How to Talk About Money With Your Family

Many of us have experienced stress this year, and the economic fallout from the pandemic is at least partly to blame. If money matters are triggering disagreement and disruption with your spouse or other family members, remember that respectful conversation is the key to solving spats. Use these strategies to open up the lines of communication.

Gather the facts. To be sure you aren’t operating from an emotional perspective, gather pertinent data such as credit card statements. Total up discretionary spending (non-essential items) to gain a better understanding of the household’s spending habits.

Value each family member’s needs. Some discretionary spending is important to everyone, but we all enjoy different things. Avoid emphasizing the perceived frivolity of certain items, such as video games or new shoes, and focus on the impact on your household budget instead. Everyone will spend some money on things they enjoy; the important thing is establishing a reliable budget for those items.

Create a budget. Work together to draft a realistic budget, prioritizing necessary expenses like your mortgage, electric bill, car payments, and so on. Retirement savings must fall very high on your priority list. Make sure retirement comes before optional expenses.

Make a plan for debt reduction. If credit card balances are stressing you out, make a plan to reduce discretionary spending to agreed-upon limits until those cards are paid off. Remind your loved ones that once debt is under control, the budget will gain some breathing room once more.

Budget your “fun money”. Each of you should receive a spending allowance for fun purchases or gifts, to be spent however you wish. This way no one feels monitored or controlled.

Establish regular “financial check-ups”. Remember that the financial conversation isn’t something you do only once. Establish weekly check-ups to ensure that your budget is on track.

Use an app to track spending. If technology appeals to you, install an app to help track the budget. You and your spouse can both log in for a quick check-up and reassurance when you need it.

Consult with an expert. If you find communication difficult, or if conversations continually devolve into fights, enlist the help of a family counselor who can act as a moderator for your discussions.

On the financial end of things, remember that we’re here to discuss any of your concerns. If you need help making both short- and long-term plans, call us to schedule an appointment.