How to Talk About Money—Even When You’d Really Rather Not
Opening up about what’s in your wallet can save you from heartache, awkwardness and estate problems. Here's expert advice on how to broach the dreaded subject.
Fact: Canadians don't like talking about money
A few years ago, Hannah Meyer (name has been changed) was working at a packaging company in accounts payable when she received an email in error—one that disclosed the salary of a co-worker who had just joined the team. Despite having far more experience than him when she was first hired three years earlier, the then 42-year-old had been offered much less, and was only recently earning around the same amount.
“I felt slighted, embarrassed and hurt,” says Meyer. “But because it was sent to me in error, I didn’t talk about it.” In the weeks that followed, her resentment towards the new hire grew, but she had difficulty imagining how she could raise the issue with their boss. Meyer’s reluctance to speak up about this dilemma is a common reaction to discussing financial matters: just don’t do it. Ever. In fact, according to a 2015 Ipsos Reid poll, 51 per cent of Canadians said they actually lie to their family, friends and co-workers about their financial situation. That’s unfortunate, because in many cases, opening up about what’s in your wallet can save you from heartache, awkwardness and estate problems. Here are some tips on how to talk about money.
Be up front
For most people, that number in their bank balance doesn’t just describe their finances, but also their self-worth. This can make talking about money difficult, even with lifelong friends.
According to Shannon Lee Simmons, author of Worry-Free Money, awkwardness can often arise when a pal plans an expensive group activity, such as a vacation or milestone birthday party. “You don’t want to be the one person who’s saying, ‘I’m not making enough money to do this,’” says Simmons. “But you also don’t want to hurt that person’s feelings by not going.”
Rather than saying nothing and racking up a credit card bill or, even worse, brushing off the event completely without any explanation, Simmons advises having an honest conversation with your friend. After all, they may not realize the financial pressure they’re putting on you.
She suggests you don’t need to say a blunt “No” to a gathering that isn’t in your budget.
Instead, let your friend know that you have to be careful about money and what’s at stake for you if you don’t stick to your monthly spending allotment. If you feel that they’d be open to hearing alternatives, you can come to the conversation with more affordable options. If the plan can’t be changed, let them know you’ll attend part of the event, if possible.
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How to talk about money with family
While talking about money with friends can help avoid occasional misunderstandings, doing so with family may be even more important.
“There are families that don’t talk about money, and children who don’t know the financial position of their parents,” says Rona Birenbaum, a Toronto certified financial planner. The results of this secrecy, she says, could be devastating conflict in the wake of a death, including siblings and family members spending a lifetime fighting over an inheritance.
It’s best to broach a family wealth conversation casually at first, says Birenbaum. She suggests mentioning a friend’s situation to get the discussion going, and then shift to yours. Or, even better, reading a book about estate planning will not only give you a conversational icebreaker, but also help you feel more confident. (Birenbaum recommends Willing Wisdom by Thomas William Deans.) Then, as soon as everyone is ready to have a more thorough rundown of numbers, it might help to seek professional help from a certified financial planner, who can mediate and help prepare for the future.
When it comes to asking family for financial assistance, Birenbaum suggests a less casual approach. “Be direct and honest, and don’t pretend the conversation is going to be about anything other than what it is,” she says. In this case, be prepared with an explanation as to how you got into the situation and, most importantly, some potential solutions. If you’re looking for a loan, for example, come to the meeting with a realistic schedule for paying your family member back.
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How to talk about money at work
Talking about money can be especially challenging at work, where salaries shrouded in mystery discourage a culture of openness. In Meyer’s case, she never did talk about the salary disparity with her boss. She felt the possible repercussions of rocking the boat weren’t worth it, even though it wasn’t her fault she received the email. The incident was a contributing factor to her leaving the company a few years later. “I do wish that discussing money wasn’t so taboo,” she says.
If you ever find yourself in similar circumstances, Birenbaum says raising the issue with your boss should be considered. She suggests waiting until the initial emotional reaction has passed, and then setting up a meeting to inquire why your co-worker received higher compensation when hired, and what you can do to advance yourself to where you think you should be in comparison to them.
While Meyer’s discovery was involuntary, some people may want to know what their co-workers earn in order to assess their value in their field. However, Dr. Moira Somers, a clinical psychologist in Winnipeg, says that it’s important to give your colleagues the option not to share their salary, since doing so goes against social norms. “Giving them a way out helps preserve positive relationships in the workplace, and honours the other person’s boundaries and their right to say ‘No.’”
After that, she recommends explaining exactly why you’re asking—whether it’s because you are preparing for a salary negotiation or just asked for a raise and were turned down. Another way to put the other person at ease, adds Simmons, is to ask for a salary range rather than the number outright.
Conversations about money, no matter whom they are with, are never going to be easy in the beginning, warns Simmons. But the benefits of speaking up when it matters almost always outweigh the consequences of staying silent. “I’d rather be uncomfortable for an hour than unhappy for a year,” she says.
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