“How much money do you make?”
If that question makes you uncomfortable, you are like most Americans who believe money is a taboo subject, much like politics and religion. However, the Millennial generation may be changing this ideal.
As a Millennial myself, I can attest to the fact that my generation likes to shake things up, test boundaries, and throw tradition out the window. We’re also generally more open to discussing finances because of what we have seen, learned, and experienced. In childhood, we witnessed our parents and grandparents navigating through the 2008 financial crisis. In school, we received more formal personal finance education than any other generation1. In adulthood, we are living with massive student debt that averages more than double that of the previous generation.
Millennials can’t afford to be silent about our financial insecurities. So, why is talking about finances a good thing?
1. Knowledge Is Power
Millennials who have conversations about money say they do so because it helps them learn more about managing their finances and they can help others by teaching what they know1. Because I work in the finance industry, I like to share my financial knowledge with my friends and family if I know they can benefit. I even learn from others, because everyone handles their finances differently, and there isn’t necessarily one right way. There is no harm in learning about different budgeting, saving, and debt reduction strategies. At the worst, you may learn what not to do and be able to share something that worked for you.
The best part about sharing financial knowledge is that it doesn’t have to involve dollars and cents (e.g., salaries or debt). I like to share with others that I budget by paying myself first, meaning that I make savings a priority. Although savings goals will be different for each person, reverse budgeting can be implemented by anyone.
Why do people hire a personal trainer? The obvious answer is to utilize the trainer’s expertise, but people also get someone to hold them accountable for their progress (or lack thereof). The same can be said for talking about money with a trusted friend, family member, or of course a financial advisor. I talk openly with my parents and close friends about how I am paying down my student debt and utilizing resources like BrightPlan to track my financial goals. Having someone to talk to and celebrate milestones with gives me more motivation to reach those money goals. Even if you have conversations about your lack of progress, friends and family can give you guidance and confidence to get back on track.
Again, this accountability doesn’t have to come down to a specific dollar amount to be valuable. For example, I plan to pay off my student debt in five years. I use my Debt Reduction goal on BrightPlan to track my payments and hold myself personally accountable and then I tell my family and close friends about my progress often without explicitly saying how much I owe or how much I am paying every month.
3. Happy Relationships
Money can be one of the biggest strains on a romantic relationship. Having frequent open and honest conversations about money and financial goals helps to avoid this conflict. Currently, on a weekly basis:
- 75% of Millennial couples talk about money
- 66% of Gen-X couples talk about money
- 44% of Baby Boomers talk about money
Experts say that this openness is correlated with happiness in a relationship. Eight in 10 couples2 across all generations who talk about money at least weekly report being happy in their relationships. Even more valuable is having money conversations early on. Learning about your partner’s financial situation and goals in the beginning helps prevent conflicts from arising later on. To avoid the risk of getting too personal too quickly, these initial personal finance discussions should focus on broad financial values in order to discover if you and your partner are on the same page about your money.
Although there are many good reasons to talk about financial matters with your friends, family, and significant other, it is important to consider whether the other person is open to discussing money matters. The money taboo is still alive today, but I encourage you to consider how you may break that taboo in your own life however you feel comfortable.
Want to learn more about how planning for life can play into these conversations? Contact us to learn more about Plancorp’s fiduciary, financial-planning first philosophy.