Talking about money can be intimidating. That’s why author Erin Lowry wrote “Broke Millennial Talks Money: Scripts, Stories and Advice to Activate Awkward Financial Conversations” to help you approach the subject confidently. Her latest book is part of her Broke Millennial book series, including a step-by-step guide to getting your financial life together and how to take on investing. She understands crafting the conversation can be just as important as the details. This week we asked Erin for her tips on talking money with your partner, family and friends.
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This interview has been lightly edited for style and clarity.
You’re extremely candid about your financial journey. Why is it important for other people to get comfortable talking about money?
There is no single answer as to why it’s important to talk about money, because there are a myriad of reasons. It’s critical. On one hand, talking money helps us to unearth wage gaps and pay discrepancies. Like the story I share in the book about finding out I was paid $7,000 less than someone with the same credentials for the same work.
On the other, it’s critical to talk about money because we must learn how to communicate and set healthy boundaries with loved ones. You may have gotten your financial life together and started building wealth, but it can come crumbling down if you’re not able to navigate awkward financial conversations, set healthy boundaries and compromise with people in your life.
How should people prepare to talk about money with their partner?
Start by telling your partner it’s coming. This shouldn’t be a conversation that blindsides the other person. Instead, set a date and time. It’s ideal to have this conversation at home with no roommates or parents around.
If it’s your first time getting financially naked with each other, then you should have a conversation about what each of you wants to know about the other. You should also set boundaries about what you’re comfortable sharing in this first conversation. It’s okay if your partner is only comfortable sharing the existence of debt, but not yet ready to share the amount. Eventually, yes, that all needs to come out, but this can be a slow, evolving conversation.
How is that different from talking about money with family?
It’s a different relationship. Talking money with your parents can upend the traditional family paradigm because it might feel like you’re trying to parent them instead of being the kid. You also aren’t necessarily trying to build a financial life with your family members, but instead aiming to learn if you need to account for them in your financial plan. Being your parents’ retirement plan is a reality for many Gen Xers and millennials right now.
Your ability to talk about money with family can also directly impact your relationship with a partner or spouse.
What should someone do if a money talk with their partner or family goes bad?
It depends on what type of “bad” happened. It’s possible the conversation was not initiated or handled in a tactful way the first time it was approached, which caused the partner or family member to become defensive.
However, if it keeps going poorly because the two of you just can’t communicate effectively about such an emotional topic — and yes, money is very emotional — then it’s prudent to bring in a neutral third party. For example, a certified financial planner or a financial therapist or a couples counselor.
What’s your biggest financial regret?
I know people would typically answer with an expensive purchase they never used or about accumulating a certain amount of debt. Mine is actually about money I didn’t spend.
My biggest financial regret is my failure to invest into friendships in my early twenties. Too often, we glorify frugality in personal finance. Of course there are advantages to being frugal and spending in alignment with your values. However, you also need to assess the real costs of ruthlessly prioritizing your finances over everything else.
In my early twenties, I wasn’t earning much and became fixated on staying out of consumer debt and still saving on a meager income. I certainly don’t regret those two goals, but I do regret that I always prioritized picking up an extra shift at the coffee house or babysitting over spending time with friends. There are times I could’ve said no to work, yes to friends and maintained the same level of financial stability.
People don’t like being rejected and if you keep saying no, then people eventually stop asking. In retrospect, I would have invested more time and spent even a little money into fostering those budding friendships.
What’s your advice for someone who’s experiencing the same thing?
Say yes sometimes. Set yourself up to do so by creating a “Fun Fund” or “Friend Fund” into which you put a little bit of each paycheck and have some money to go to the dinner, happy hour drinks, movie, concert or what have you.
In the moments that you don’t want to spend the money, but still want to invest in the relationship, you need to be better in your rejection. Don’t just say no without context. Instead, give your friend the compliment sandwich with a counter offer.
Try: “Thanks for inviting me to brunch. I want to catch up, but it’s not in my budget this week to spend brunch-level money. Instead, could we grab a bagel and go for a walk in the park?”
It’s also helpful if you can share some of your financial stress or a goal toward which you are working. “I want to catch up, but I’m working to pay off one of my student loans in the next three months, so could we do something a little cheaper?” Sharing your financial anxieties and goals with friends helps provide them with context and even can be built in accountability for you in trying to achieve your goal.
Best money you’ve ever spent?
Oh, that’s easy. The adoption fee for my first dog, Mosby. It was one of the only impulse decisions (not even purchases, decisions) I’ve ever made and truly one of the best. I happened to walk by him at a street fair in my neighborhood. Just one look at his face and I knew he was the dog for me. Mosby taught me all the cliched things about caring for another being like sacrifice, unconditional love and responsibility. He was a senior rescue dog with a heart condition, so it wasn’t the most economical decision, but it also taught me how money is just a tool and to be spent in alignment with what you value.
We only had three years together before he passed, but it was worth every penny.
Image: Nastia Kobzarenko