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Talking about money is one of the most socially taboo conversations in American society. We are startlingly opposed to discussing our finances, even with spouses, children, or close family members. Consider the following statistics:
- Nearly 70% of Americans say they think it's rude or inappropriate to discuss personal money matters in a social setting.
- According to a survey done by Fidelity, 43% of respondents don’t know how much their partner earns, and 36% are unaware of the amount they have invested.
- Only 17% of parents with an income above $100,000 a year had told (or planned to tell) their children how much they earn or their net worth.
Kimberly Chong, an anthropologist who studies cultures of money at University College in London, points out, “In America, asking someone what they earn is considered taboo because you are indirectly questioning their personal worth.”
This aversion to discussing personal finances runs deep throughout our culture, but is it really serving our best interests? It turns out, getting over the feelings of awkwardness that come with discussing money with your family members can really pay off.
Candid conversations help facilitate a free flow of information that almost always benefits the people involved. The more comfortable you feel talking about money with your spouse, parents, and children, the more proactive conversations you can have about financial planning for your family.
In this blog post, you’ll learn some common reasons people don’t like talking about money from Brad Klontz, founder of the Financial Psychology Institute. You’ll also learn how to get over feeling awkward about discussing money, so you can start making better-informed decisions about your family’s financial future.
Why We Don’t Like Talking About Money
In a recent article, Brad Klontz provided insight into the psychology behind our collective aversion to discussing our personal finances—even with members of our own family. He posits that there are a few underlying psychological drivers at play:
1. Protecting Your Social Status
It’s an uncomfortable thought to lean into, but not talking about money may be based around concerns with protecting your perceived social status. Displaying wealth has been ingrained into our social consciousness at various levels throughout human history. As a society, we have evolved to respond to displays of financial success favorably, while we tend to feel shame about our financial struggles.
“Money is very tightly linked to our status,” Klontz says. “We like to disparage the whole idea of people trying to show status, but it’s an ingrained human characteristic. Your concern over your status is one of the reasons you’re alive right now, because your ancestors passed this onto you. Where we rank in our group and how we form our relationships comes back to status, which in modern times is often related to how much — or how little — money we have.”
2. Fear of Judgement
Not talking about money is often the safest route to take in social settings because people tend to feel anxious about how others perceive them based on how much money they make. “Either I’m worried you’re not going to like me because I have too little, or you’re going to judge me because I have more than you,” Klontz says. “So we’re very hyperaware of how other people might be looking at us around money.” He notes that this is why it’s common for people to gather in groups with others who have a similar net worth—it allows people to feel less anxious about being judged.
3. Sticking to an Inherited “Money Script”
When it comes to our comfort levels around discussing money, there is an element of nature vs. nurture at play. According to Klontz, “If your parents pushed the narrative that talking about money wasn’t appropriate, it’s because they felt anxiety around it themselves—values that were passed onto you, whether you realize it or not. Then, as you got older, these ‘money scripts’ played a loop in your head."
Why It’s Important to Flip the “Money Script”
Bringing up personal finances with family may be awkward, but it’s worth pushing through the discomfort to be able to proactively plan for the future. If you want your children to be more financially literate, start by talking openly with your kids about how much money you make. If you’re getting serious with a partner and want to start building a future together, start talking about money early so you can get on the same page about your financial goals.
Estate planning is another example of why it’s important to flip the script and start having open conversations with family members about your (or their) estate. An estate plan is created to help prepare for the transfer of your wealth and assets after you are gone.
Making informed and timely decisions about your estate could help reduce taxes that may have to be paid at death and preserve the estate’s value. Proper estate planning can ensure that you or your loved ones minimize your estate tax bill by as much as the law will allow.
Having open discussions with your loved ones about your estate plans now can help ensure a peaceful transition of your wealth and property after you pass—which means your loved ones won’t need to worry about fighting over material possessions while they’re going through the grieving process.
Having the tough conversations in life can help prepare us for its ups and downs, form tighter bonds of trust between family members, and help us make the best-informed decisions for our futures.
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