Talking about money with loved ones can feel uncomfortable. It can be uncomfortable. It can be so difficult that you just avoid bringing the subject up in full.
But you’re doing yourself a disservice by postponing the conversation. You have a hard time saving for a house with your partner if you can’t deal with each other’s bad spending habits. You don’t want weekly trips with friends adding to your credit card debt because you don’t want to mention that your budget is tight.
Erin Lowry, financial expert and founder of Broke Millennialfocused on her latest book “Broke Millennial Talks Money” on the subject of navigating difficult financial discussions. She recently joined The Penny Hoarder for an online discussion sharing tips and advice.
The following is an abridged version of this conversation, edited for length and clarity.
10 questions for Erin Lowry at Broke Millennial
1. Why is it important that people are open to talking about money to people in their life, even if it is uncomfortable?
You can do everything right to build your financial home, but if you can’t communicate effectively, if you can’t set healthy boundaries, and if you don’t know how to get into those tough financial talks, the foundation is slowly going to break down that is your finance house. It is useful that we learn how to deal with awkward money talks because they will happen throughout our lives.
2. Why do you think it is so taboo to talk about money?
Evaluation. I really think this is the word that sums it up. Often times, we feel pretty comfortable talking about money to complete strangers. I had a lot of – before the pandemic – funny conversations on the plane with people about their financial lives, especially when they found out what I was doing. And there is no risk. I will probably never see her again so people get really vulnerable and open. On the other hand, I’ve had friends and family members who weren’t that open because it made me feel, “Oh, am I being judged?”
3. What should you do if you want to talk to someone about money but they are very hesitant?
It depends on who the person is and why you are trying to initiate the conversation. There is a huge difference when you and your partner are really serious about business and are about to move in together. This is then a necessity in order to have the financial conversation.
But every now and then I get messages like, “My best friend sucks with money and I want to talk to her about how to get better.” Listen, if she doesn’t come to you, if she doesn’t ask, it is ultimately not your job to offer guidance and advice.
You really need to allow this to be a very collaborative conversation. Maybe you share something about your own success and that can open the door to questions to initiate more conversations. But sometimes it’s a situation that isn’t your business and when you push boundaries people will feel uncomfortable too.
4. How do you know when you are in the right place in your relationship to talk about finances?
I would love if everyone was super comfortable on the first date, but that’s just not realistic. What you can do is follow the contextual warnings that are given to you along the way. This includes comments, ideas about how much to spend on appointments or travel or gifts, where that person lives, and what type of car they drive. All of these give you signals about how they value things, how they spend their money, and either how much they make or how much debt they may have.
Beyond this basic level you should start getting completely transparent to each other about money at the point where you look at that person and think, “I could spend the rest of my life with you.” If you find it this serious then you need to have the full conversation. That means sharing all of the information: salaries, credit scores, history of relationships with money, debt burden, investments, absolutely everything. It doesn’t all have to be done in one conversation. It can be an evolving conversation over time.
The other thing I really want you to know about your partner is their triggers when it comes to spending money – what makes them uncomfortable, what makes them want to spend, what is their emotional relationship with money, and what have they grown up doing . Not just what your socioeconomic background was, but how money was talked about and treated in your family, as that will ultimately show in your relationship dynamics.
5. Should you wait to get married when you both owe?
No, not necessarily. My husband had over $ 50,000 in student loans when we got married. You need to understand the nature of the debt and the laws in the state where you are getting married.
I’m a big believer in prenup myself, so I think going through the marriage agreement process is really important. We really need to redefine how we think about prenups and make it more like marriage insurance.
Often times when I say the word it triggers people like, “Oh, you don’t love or you don’t trust your spouse.” No, that is not true. Everyone who gets married has a prenup. These are the standard laws of your state. Basically, when you make your own marriage agreement, you are creating a slightly different system that you think is a fair and equitable division of assets or debts.
However, if you are in debt, depending on state laws and when the debt arose, you may not necessarily be liable for your spouse’s debts. I think if you wait it could be a decade or more before you can get married waiting for someone to be debt free.
