Talk Money with Your Family

Having meaningful discussions about money can be difficult. Depending on the audience, it can be downright awkward.

As financial planners and stewards of our clients’ wealth, we at Corient Wealth are often involved in client conversations about wealth transfers, estate planning concerns and all the emotions and complexities that usually surface when addressing such weighty topics. And one item that always seems to bubble to the top is the topic of family money matters.

For each of us, family money matters can mean different things. For the purposes of our comments, we want to share our insights on how those financial conversations might unfold with a young adult who is important to you. Whether that’s an adult child, niece or nephew, bridging the communication gap regarding money can be challenging.

The following three topics are those we have seen raised most frequently, and we also share some of our key learnings about them.

Prenup | Postnup

The conversation around a prenuptial or postnuptial agreement can be shrouded in negativity or hard feelings. We feel this type of chat should be just the opposite.

In fact, a well-constructed conversation about the importance of transparency and communication for a young couple can be an eye-opening experience. Understanding what your future spouse might own or owe could shed light on topics only assumed up to that point.

It may also open the door to how the new couple might manage their finances in the future, allowing both partners to identify their roles and share their learned experiences about money.

Where are you at?

This isn’t meant to be a play on bad grammar; rather, understanding where your young adult might be with their understanding of finances is a great place to start your conversation.

Consider discovery questions meant to inform you about how they view finances today and what questions they may have. Examples of questions or conversation starters might be:

• How often do you think about your personal finances, and what’s your top priority with money? What challenges do you face?
• What are some of the lessons about finances that you learned from me/us growing up?
• If $3,000 fell in your lap today, what would you do with that money, and why?

You could also share a financial mistake you made – or a misunderstanding you had about money – when you were their age. We suggest that you avoid making assumptions about how much (or how little) your young adult knows or thinks about finances. Approach your conversations with an open mind and try to suspend your judgment or biases.

Repetition matters

Most people have an all-time favorite movie that, every time it pops up on TV or a streaming platform, they’ll try to catch it. Even though they’ve seen this flick countless times, when watching it again they may discover lines or interactions between characters that they had never noticed before, or rediscover interesting parts of the movie they had forgotten about. So, compare that to personal finances and consider how much your young adult might have missed in your conversations over the years, despite your best intentions. Just because you talked about it once doesn’t mean they’ve retained the information or truly understood what it meant.

Although we’re not sharing anything groundbreaking here, it’s important to remember that talking about the same topic more than once will only help reinforce the messages and lessons you’re trying to communicate.

Of course, every family is different and will approach financial conversations in their own way. Maybe the money talks you have with your young adults aren’t awkward at all. Whatever the case, we know that good communication, in the right dose and with the right spirit, will pay dividends over time.

ABOUT THE AUTHOR