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In mixed company, those of us who are cautious typically tend to stay away from topics of money, sex, politics, and religion. Each, in their own way, can be very offensive to people. It’s just best to avoid those topics, right?
I think most people miss this memo in the internet. It seems like the wild wild west when it comes to speaking about all things taboo. While I don’t agree with everything I read, I am thrilled to see people talking about money online.
Guarded about Finances
In 2017, LearnVest conducted a survey regarding Money Habits and Confessions. It found that 80% of Americans have had serious discussion about finances with their partner. Admittedly, I would hope that this figure would be a little bit higher, since this is potentially a life partner. Personally, I think nitty gritty details are necessary in this case.
While people are willing to share about their finances more and more online, it’s still interesting to see how taboo it is to discuss money in person. The investing app Acorns recently found that 68% of people would rather talk about their weight than money. In fact, when I graduated from college, none of my friends were willing to share what they were making. Everyone spoke in generalities.
Truthfully, it took awhile for me to get my financial footing. At the time, I didn’t even think to learn more about finances online. It wasn’t until my brother-in-law introduced me to Get Rich Slowly that I found an online financial community.
Why don’t people talk about their finances?
They can be self-conscious when it comes to money.
They may be embarrassed that they are worse off than others. Or, they may be afraid to rub in their financial situation to others. Either reason can easily cause people to be secretive about their financial situations.
They don’t like being judged when it comes to money.
Nobody wants to be told how to spend their hard-earned money. In the words of Tom Haverford (from Parks and Rec), people should be able to “Treat Yo Self.” They don’t want to be held accountable or for someone to highlight any bad spending habits. I once met with a woman who asked me to take a look at her budget to see if there were any areas that I thought she could trim back. Immediately, I noticed that she spent $1,000 on restaurants each month. I asked her if this was an area that she could cut back on. She shot me a look indicating a big N-O. She then proceeded to explain that restaurants are part of her entertainment, and if she scrimped on that, there wouldn’t be any point in living. Dramatic much? This was obviously a bit extreme, and clearly we weren’t seeing eye-to-eye. What’s the point of the story? Sometimes when we hear from well-intentioned people, it flies in the face of what we think is right.
They feel hopeless with their finances.
When people are just trying to make ends meet, why would they want to talk about their finances? I know a guy who is convinced that he is going to die walking the halls of the government building that we work at. He made some financial mistakes along the way and has gone down a spiral making the same poor decisions on a daily basis. Thus, he thinks there’s no point in trying to break free from his money troubles. For some, talking about money only reinforces the perception that they are doing terribly compared to others. And, they don’t want to be reminded.
They don’t want to come off as jerks.
During the great recession, I worked for the government, where fortunately, I had pretty wonderful job security. Unfortunately, a lot of my friends were not in similar positions and were terrified each day, knowing that any day could be the day when they received the pink slip. Even today, I have a friend that is doing really well. However, he is hesitant to talk about it as he is very young and afraid that people will try to tear him down because of his success.
Talking about money means that you are obsessed with it.
We’ve all heard about people who work 20-hour days and sacrifice home-life in order to make partner and set themselves up financially. On the flip side, you hear of people who eschew the corporate environment and would prefer to be one with nature. There is something romantic about forgoing money and living a nomadic lifestyle. Needless to say, most people operate somewhere in the middle, instead of the extremes.
How can you overcome your shyness about finances and even learn how to handle your finances better?
First, if you haven’t taken my Reaching FIRE course, it walks you through how to handle your finances and puts you on a path to reaching financial independence in a timely manner.
Talk to successful people around you.
Did you know that 80% of all millionaires today are first-generation millionaires? Ask the people around you at work how they make money, keep money, and grow their money.
I’ve found that successful people are all too happy to answer questions like these. People have shared with me how they bought their homes and what their retirement plans look like. In fact, I have received the best financial advice from successful peers. You’d be surprised how quickly a financially prosperous person will open up.
If you don’t know where to start, a great place to begin is simply talking with your friends. These are the people who should accept you no matter what is going on in your finances. Plus, if you are handling your finances really poorly, they should feel honored that you would come to them for some counsel.
Look for one or two close confidants to start sharing with. Once you feel comfortable sharing with them, look to expand your circle. Information is power, and the more you know, the better off you will be in the long run.
Include the Kiddos
Next if you have children, be open with your kids about your money decisions. Include them in paying the bills, explain why you’re investing the way that you are, and show them your monthly budget.
While you may think of this approach as teaching them, in reality, you are actually teaching yourself.
When I first started teaching my Reaching FIRE course, I thought that I knew finances down cold. I thought I understood all the material and could easily explain it to anyone that asked.
However, when it comes to teaching, understanding the material and teaching it are two completely different skills. Teaching requires you to delve down even deeper into the material. You must really grasp the material, instead of just understanding the concepts.
In turn, by teaching your children, you will provide a win-win situation for both you and your child. As you fully grasp financial concepts, your kiddo will hopefully soak up the information and learn the proper way to handle finances.
Communication and information are the keys to gaining a better understanding of your finances. While money may be a taboo subject, it doesn’t need to be, and more importantly, it shouldn’t be. The more education around this subject, the better off we all are in preventing mistakes simple mistakes.