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The importance of talking about money with your family: a guide

8 minute read

It used to be a taboo subject, but money talk doesn’t have to be uncomfortable…

Money is a topic that many people find awkward to discuss, even with – or particularly with – their own families. However, talking about money is essential for financial wellbeing and a well-planned future. Not just for you, but for your family and all your futures.

Talk to your kids about money and how to manage it

Teaching children about money from an early age is a valuable life lesson. Educate your kids about the value of money, budgeting, and saving. Encourage them to set financial goals, like saving for a special toy or an outing, which will help instil responsible money management habits.

Make changes to a financial situation that isn't working

Perhaps times are hard. In some families, financial struggles are often a well-kept secret. Instead of sweeping financial difficulties under the rug, openly discuss them with your family. Identify areas that need improvement and take steps to address them. This could involve cutting unnecessary expenses, consolidating debt, or seeking professional financial advice. And if it all feels too much, as the advice says, just do one thing. It all helps.

Talk about money management resources

Many resources are available in the UK to help families manage their finances better. Share information about reputable financial websites, apps, and organizations that offer financial education and advice. Encourage family members to take advantage of these resources to improve their money management skills.

Planning for your future, particularly your retirement, needn’t be a case of closing your eyes and hoping for the best. Why not try our free Retirement Health Check tool, see how your work-free years are looking financially!

Talk to other people about money

Engaging in conversations about money with friends and family can provide valuable insights and support. Share your financial experiences and learn from others' successes and mistakes. By discussing financial matters with trusted individuals, you can feel less isolated in your financial journey. And importantly, you could be doing the same for them too.

Get money guidance for yourself

Even if you consider yourself financially savvy, seeking professional guidance can be beneficial. Consider consulting a financial advisor to receive personalized advice on investments, retirement planning, and other financial matters. Sharing this experience with your family can demystify the process and encourage them to seek financial guidance as well.

The importance of talking about money

Why is discussing money so vital? It fosters financial literacy, transparency, and empowerment. Here are some compelling reasons to prioritise these conversations:

Financial Literacy: When families openly discuss money, they have the opportunity to educate each other about responsible financial practices. This can lead to better financial literacy for all family members.

Passing on Knowledge: Older generations can share their financial experiences and knowledge with younger family members, ensuring that valuable lessons are passed down.

Goal Setting: Conversations about money can help families set and work towards financial goals, whether it's saving for a dream vacation, purchasing a home, or planning for retirement. This not only helps with the immediate planning, but encourages future generations to engage in the same practice.

Budgeting and Saving: Talking about money encourages the development of budgeting and saving habits, which are essential for long-term financial stability.

Emergency Planning: Unexpected expenses or emergencies occur, we all know this. And talking about how to shore up against these things can really make a difference if and when they happen. This can provide a sense of security and peace of mind, as well as the ability to deal with the problems head on.

Avoiding Debt: Open conversations about money can help everyone understand the risks of debt and make informed decisions to avoid it. There’s no shame in facing debt, particularly after we’ve all been through some rough times. Don’t hide away, ask for help. Talk it out.

Strengthening Relationships: Money-related stress is a common cause of family disputes. Open communication about finances can reduce tension and strengthen family bonds. And it’s particularly important when planning for legacies, will-writing and so on.

Checklist for demystifying money

To make discussing money more accessible and less intimidating, here's a checklist of things you can do within your family:

Regular chats
Schedule monthly or quarterly family meetings to discuss financial matters openly and transparently, together.

Share financial goals
Encourage each family member to share their financial goals, whether short-term or long-term.

Educate and inform
Share financial articles, books, and resources that you've found helpful with your family and encourage them to do the same.

Create a family budget together
Develop a family budget that outlines income, expenses, and savings goals. Involve every family member in the process. Understanding where money is available or not can head off some challenging conversations down the line.

Encourage savings
Probably one of the most important factors for everyone! Establish a family savings plan and discuss strategies to meet those savings goals.

Seek professional guidance together
If necessary, consult a financial advisor as a family to address any complex financial issues or concerns. This might be about planning legacies and trusts, managing loans within a family – say, for a first mortgage, or settlements. It could also be about debts or other issues.

Celebrate financial milestones
It’s not all heavy weather! Acknowledge and applaud financial achievements within the family, no matter how small. Find ways to celebrate that don’t cost money!

Don’t let money become a dirty word

By discussing money-related topics with your children, partner, or other family members, you can collectively work towards financial goals and a more secure financial future. Use the checklist provided to demystify money and make it a subject that is easier to discuss, enabling your family to thrive financially.

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