How Can I Have a Positive Money Chat With Friends?
Please remember this is not financial advice!
☎️ Today we answer an anonymous question. Our listener says she finds our podcast and workshops helpful but wishes her female friends and family would be equally keen to discuss money matters. Broaching the topic of money can feel tricky, so I invited Wealth Coach Sara Maxwell to discuss how to best open up the conversation in a positive and uncontentious way.
💥Today on The Wallet:
1️⃣ For many people, talking about money can feel extremely uncomfortable, so we look at the reasons why that is and how we can overcome our money-related fears.
2️⃣ There is often a tendency to procrastinate when it comes to addressing our personal finances, so Sara shares her tips on how to motivate yourself and tackle that money to-do list.
3️⃣ We also discuss the role that money plays in people’s happiness, as well as how to start a conversation about money and investing with friends (without the shame!).
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why is money a taboo?
A lot of our discomfort surrounding money comes from the beliefs we were brought up with, such as messages we received as young children. There are a lot of assumptions that are handed to us about the embarrassment of talking about money.
We all have fears of judgment, and money seems to be a huge subject where people can carry a lot of shame about.
It’s not just people who are in debt or feel that they don’t earn enough money that experience money shame — those who earn a lot of money sometimes feel uncomfortable discussing it, too, primarily because they might not know what to do with it and feel a huge burden of responsibility.
Everything related to money is very tightly wound, which is why we end up not talking about it at all.
The stories we tell ourselves about money can be very far-ranging, from ‘as soon as I have money, it’ll be gone’ to ‘I will never have enough money’. Throughout our entire lives, we’re given beliefs that are not necessarily our own.
We’re often unaware of these beliefs and until we start to question them and asking ourselves whether they’re at all useful to our lives, we will continue unconsciously living them out.
Noticing your beliefs about money is a very important step. While some beliefs are very useful, others are not useful and can hold you back.
Sara suggests drawing out your finances on a piece of paper and putting it into shapes. For example, you can draw a circle for your debts, a circle for anything you own, etc. It’s a useful way of seeing everything in one place because it helps you confront your financial reality.
Having all your figures in one place also helps you prioritise what you want to work on.
stop procrastinating
When it comes to addressing your finances, it’s useful to set a regular date in your diary where you make the space and time to go over your numbers in a focused way.
To really get into the habit of addressing your finances regularly, try to make the steps very small so that they are easy to do. The compounding effect of regular, small habits, once stacked together, is better than setting one-off massive tasks for yourself.
Once you get into the habit of understanding your money better (for example, by setting yourself a small task of reading one article about pensions a week), you’ll find yourself wanting to read more about the subject, and engaging with your money on a deeper level.
Working with a financial professional can also help you ‘tear the band-aid off’, especially in the earlier stages.
Get yourself an accountability partner to keep each other motivated.
Reflect back and keep track of your progress. This will help you acknowledge how far you’ve come and how much you’ve achieved, and celebrate the work that you’ve put in!
Money can bring joy, but you need to figure out what is important to you. There isn’t a specific figure or level of money that is the ‘perfect’ amount that will make you happy — you need to understand what will work best for you, rather than following the ‘shoulds’.
start the conversation
Starting the conversation about money doesn’t have to necessarily be about the big numbers (like your net worth or salary), instead, it can be about how you feel, what you’ve learnt, or what apps you use.
Setting up the conversation to feel safe for the other person is very important. You can say something like, “I won’t judge you for what you say, let’s just have an open conversation.”
If you’re in a couple, you should explore each other’s relationships with money — very often, people make assumptions about their partner’s money beliefs, but when they start to discuss them they come to realise that they are in fact very different.
Sometimes, it’s helpful to be mindful of the jargon we use with other people. For example, saying something like “what’s your pension plan?” can scare people away, but when you ask something like, “what do you see your future like, when you’re retired?” the person might be more open to having that conversation.
Sharing why something has been great for you is much better than telling someone what they should do. Test the temperature in the conversation — because if someone is not ready to think about it, no matter how hard you try, they just won’t talk about it.
It’s also important that the person you’re having a conversation with understands that you’re not attempting to pry and that you acknowledge that the person you’re talking to might have completely different goals from yours.
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