Liz Koh is a money expert who specialises in retirement planning and another partner of ours through her company Enrich Retirement. Today we have chosen a rather interesting article that she recently wrote for another of our partners Lifetime Retirement Income on the importance of talking about money because it could help us get the maximum benefit from the money we have
The article is called: Money Talks. You can also read the article in full below...
When it comes to taboo subjects for conversation there are two biggies – sex and money. Both are considered to be very private matters however research shows that most people, if given a choice, would rather talk about sex than money.
Part of the reason for that is familiarity. People will often make jokes or share stories about intimate experiences and there is a degree of comfort in talking about these things among close friends.
However, money is different. It represents status and power. Money is very closely linked to our sense of self worth and how successful we are, and for that reason, there is great reluctance to share details that might reveal too much to others. We don’t want to be judged by others as being unsuccessful, nor do we want to be accused of bragging about our financial success. We readily have conversations about planning holidays, home renovations, or a new car, but not our financial plans.
Childhood experiences have a big influence on our relationship with money and many people have been brought up in families where money just was not talked about. In some families it is considered impolite or even rude to discuss or ask questions about money.
There is a cultural aspect to this. Some cultures talk about money much more freely than others. In my own experience living for period of time within a Malaysian culture, it was not uncommon for people to talk openly about their monthly earnings in the same way as you would talk about the kind of car your drive. Yet I grew up having no idea what my parents earned or what their financial situation was.
I suspect another reason for not discussing money is that it’s a subject that people don’t feel confident talking about. We have a long way to go to improve our financial literacy and showing our ignorance is not something we want to do. The use of technical jargon in the financial sphere is another barrier to money conversations.
Being reluctant to talk about money has a number of downsides. The most serious of these is a reluctance to seek help when financial matters are causing stress and anxiety. Nobody wants to be seen as a failure and being in financial difficulty can be seen as something shameful.
Reluctance to talk about money can also prevent people from getting advice that will help them manage their money better, even if they are not in financial difficulty. Worries about who to trust for advice can underpin this reluctance, along with fears of being judged or being seen as ignorant about financial matters.
It’s one thing to be reluctant to talk to friends or professional advisers about money, but when there is a reluctance to talk about money within a relationship there can be dire consequences. Arguments about money are one of the prime causes of relationship conflict and breakdown.
Conflict often stems from different beliefs about money and different values. When two people fail to discuss these different beliefs and values there is a lack of understanding of each other’s perspective. Instead of negotiating the differences to reach a compromise, an argument ensues about who is right and who is wrong. Yet when it comes to making financial decisions, there is no such thing as right and wrong so long as the consequences of the financial decision are considered.
The best way to ensure you and your partner are on the same wavelength is to set aside specific times to have conversations about money. How often this needs to happen will depend on your financial circumstances. If there are financial stresses, a weekly conversation may be required, whereas if there are no pressures, a catch up once every few months might be enough.
It is important to talk about money. It enables us to enjoy life. Our desires are unlimited whereas the supply of money is not, so to get the most enjoyment we need to make the best use of our money. Money is neither derived nor spent in isolation. There are other stakeholders involved, such as life partners, children, parents, employers, business partners, banks and professional advisers. They all have a role to play in helping us get the maximum benefit from the money we have.
Have you thought about Lifetime Retirement Income to look after your money in retirement?
They know that people spending in retirement require significantly different strategies to those who are saving for retirement. They manage retirees money a little differently to people who are saving for retirement. The reason for that is we have to make sure retirees savings last.
Then click on the button below and take a couple of minutes to read all about them.