And the other thing is, I don’t see debt as a red flag for a relationship. What is a red flag is how debt is being handled today. If there was credit card debt from five years ago, maybe there was a medical emergency, maybe something happened, or maybe at this stage in your life you just weren’t good with money. But now they have a plan and You pay it off. If instead there is a continuous cycle of debt accumulation, that is a red flag.
6. What advice would you give on how to compromise a romantic relationship before things turn into a major money war?
One of my favorite pieces of advice that an expert gave me while writing Broke Millennial Talks Money was that it’s okay to let just one person win sometimes. Suppose you and your husband want to buy a couch. You want to spend $ 3,000 and he wants to spend $ 1,000. Well, $ 2,000 would be the tradeoff if you meet in the middle. Instead, you might find yourself spending the $ 3,000 on the couch and then at another point cashing in on a money talk.
The other thing when you get into a battle for money – especially with purchases you want to make – is to go back to the original goals you set for yourself. And if you as a couple haven’t decided on one yet, take a minute to do so.
Develop strong money goals as you achieve them SMART goals.
Your goals are the north star of your overall financial plan. Whenever there is a huge debate about how you are going to spend money, it is important to consider how it will affect everything you want to achieve and this can help solve the problem.
7. Do you have any advice for people on how to navigate cultural norms when discussing money with family?
I think it’s really important that we have early conversations about what the expectations are – especially if you live in America and are married to someone who has a different cultural expectation about how to deal with aging parents or dependent siblings or a sick relative.
You also need to talk to your parents. You need to ask them what they want early on. It will be obvious to some parents that they expect to live with you in later years, when that is your cultural norm. You probably have an idea that is anticipation, but it’s still good to chat about.
For others, your parents may say that you are not worried about this. Just because they tell you this doesn’t mean you won’t worry about it. I think a really easy way to turn the conversation around is to ask what their retirement looks like. Over time, however, it needs to become a real conversation about finances.
8. How do you recover from an argument with someone about money?
I think that depends on how necessary – and this is going to sound a little harsh – it is to recover from it. What one of the financial therapists in the book said about the dynamics of friendship is that not everyone is a lifelong friend. I think it is important to take into account that there are friends who will only be close friends with you during the seasons of your life. That doesn’t mean that whenever there’s trouble or an argument, you always say, “I’m out!” But it’s important to remember.
9. How do you stand up when you and a friend have different values about spending but want to do things together?
Give an explanation. It really helps in providing context for why you keep saying no or pushing back again and again. Just because you have different values does not give you the right to belittle their values.
Let’s take an example of a brunch. A bottomless brunch is around $ 50 and you don’t want to spend that much. You can say, “I really want to hang out with you, but I’ll be honest, I don’t want to pay bottomless brunch money right now because I’m trying.” [insert thing here]. How about we grab a bagel and go for a walk in the park? Or how about you come over and cook me a brunch? “Provide an alternate solution to the fact that you say no.
This list of 100 free things to do can help you find a common activity that doesn’t cost any money.
Now, remember that you can do whatever you originally planned to do. Just because you get yourself out of the equation doesn’t mean they have to adjust plans. By providing this alternative, you may be able to just make plans for another time.
You can also join later. I really love this for birthday dinner and splitting the check. You can join in after dessert or after a drink. You will miss the whole part that is going to cost the greatest amount of money. Just tell your friend that you will do this in advance.
10. Do you think this experience of getting through the pandemic will help people feel more comfortable talking about money?
I really hope so. I feel we have had an unprecedented experience for sure, and unlike other previous recessions, most people have not been personally at fault for what happened to them.
You could have had your finance house in great shape. They could have been six to nine months – even a year Emergency savings – But if you’ve worked in an industry that was completely shut down during the pandemic, it’s not up to you.
I think hopefully people will feel a little more comfortable having conversations about how they get into credit card debt or lag behind on bills, or whether their credit score gets a hit because in many ways it wasn’t their fault. This could give us the flexibility to use less judgment on some of these financial talks.
Nicole Dow is a senior writer at The Penny Hoarder.
This article originally appeared on www.thepennyhoarder.com