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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?
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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.
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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.
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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.
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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.
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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.
“Talking about money means that you are obsessed with it.”
Aww it’s that so bad?! “….most people operate somewhere in the middle.”
Yes that’s very true. Especially when it comes the salary, I’m glad sites like glassdoor are open and save data on this.
I’m with you Lily!!! I love that there are sites like Glassdoor that break some barriers when it comes to salary discussions and allow folks to better gauge what they should ask for.
Communication between spouses on finances can be a HUGE win for a marriage!
Brad – Financial Life Planning recently posted…How To Crush Your Debt With the Debt Snowball Method
I totally agree with you Brad!!! You gotta be able to talk with your spouse about finances otherwise I’ve seen some serious issues arise 🙁
I think one reason people don’t like talking about money is because they feel judged for how much they make or spend.
If you make a good income and can wow other people, I think it won’t be too bad to reveal your number.
But if you don’t, other might pass weird looks or consolation comments your way, which might get awkward and even upsetting. Same for taking about weight.
Ms. Frugal Asian Finance recently posted…5 Things I Regret Buying
You’re absolutely right Ms. FAF!!! I think one of the things that I had to get use to in the government was everyone knowing your salary. People would ask what your “grade” was and that would basically say how much you made. Definitely different from the private sector.
When it come to talking about money, I think that we need to leave a few thing at the door like our egos and judgement. The whole point about talking about money is to share successful tips and tricks with the people that we care about and encourage others to practice responsible money management.
If we start comparing, most likely, the conversion will end in resentment and jealousy.
Leo T. Ly @ isaved5k.com recently posted…How To Train Your Money Skills Like An Elite Athlete
I totally agree more information is usually better. Especially if you don’t have an ego and don’t have jealousy issues 🙂
Outside a family unit, I’m not sure if talking about money is all that important. Maybe to share experiences and advice, but one needs to be careful, since not everyone has the ability to effectively advise on the matter of money. Tom
Tom @ Dividends Diversify recently posted…Timeless Investing Principles
Those are great points Tom!!! Not everyone is skilled in effective money communication and it could come off wrong, especially if the right tone isn’t taken. Excellent thought process!!!
Yeah, I don’t talk about money in real life as people and very judgy, and I don’t want to come across as a jerk.
Ms ZiYou recently posted…Sunday Short #3 – Appreciation
Fair enough. I can totally understand that 🙂
I have to agree with my peers above that there are valid reasons why talking about money is taboo – the main one being that people use it as a personal yard stick to measure success and worth. Even if we don’t personally see it that way, there’s unfortunately no way to guarantee that you will always be surrounded by like-minded people. Unfortunately conversations about money are seldom safe or navigated constructively amongst our peers. I whole-heartedly agree with your opinion that limiting conversations to a few successful people (at least initially) can be a great way to engage and initiate constructive conversations.
Money is definitely a potential landmines. While some people appreciate talking about it I know that others don’t want others to know everything. I had a buddy that refused to discuss anything when it came to money and a lot of folks were worried he wasn’t doing well. Turns out he was doing exceedingly well but didn’t want to rub it in our faces.
My wife and I are pretty open with our Money and finances. It’s helped us to stay on track in terms of budgeting and investing. I talk to friends about money ideas but not about personal finance situations specifically.
SMM recently posted…Why I Like ETFs And You May Too
I hear ya!!! I feel like some people want to really deep dive while others want to stay at arms distance when discussing finances. I usually just roll with the punches 🙂
The people who comment on this blog certainly seem to have been raised differently than I was.
My parents taught me not to talk about my finances for security reasons.
A co-worker who sat next to me kept spare change in a desk drawer; maybe $40 dollars total. I would occasionally ask him to make change for the vending machine. It got to the point where I would just put the dollar bill in the drawer and make change when he wasn’t there. One day he told me that a few years earlier someone had stolen the change from his drawer. I work in a secure area meaning restricted card key access. Not everyone in the company can access my work area, only a small subset. It was most likely one of our departmental co-workers who stole the money. The department was about 40 employees and these are well-paying jobs. It made me think that someone I work with is nothing more than a common thief. Do I want to be sharing my personal finances with that person? Since I didn’t know who the thief was, any departmental member I spoke with could have potentially been the thief. If that doesn’t make you a cynic I don’t know what will.
