It can be quite a complex situation that you face when your relatives ask you about your financial situation. If your finances aren?t in the best of shape, you may be embarrassed to answer their questions. Financial discussions of any type can put us?or even the people we?re talking too?in an embarrassing situation. You can find ways to channel the discussion into something that can save some embarrassment to all parties involved. It’s an open question: should you tell your friends and family about your finances?
Much of our willingness to discuss finances with the people who are closest to us may depend on the state of our financial affairs?whether we?re struggling with money, or if we?re doing well.
Should you tell your friends and family about your finances if you?re doing poorly
Sharing financial problems with your friends and relatives can depend on the type of people they are. If your family and friends are the caring type who can give you advice on your problems without judging you, then sharing your financial problems with them can be a real blessing.
However if your family and friends are the other type?the kind who might even pour salt onto already open wounds?the discussion can be worse than just embarrassing. In a different direction, if your friends are more prosperous than you, you might want to avoid the topic at all?especially if they?re the kind of people who tend to flaunt their wealth. In such cases, it might help to keep all discussions in an entirely different direction and away from money matters all together.
Debt can also be an embarrassing topic, as people often become judgmental and blame you for your troubles. (Sometimes that?s true, but sometimes debt stems from circumstances beyond our control.)
But what do you do if others initiate discussions of your finances, discussions you?re not comfortable entering into?
Friends and relatives may be well-intentioned by offering you advice, but if that advice comes with a sharp edge on it, it may not be the type that will be of any benefit to you. It can even make you feel worse than you already do and weaken any ambition you have for dealing with your circumstances.
If money discussions are embarrassing, it can help to control the flow of the conversation. You can initiate a discussion on the latest happenings in the world or in the media, for instance. That can keep your relatives and friends glued to other topics and away from your financial problems.
It can also help to emphasize those areas of your life that are going well, or on those things that you?re good at. For example, if you?re a good cook, preparing a delicious meal can make them completely forget about your financial problems. Being good at something can make others see the good in us.
But you can even feel reluctant if you are rich!
This is another kind of reluctance but in an entirely different direction. If you?re financially better off than your friends and relatives, discussing money can also be embarrassing. Many prosperous people don?t like to talk about money around their friends and relatives out of fear that they may be asked for money. Still others feel that money matters need to be completely private for one reason or another.
But money conversations may also be embarrassing for the people we?re talking to. If you aren?t careful how you handle it, you can make them very uncomfortable. Often people feel that those with money might be lording it over them, or even bragging. If you have a tendency to do that?and you really need to evaluate your conversations and use of words?you could scare them away.
If you?re better off than the people closest to you, make a special effort to make them comfortable in your presence. Try to be very modest in front of your friends especially those who you know are struggling. If they have any financial problems, try to sort that out instead of telling about your finances. Never judge them?there might be root problems they can?t or won?t admit to?try to offer constructive advice, and for goodness sake, don?t try to show off!
Be humble as everyone loves a modest person rather than a proud one. You can even try to reach your relatives and friends to help them in some way; advice and companionship can be every bit as important as money! If you?re blessed to be well off, do your best to be a help to others, not to be another one of their problems.
It doesn?t matter whether you?re doing well, or doing poorly, talking about finances can be uncomfortable or downright embarrassing.
How do you handle discussing your finances with family and friends?yours or theirs? Are you completely open about your finances with people close to you? Or do you prefer to keep things quiet where money is concerned?
This is a guest post by RP who is a regular writer for various finance related communities. She holds a degree in Marketing and Finance and is currently working in a reputed bank as a relationship manager. She writes articles on debt consolidation, debt settlement, frugality, savings, economies of states etc.
Our family and friends know SOME of our situation, but they don’t know 100%. It’s more about the fear of judgment though. I don’t want people judging our poor decisions; it’s enough knowing we made the wrong decision.
20 and Engaged – I completely agree! It’s probably never a good idea to reveal EVERYTHING about your finances (or anything else!) to others.
