Why is discussing finances with your family so difficult?
1. Talking with Your Partner
Bob and I came into this relationship with a transparent mindset towards all aspects of our relationship, so it really helped with communicating about money.
We recommend weekly, open, and honest financial discussions between partners. It’s always recommended to have no secrets, regardless of the subject, but your finances are extremely important to be open about.
Some examples of how to start a conversation with a partner are, “this is really important to me. When would be a good time to talk about this?” Or “I’m really excited about the life we’re building together. Can we also work on discussing financial plans for our future?”
Discussing finances is a crucial part of a lasting relationship. The two of you can sit and start a budget, maybe log all your information into a budgeting app, like MINT. Then sit weekly and discuss the information and how the past week went. For instance, what parts of the budget were easily met and what parts weren’t. Then make the necessary corrections.
Working together and having the same financial goals allows a relationship to be less stressful. If your relationship is new, start now. If you’ve been together for many years, start as soon as you can. Force the conversation if you have to and compromise where necessary to reach an agreement.
2. When to Start With Your Children?
“No one is born knowing how to drive a car, it is a taught skill. Likewise, no one is born knowing how to handle money. But we aren’t taught that.”
Dave Ramsey – Total Money Makeover
I think it’s never too early to start teaching our children about money.
From an early age, I knew we couldn’t afford the fancy things that my peers had, but my mom never explained to me why. I whined, cried, and eventually, resented her for it.
There are some people that think that a child shouldn’t be paid to do chores. They believe that the children should help out because they’re members of the family. I can’t say whether that it was a good idea or not but I actually paid my daughter for good grades (I went broke). Good idea or not, it taught her the value of money and that money was earned.
Some examples of money-earning lessons include chores, random yard work, helping with younger siblings, etc. Gamification can also be an ideal way to communicate money to children. If your family is into board games, you can play Life, Monopoly, etc. Or there are many online games that you can find with a simple google search.
My daughter and I went out for girls’ day quite often, which we valued, but when I couldn’t afford it, she understood. As she grew up, she had her own money to spend. When she wanted something that I didn’t think I should buy her, she bought it. By the time she wanted her first car, we worked together. Her choices were, we could take $1000 and buy a piece of crap, or we could use it as a down payment and finance the rest. She paid $100 of the $218 car payment every month for two years until it was paid off. It was a $6k car and we financed 5k, and it lasted her through college!
3. What to Teach Your Adult Children.
What I didn’t teach my daughter soon enough was the importance of scholarships and grants for college. Unfortunately, she graduated with quite a bit of student loan debt and we’re helping her in any way that we can.
Sometimes it doesn’t even make sense to go to college. When a young adult can make a comfortable income doing something that they love without a degree, it’s well worth it not to go. There are hundreds of college courses and trade schools that teach young adults skills and how to get a job with those skills. Some of them are free, and some earn them a certificate.
Once they’re done with school, they need to earn an income. Once they start earning an income they should start investing for their retirement. It’s never too early to start thinking about retirement. I’ve heard people say that it’s part of being an adult, but if we don’t teach them, no one will.
One of the hardest parts about teaching our adult children about investing and thinking about the future is not preaching about it. A lot of them don’t want to hear it. So our last resort is to do it ourselves and share. Share with them the new accounts you’ve opened, how much it’s earned or how calm you were during the drops.
Share anything that you’re excited about!
Once they start asking, lead them to the podcasts that you love, lead them to the websites and other resources that you love. And sit with them as they open their employer-funded 401K. Teach them what the different things mean but let them make the decisions about how to invest. They’re adults now.
