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Let’s Talk About Money!
Growing up money was rarely talked about in my household. In fact other than balancing a check book and saving money I wasn’t taught any financial principles at home. Over the years I have traveled many places and interacted with various individuals and believe I can safely say the majority of households in America are like this. I mean think about it, I was always taught
- Asking how much someone paid for something was rude.
- Never ask or tell someone your salary.
- Money isn’t to be discussed at the dinner table.
The list could go on for days!
The Problem
Talking about money is like talking about sex. It’s taboo and impolite yet every single family is actively engaged in both and I don’t know about you but both are a very important part of my marriage. But if these things are so important to people then why do we shy away from talking about our problems, concerns, goals, and methods? I believe the old adage goes “if you do not learn from history then you are destined to repeat it.”
If a child knew that his parents:
- Accrued significant credit card debt and witnessed the negative effect, maybe they wouldn’t engage in the same activity.
- Saved 10% of their paycheck so they could attend college, perhaps they would do the same for their children.
- Invested in Dividend Kings every single month to build wealth, possibly he or she would start investing as soon as they started working full time.
I’m not saying all children will mimic their parents but at the very least they will be exposed to situations early in life so when they finally do find themselves in that situation they will have some experience.
If a friend knew one of their friends:
- Placed a 50% down payment on their home in order to avoid paying substantial interest, they might be inspired to do the same.
- Obtained a home equity line of credit (HELOC) and saw the negative effects it had, maybe they would politely decline when their banker offered it to them.
- Was in the same industry and similar position yet making $20k more a year, they may decide to renegotiate their salary.
Yet conversations like these rarely take place because we are afraid of being judged and possibly ridiculed. Today I want to leave you with some timeless advice that I learned the hard way as a young soldier.
The Solution
http://nj.gov/military/publications/guardlife/
During my basic training we were given basic combat lifesaver skills. This consisted of CPR, dressing combat wounds, and a couple other life saving measures on the battlefield. Long story short we were on a training exercise and we had a simulated casualty, it was my duty to tend to this casualty but in order to simulate real battlefield stress I had two cadre members screaming at me during the evaluation.
- “What are you doing Cadet!??!”
- “OMG you’re definitely going to let him die!”
- “Are you sure that’s what you’re supposed to be doing?!?!”
My stress level was high, from what I can remember I had very little sleep and for some crazy reason I took it upon myself to yell back “Look I’m not an expert I’m doing the best I can!” Man was that a mistake, the cadre members stopped the evaluation immediately and proceeded to run me through a quick 10 minute session of push ups, flutter kicks, bear crawls, mountain climbers, and a whole other list of calisthenics as punishment for losing my composure. After the lead cadre member informed me that I had failed the evaluation he pulled me aside and told me this…
“Cadet, I know you were stressed out. That is the point of the exercise, but you must understand you are the expert until someone else with more expertise arrives. Until then, this soldier’s life rests solely on your shoulders.”
I will never forget those words. My point with this story is when it comes to financial advice you don’t need to be an expert in order to talk with friends and family. On the flipside someone doesn’t need to be an “expert” in order for you to listen to their advice. All to often I see individuals disregarding advice that would benefit them tremendously just because that person isn’t a licensed financial advisor or planner.
It doesn’t hurt or cost you anything to talk about money on a regular basis.
How often does your family discuss money? Have you ever been disregarded when giving financial advice to friends or family members?
Here’s to our Wealth!
January 21, 2013 at 5:06 pm
Many parents in past generations though t talking about money was inappropriate. I think you can use money as a teaching tool for your children and involve them as you make certain decisions. For example, I helped my son invest some money when he was a teenager. If parents are financially responsible their children will learn from their actions. Children learn much more from how you act versus what you say.
January 23, 2013 at 7:37 am
I agree Krant. It’s great to hear that you assisted your son in purchasing stocks at such a young age. Does he still actively invest today?
January 21, 2013 at 10:30 pm
I had a guest post on Get Rich Slowly a few weeks back and talked about a lot of these points from my experience living through my parents divorce. My parents were terrible with money and it drove a huge wedge between them until they finally separated. It taught me a lot of things about money and I learned early on the importance of being in control of ones finances.