Hopefully you do have at least one or two people you can open up with who will give reliable advice in a non-judgmental way. An outside perspective can be a big help.
I’ll freely tell any that ask, but I don’t offer the info up volluntarily. In the past when I have, people take it the wrong way and I’ve seen them make bad decisions and not take my advice just to spite me. It’s a bad situation, and with this family member in particular, we no longer ever talk money or advice because I know it falls on deaf ears.
Jesse – Yeah, how much we can even talk about money to any family member largely depends on their attitude about it, either toward their own finances or ours.
Interesting topic, Kevin.
Conversations about money are taboo and have been for decades (if not centuries). Today people would rather discuss sex with relative strangers than talk about money. 20 and Engaged explains it well – “fear of judgement.”
While I’m all for keeping YOUR financial information private from friends and maybe even family, the major problem I see is that (a) this translates into a general phobia of ANY conversations about money and (b) the general tendency for people to treat their finances on an uninformed “Do-it-yourself” only basis.
While I understand there are perfectly valid reasons WHY we find ourselves in this position, the fact is people make many dumb choices with their money that they could have avoided if they (a) understood how it works better and (b) had the outside perspective from a truly fiduciary professional.
John – I think what’s important is that we find a trusted someone to discuss our finances with, especially our problems. Family and close friends aren’t always the best choice, so that’s when bringing in a professional is critical.
We definitely keep our finances to ourselves. Our friends and family assume we’re doing well (they are correct if they think as much) but we never delve into the nitty gritty about our income or investments … net worth or debt. We don’t fear judgment. We both come from families who sometimes found it hard to make ends meet when we were children. We don’t have such hardships and in some cases we out earn our parents and we’re still quite young (avg age 30 between Mrs. SPF and I). We don’t want people to feel resentment ….
SPF – A barber told me many years ago that there were three things he never spoke to his customers about–sex, politics and money. He felt that all three had the potential to lose customers. That’s probably true with family and friends as well. Sometimes too much familiarity can breed resentment or worse.
Since my mom worked in banking and investments for 20+ years I was taught early on about money and have always been able to ask for advice if I needed help. I consider myself more money savvy than my friends, but don’t readily offer up financial advice or talk about investments with them. It’s really personal and not everyone is comfortable talking about money in person. Maybe that has something to do with the explosion of personal finance blogs lately…it’s an outlet to share your experiences without having awkward conversations.
I think everyone has a friend or relative who will just come out and ask you how much money you make or what kind of investments you have. I don’t mind answering when I’m asked, but I don’t volunteer the info.
Echo – You may have hit on one of the primary reasons talking about money is such a problem for so many, the fact that finances are unbalanced between us. Either others are better off–in which case we might resent their advice–or we’re better off–in which case they might resent our advice.
It’s a balancing act no matter what, but I’m of the opinion that we all need confidant’s in the major areas of our lives.
I usually have open discussion with mu closest friends when it comes to finances.It really helps that some of them are accountant and lawyers, so they can actually provide good feedback on some maters.
I rarely talk finances with my family because my sister is not doing that well and I’m afraid she will consider I’m just bragging.
My family knows what I own but not every detail of my financial life. Not seeing me in an office every day makes them ask me if I need money once in a while… I wouldn’t go to family for financial advice though because you need to remove emotion to make smart money decisions.
Hi Pauline–Family are not always the best people to go to with financial issues because they can be too close to give objective advice. And then emotions can get in the way too. Friends might be better, but you have to worry about scaring them off. It’s a tough call.
I divulged my finances to my family and very close friends when I was going through my debt reduction phase. I needed to in order to make sure they understand why I was making the decisions that I was. It was eye opening for them and a relief for me. I think it really all depends on the relationship you have with your friends and family.
Yes, but in your case you really needed to tell them so you could “clear the decks” to get ready for what you needed to do. That was an excellent idea because family and friends can be the biggest obstacles to making major financial shifts. By cluing them in, you got them on board with your plans. Excellent idea Grayson.