It’s Time to Talk Finances
In many families, money is often seen as a difficult, taboo topic. People are more comfortable talking about politics, religion, or even death. However, being open and honest about money is necessary for financial wellness. And most people want to talk about it. According to a survey from Turbo, more than half of Americans—52%—wish they had learned more about topics related to dealing with debt while growing up. Discussing key money concepts like saving for the future, budgeting, paying off debt and managing assets will help your entire family become more financially literate. A study published in the Journal of Economic Psychology found that having parents that taught and modeled good money habits corresponded with healthier financial behaviors, such as less impulsive spending and lower levels of credit card debt.
How to Talk About Money with Your Kids
When it comes to having meaningful conversations about money with your kids, start early and frequently. Instead of just talking about money, show your children through your actions. For example, you can show them how you budget, openly discuss how you’re saving money for a new car or set some money goals together as a family. Get your kids started on their path to financial literacy by paying them for age-appropriate chores around the house and encouraging them to save the money they’ve earned with a kid-friendly savings account. The Minor Savings Account from Stellar Bank is designed for the youngest saver in the family—with a $25 minimum opening deposit and no quarterly maintenance fee.
As your kids get older, you can discuss more complex financial matters like investments, insurance benefits and long-term financial planning goals.
How to Talk About Money with Your Partner
The number-one issue couples fight over is the same topic most people love to avoid—money. In fact, a T. Rowe Price survey revealed that 40% of people keep financial secrets from their spouse or partner. However, when it comes to money and relationships, communication and transparency are key. High levels of debt, lack of communication, and money-related issues are frequently cited as some of the top reasons for separation and divorce. So it’s important to be open and candid about money—how much you make, how you want to spend it, how you want to save it and what your long-term goals are—and make decisions together.
How to Talk About Money with Your Aging Parents
While it may feel awkward at first, it’s important that everyone in your family understands what is going on from a financial standpoint. Consider hosting a family meeting to talk about money while your parents are still physically healthy and living in their own home. Discussing their financial situation and estate planning while they are able to communicate their wishes can give them peace of mind while clarifying important legal, financial and health care issues—and any assigned roles such as power of attorney. Having this discussion proactively, instead of reactively, can help reduce stress and anxiety while avoiding complications later on.
Get more tips on having family conversations about money at the Stellar Bank Financial Education center.