first challenge.

After you come up with realistic goals together, make sure to check in with each other on a regular basis. When you accomplish a goal, reward yourselves.

Talking with aging parents

Many parents rarely discuss their finances with their children. Their parents didn’t share details, and they don’t feel obliged to break with family tradition. Surveys bear this out. One survey shows that 73% of Americans haven’t had a financial discussion with Mom and Dad. The survey found that respondents ages 45-54 were the most likely to say that they haven’t broached the subject because they are not comfortable doing so. That’s understandable.

So, here are some tips to help you get the conversation started with your parents:

  • Express genuine concern.
    • While money matters may seem difficult to explore, let them know you are having the discussion because you love them and want to be sure they are being taken care of as they age.
  • Tell parents “My financial advisor made me do it.”
    • One way to jumpstart the conversation is to point the finger at us, or another trusted advisor like your lawyer or CPA. “I was reading my newsletter from my advisor, and they emphasized the importance of having a conversation about finances with you.”
  • Elder fraud may be on their minds.
    • Scams that target the elderly (and for that matter, all of us) have exploded. None of us want our parents to become victims, because there is little we can do to undo the damage after a scam. Money lost will never be money recovered. Sharing articles on elder fraud is a good way to ease into the subject.
  • Discuss your own experiences.
    • Open up to Mom and Dad about your retirement planning, 401k decisions, debt payoffs, or student loans. Or, casually mention the new life insurance policy you have taken out. When you share something that is personal to you, your parents may become more willing to open up about themselves.
  • Make things easier.
    • Have you thought about helping your parents create a budget, set up automatic bill pay or online banking, or manage credit? Simply getting your parents to tidy up loose ends can pay huge dividends for them.

If you have questions, let’s talk. That’s what we’re here for. As always, we are grateful for your confidence in us to serve as your financial advisor. Happy Holidays and Happy New Year!!