10 positive ways to discuss finances with your family
According to the Office for National Statistics (ONS) inflation reached 7% in March 2022, the highest level since 1992. It’s likely you have already seen the financial effects of the rising cost of living, which has resulted in food, clothing and even medicines rising in price.
In addition, the war in Ukraine has helped push up energy prices that were already rising thanks to high demand and the Covid pandemic. As a result of the energy price cap being increased in April 2022, Money Saving Expert estimates that 22 million households could see their energy bills rise by £700 a year.
Because of this, you may be keeping a much closer eye on your household outgoings, which given the current economic climate, makes sense. That said, if you’re being diligent when others around you are not, this could cause arguments.
When you consider research by Royal London reveals that money is the number one issue that British couples argue about, you may feel it’s only to be expected. That said, it doesn’t need to be that way.
Whether you’re talking to your partner or spouse, your children or family, there are steps you can take to ensure conversations about finances are constructive and harmonious. Read on to discover 10 you may want to consider.
1. Think about timing
When it comes to discussing money, it’s likely your spouse, partner or family will not appreciate feeling ambushed. That’s why it’s important to agree a time to talk, which could help ensure everyone’s in the right frame of mind for the conversation and it’s not rushed.
This means you’ll be able to have a proper discussion and nothing important is left unsaid.
2. Be prepared
Understand what you want to discuss and have all the relevant information to hand, such as details on savings accounts, income and outgoings, and investments.
This will help you make your case more effectively and answer any questions raised. As a result, family members might have a clearer understanding of the points you’re making, and be more likely to agree.
3. Discuss financial expectations
During the conversation take the time to understand the other’s financial expectations, and what they need from you. This will provide clarity and increase the chances of an agreement, instead of a heated argument.
4. Talk during the good and the bad times
Only talking about money when there’s an issue is likely to cause friction. This is because whenever you bring money into a conversation it means there is a problem, which could make others feel defensive when the subject of finance is raised.
Instead, talk regularly about money during the good times and the not so good times. This means everyone will become used to talking about finances and not automatically assume there’s an issue, resulting in a more relaxed and constructive conversation.
5. Consider how you’ll start the conversation
How you open the conversation is key, as getting it wrong could set a negative tone and result in confrontation. A good way to start might be to refer to a topic that’s been in the news, such as the rising energy prices.
Because this is very generic, others are more likely to engage in the conversation, helping increase the chances of an outcome everyone’s happy with.
6. Stop if necessary
Money often sparks an emotional response. If this means conversations become angry or confrontational, consider taking a time-out. Continuing when emotions are running high could result in misunderstandings and key pieces of information being forgotten or withheld.
Hitting the pause button and giving others time to calm down may help them come to terms with what was said. Finishing the conversation at a later date could provide a better outcome.
7. Ask “what if…?”
Framing questions as a “what if…?” means that you can ask probing questions without looking as if you are. For example, you could ask: “what if you won the lotto, what would you do with the money?”
These types of questions could provide an insight into the other’s view on money, financial security and lifestyle aspirations.
8. Take turns to speak
Remember that it’s as important to listen as it is to speak. Make sure you give those involved in the conversation the chance to fully explain their thoughts, concerns and aspirations.
This helps avoid misunderstandings and resentment, and promotes a more positive conversation.
9. Think about the questions you’ll need to ask
Before the conversation, consider what you want the outcome to be and the questions you should ask. Being able to justify a question if it’s challenged could help family members understand why the conversation’s taking place and may even get them on side.
10. Share a money goal
A subtle way to bring finances into your conversation is to discuss a money goal you’re working towards. This could be a family holiday, a deposit for a better house or a new car that you and your partner, spouse or civil partner have promised each other.
Using money goals to start a conversation about finances increases the chances of an agreement being reached, as everyone will be pulling together towards a common goal.
Get in touch
Another way you could ensure a more constructive conversation on certain financial issues could be to include us. When it comes to investments, intergenerational planning and Inheritance Tax for example, we can explain the risks and opportunities available to you and your family.
If you would like to talk to us about whether this might help, email us at email@example.com or call 01277 350560. We’d be very happy to help.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.