When you think about it, how much do you know about your neighbors, co-workers, classmates, congregants, et al.? Talking about your finances (especially if you are relatively successful) with specificity to enough people will likely result in someone trying to defraud you or worse. The other reasons listed are valid but frankly, you shouldn’t be too concerned about other people’s opinion of you. In the workplace, this can be problematic because you shouldn’t care what co-workers think about your personal life but at the same time, you need to care about their opinion of your professional abilities.
I have often wondered if there was a guy like MSM in my office, would I share my personal finances? Probably not.
Thanks for sharing Dan!!! I don’t think most of my co-workers know how well or for that matter bad with my finances. I think they think I’m knowledgable to bounce things off of. IE…explain how bitcoin works, what do the various funds in the TSP mean, etc. I’ve done a couple of deep dives with co-workers but it’s pretty rare compared to the various pop up finance question.
My coworkers and I have begun to talk more and more about money, and although we all have different opinions sometimes, it has really helped me put different things into perspectives.
The interesting part has been different family structures and also habits when it comes to family. Some people readily admit to living paycheck to paycheck, some people save as much as they can in savings accounts. I find it so unfortunate that people don’t know what to do with their money when there are so many great resources out there!
I am fascinated with the psychology of people with money. I could talk about it all day as I’m always trying to learn and understand why people do what they do. I love hearing the decisions people make and why. I have a friend that thinks the stock market is too risky but thinks nothing of gambling in vegas 🙂
Most people aren’t comfortable talking about their finances especially aging parents. I’ve experienced this a few years ago with my parents. They kept me in the dark with their finances because they don’t want to become a financial burden to me. I think that’s another reason why people don’t talk about money that often. Luckily, I initiated the talk early and we were able to come up with long-term solutions for their future retirement needs.
It really pays to check up on your parents’ finances because you might end up paying for their retirement needs like healthcare or long term care expenses, which can wipe out anyone’s retirement savings. While there’s still time, help your parents prepare for their future by making sure that they have health insurance or long term care insurance, which can greatly help in covering care expenses later on.
Samantha Stein recently posted…Family Caregiving: Coping with Emotional and Financial Toll
Thanks for sharing Samatha!!! Those are great points and are not talked enough about. Communicating with family members is a great way to make sure things are in line before they go out of control.
I believe many people do not like to discuss their money situation in the open because they don’t want to be embarrassed and judged upon. With friends and family, whenever a money discussion comes up its mainly about how the stock market is doing and lately the bitcoin craze but really not about our own finances.
I think the ones that are really close to you like your significant other and/or your kids are the ones that you should be comfortable discussing about your money situation because it’s their money situation as well. With kids especially when their really young, you can provide teaching lessons about money so they will know about savings and eventually the power of compounding.
Kris recently posted…Making the Most of the Library
Thanks for sharing Kris!!! I would definitely love to teach my kids as much as possible about the stock market and passive index funds. I want them to know more than I do. As you know, time in the market is more valuable than timing the market 🙂
Interesting, why is it so taboo to have a casual conversation about money with others? We talk about so many other things casually, so why not money? I think you hit a lot of major points on the head in this article for reasons why. People are afraid, people aren’t comfortable, and most importantly, people don’t want to be judged about their spending habits. Let’s be honest, we all do that. The minute someone says they spent X dollars on something we immediately think it is a waste, this is without asking about whether or not they budgeted for it, is it their passion, or why that purchase was so important to them. Conversations would be so much better and productive if the judgment was taken out of it and if both sides feel like they are having a conversation rather than being lectured by a saver about how to save better. Just my two sense. Great article Mustard Seed Money.
Bert
I totally agree with this. People need to be more open about their finances. Talking about money issues with other people will open your mind. It is so strange that we spend most of our time worrying about money, earning money, trying to save money to grow passive income, yet we don’t want to talk about it.
I totally agree with you Rohan!!! It’s mind blowing the things we’re willing to talk about in person but not money 🙂
It’s funny what a taboo subject money still is. We seem more relaxed talking with friends about our sex lives than our financial lives! Everyone has quite different ways of handling/spending/saving money and the is quite a bit of implicit judgement that might come in a conversation about it. There have been times though that I’ve chatted with friends much older than me that I’ve learned tons from them, about saving, patience, their experience etc – the more we can talk openly about it though the better.
I totally agree with you!!! We find mentors at work to help guide our career. Wouldn’t it make sense to find a financial mentor 🙂