That’s quite a moving quote your lead cadre member told you. Thanks for sharing that Marvin.
January 23, 2013 at 7:40 am
Sorry to hear about your parents divorce. I have read numerous articles on how that is one of the top 3 things that drive couples apart. I will never forget my mentor, he taught me things literally a decade ago that I continue to use this very day.
January 22, 2013 at 7:31 am
You are correct, when it comes to financial matters, we should that not claim ourselves as a financial guru. We should always open our heart and mind from other advice and weigh it. It might be helpful to you, nothing harm to accept and try the advise from our fellows. When it comes to making or growing money, two heads are better than one.
January 23, 2013 at 7:42 am
Absolutely! I am always learning when it comes to my financial education and will listen to a bum on the street if he is talking about money. You absolutely NEVER know when you might learn a new tactic or technique to put in your financial arsenal.
January 22, 2013 at 12:22 pm
Great post Marvin! My parents did not discuss money growing up either and I really wish they would have. I think it’s part of a larger problem that we offer little to no basic financial education today. When I try and talk to family members about money I often get the “I am happy it works for you, but…” response. You can only do/say so much, they have to actually want it themselves.
January 23, 2013 at 7:56 am
I am a little reluctant to “demand” financial education in our schools because whenever you apply a blanket policy on anything it typically fails quite severely. However, I believe some form of financial education should be introduced to students outside of the home. But I do agree the first and most important step is wanting to learn and taking responsibility for your financial future.
January 22, 2013 at 5:04 pm
My parents didn’t hide money issues in our house, but we weren’t privy to the details, either.
They did teach us about being responsible with money, and from a very early age, I was someone who had no problem delaying gratification.
I think it helps to discuss financial issues with friends and family. You don’t have to go into the details, but the more you learn, the better off you’ll do!
January 23, 2013 at 8:02 am
Indeed. In hindsight I wish my parents would have pushed me farther than what they knew about finances. Of course as parents we all want to pass down what we know to our children but one of the things my wife and I plan to challenge ourselves with is pushing our children farther and harder. When we don’t know an answer to our kids questions we aren’t going to make up and excuse or disregard it. We’ll either find the answer (through Google) or find an expert. I believe this is what helps encourage a child’s education and motivation.
January 22, 2013 at 5:37 pm
I definately wish money wasn’t such a taboo topic. Oftentimes I find myself interested in how others are treating thier personal finances such as debt, savings, investings so I can see if I can learn something from them. However, apparently it is rude to bring up finances in conversation. And if I mention that I have a fully funded emergency fund or that I invest in stocks it is seen as boastful and arrogent when others feel they are just getting by.
I think you make a great point that we should look to those who are successful with money and mimic them. Whether that is our parents who are teaching us good habits or our friends and coworkers who are making great decisions.
January 23, 2013 at 8:08 am
Thanks for commenting Dan!
At least once a month without fail I have a family member or friend contact me about finances. They know or assume I have a pretty good handle on it because I talk about it ALL THE TIME =)
The majority of the time the topic is about debt and how to get out of it the fastest way. And 9 times out of 10 without fail my friends or family members feel that telling me what kind of debt and how much debt is too much information. This absolutely blows my mind. How can you go to someone for help but not want to tell them all the information they need to help you. By the end of the conversation they say something to the effect of “I just need to go see a financial advisor.”
Now don’t get me wrong there’s absolutely nothing wrong about a financial advisor but as their friend or family member I can almost guarantee I care about their situation a lot more than a stranger does.
Additionally when I try to still give them advice they say it is impractical because they don’t have the type of money I have. I find this almost insulting, because I worked hard to get where I am and it didn’t come easy. I feel like people always look at the end result but never the process that it took to get there.
Whew! That was definitely a longer response than I had planned. Hope you don’t mind a semi rant
January 22, 2013 at 5:59 pm
I love this quote: “Cadet, I know you were stressed out. That is the point of the exercise, but you must understand you are the expert until someone else with more expertise arrives. Until then, this soldier’s life rests solely on your shoulders.”
