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What’s in your wallet: Family talks

watering dollars

By Joel Dresang

Our daughter was holding back on a permission slip for a school trip. When we asked her why, she said she didn’t really need to go, and she questioned whether we could afford it. The message to me was that we needed to communicate better about our family finances.

In most families, money talk is taboo.

The latest in an annual survey of parents found that more than two-thirds of them were reluctant to discuss financial matters with their children. About a third were “extremely reluctant.” Overall, parents are about as comfortable talking about money as they are talking about death.

A biennial survey of retirement-age parents and their adult children shows similar communication gaps.

According to the surveys, parents who talk regularly about money raise children who are more confident financially. And more than 90% of the retirees and their children who discussed finances said they felt much better afterward.

My daughter’s field trip is through her high school theater class. They’re going to Chicago to see three plays over a weekend in May. The cost: $275, including transportation, meals, an overnight hotel stay and theater tickets. Yes, we can afford it. My concern is that she assumed that we can’t.

What might have thrown her off is some extraordinary expenses we’ve had this year. She already has taken a part-time job and earns babysitting money to pay back her share of a couple of other trips we’ve helped support.

I thought I have been teaching my daughters that when money is a factor in a decision, it shouldn’t be the first consideration. Often, it should be one of the last because it lends itself to creativity. Money is rarely a matter of “yes-or-no” and more frequently requires a “What would we give up to afford this?”

As we dream and plan and make decisions in life, it helps to have a sense of what we can afford – whether it’s holiday gift shopping or determining when to retire. Part of that context involves having a handle on our family’s finances. That involves communication.

I have read dozens of articles recently (scores over the years) of how to talk about money with one’s family. A lot of the advice addresses either teaching young children or dealing with elderly parents.

For those of us in between, here are some tips I’ve distilled:

  • Take questions. Start by inviting your children to ask what they want to know. Encourage open discussions by having a dialogue, not a monologue; a Q&A, not a lecture. Ask questions of them and listen to what they say.
  • Answer honestly. Listen closely to be sure you understand what they need to learn from you. Be to the point. Don’t tell them more than they want to know. If you’re sensitive about saying how much you make or how much you own, explain why. Find other ways to describe your income and wealth, such as noting the family expenses covered by your paycheck and what you do with any money left over.
  • Share values. Focus on what money means to you as a family. Discuss priorities, what you hope to achieve with what you are earning and saving, what responsibilities and challenges stand in your way and what you plan to do about them.
  • Use examples. Part of encouraging an open conversation is sharing your personal experiences and the lessons you have learned. If you rue not starting your savings earlier in life, say so, and explain how you have been trying to make up for it.
  • Pace yourself. Don’t make this a one-shot everything-you-need-to-know event, or you’ll never do it. Open the door. Start the conversation. Questions and circumstances will change. Invite your children to resume the discussion whenever they wish. Bring it up again around major transitions in their lives. Give them periodic updates on your progress.
  • Get help. At times, it’s beneficial to meet with a trusted advisor outside of the family, especially when it comes to discussing long-term plans or making arrangements that require professional expertise.

We have three daughters, ages 24, 20 and 16, and I’m glad the youngest has reminded me to revive this money talk with her sisters and her.

Everyone will be home for Thanksgiving and at semester break. I intend to take a moment with each of them to see if they have any questions about family finances – how much is set aside yet for their education, investments we made for them as children, our evolving plans for eventual retirement.

I want to know more about how they’re doing, what’s pleasing them, what’s keeping them up at night, how we can help. I’ll remind them that our love is unconditional, our emotional support infinite and our financial backing limited.

Some parents fear that talking about what they have will discourage their children from being responsible for their own financial well-being. I would rather show them what my wife and I are doing for ourselves and the narrow safety net we have available for them. That way, they can dream and plan and make decisions with a little more clarity.

Learn more
Parents: Put your retirement firstby Brian Kilb
Tough Love 2: Parenting your parents, by Brian Kilb
Student loan debt impact, by Paige Radke
When Should I …check my beneficiaries? by Art Rothschild and Isabelle Wiemero
Plans to consider, by Lexie Brown
How to talk to aging parents about money, by the Financial Industry Regulatory Authority

Joel Dresang is vice president-communications at Landaas & Company.

(initially posted November 17, 2017)

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