January 23, 2013 at 8:11 am
It means so much to me to this day still. It has helped me tremendously through multiple situations in my life. My wife thinks I’m a freak of nature because I always function in stressful situations.
I have my gripes about my time in the Army but I can tell you with absolute certainty that I would not be the man I am today without the training and experiences from my time in the military.
January 22, 2013 at 7:11 pm
I agree that families need to talk more about money. Even if it isn’t talked about children learn from the actions of their parents. If kids see parents paying with plastic they’ll assume they should do the same. However, what if they think plastic is credit and not debit? That could lead down a horrible financial path.
January 23, 2013 at 8:14 am
That could definitely lead down to a horrible financial path.
You make a great point, simple actions can speak louder than words.
One of my teachers told my parents to start giving me an allowance and to never buy me things I wanted that were not necessary. Instead I was to learn to save for the things I truly wanted.
I believe it was a good lesson to learn and I plan to do something similar with our children.
January 23, 2013 at 9:04 am
I truly don’t know why money is such a taboo issue to talk about. Throughout the rest of society an open forum is welcomed on almost any other topic but there’s still such a stigma when is comes to discussing money and personal finances. Luckily we have a nice PF/DGI/FI blog network where we can bounce ideas off each other if something comes up. I’m looking to eventually get some rental properties and it’s nice to see the process play out through some of our fellow bloggers experience to get an idea of what to expect.
When I was growing up, money was never really talked about in my house, but since I’ve become an adult and taken more interest in it my mom and I openly discuss different issues. I finally got her to open an online savings account where she was able to increase her interest rate by about 6.5 times. Once my wife and I have children money/finances will be an open subject. I might not tell them anything down to the dollar, but truthfully that amount of detail isn’t needed. I’m hoping I can lead by example by reaching early FI and when they wonder why Daddy doesn’t have to work that’s a natural opening to teaching about investing.
January 25, 2013 at 2:37 pm
Completely agree and am glad to hear you plan to teach your children about finances. I’m sure you already know this will put them light years ahead of their peers.
January 25, 2013 at 8:14 pm
I think it needs to go beyond talking about money. Money needs to be ”taught”. While I grew up in a very frugal house my mother never discussed money topics beyond ”always pay your cc off in full” I had no idea how to budget/save/anything. Lead by example. Start allowance at an early age and what a budget is!
January 25, 2013 at 8:24 pm
I agree, starting an allowance early teaches a child fiscal responsibility.
January 26, 2013 at 8:33 pm
AWESOME!!! I talk to my parents about money all the time, including specifics of my situation and their situation when they were my age. My husband, by contrast, knows NOTHING of his parents’ finances or philosophy on money, at any point in their lives. I’ve learned from my parents what to do; my husband, on the other hand, came into our marriage a money novice. I think I got the better end of the deal.
January 27, 2013 at 9:08 am
I’m glad to hear you and your parents have had such an open line of communication when it comes to money. How does your husband deal with you being so open about money?
January 27, 2013 at 4:21 pm
I was taught not to discuss money matters too much, but am fortunate my parents were always very open about their finances, how much dad earned, exactly where all the money went, our family budget etc. He wanted us to be financially responsible adults and thankfully all our extended family felt the same and everyone has always been very open about finances and encouraged us to talk about it, ask questions etc BUT it was to stay within the family.
I agree with you that if more people knew more about each others financial decisions and situations, we’d probably learn from them or be inspired by them and be better off financially as a whole community.
January 28, 2013 at 8:04 am
Very fortunate indeed Kylie. I’m glad to hear your parents included you in their finances at such an early age. Now that you are older do you discuss finances with people outside of your family?
February 1, 2013 at 10:47 am
Not family-based, but nyc culture is pretty open to talking about money. It is not rude to ask someone what their rent is. Prices of entertainment and food come up in conversation often. People regularly talk about “saving money” because everything is expensive for everyone.
February 1, 2013 at 3:33 pm
I would love to live in an environment like that. I have heard that New Yorkers are widely known for telling people what is on their minds.