Is it time to start talking about money?

Is money the last great taboo?

We seem to be able to talk about anything, both face to face and online. All aspects of life, health, families, relationships and beliefs are up for discussion.

Despite this, money is one thing that many of us are still not comfortable talking about. But why?

In this article we look at reasons why it can be difficult to talk about money, and how to tackle the subject if you need to discuss it with family, friends or professionals.

 

Why is it difficult to talk about money?

Talking about money can feel awkward simply because people don’t often talk about it. Money can be a sensitive topic because it is so closely aligned with your core values, and you can feel very exposed being open about it to another person.

But this means that you have no way of knowing whether the money habits you have developed are the same as other people.

For example:

  • Do you live within your means each month or regularly overdraw?
  • Do you budget your money and plan your spending or just go with the flow?
  • Do you end up using credit cards more than you would like to? And is this leading to credit card debt that is becoming more difficult to pay off?
  • Do you have any savings?
  • If you own your home, how big is your mortgage? If you don’t own a home and would like to, are you in the process of saving for a deposit or is it completely out of reach?

We all have very different approaches to money and there are no absolute rights and wrongs. But unless you understand how others are managing their money, you could be missing out on some good advice.

It is particularly important to be able to discuss money with your partner and/or other people that you are close to, especially those that you live with.

 

My partner and I never discuss money. How can we start doing this?

If you are in a long-term relationship with someone, whether you are married or cohabiting, you need to know how they stand financially. This is because you will most probably be taking on some financial commitments together – for example mortgage, rent, personal loans or car purchases. You need to know what each other can and can’t afford, and how good their credit rating is.

You also need to know their longer term goals and ambitions, and what role money is going to play in these. For example, if they have always dreamed of retiring at 60 and moving to a completely new area, they may want to save money towards this. But if your life plan is different, you may not be in agreement with this use of money.

So you need to agree to have a money talk. You need to find out the following kinds of things about their finances, and share the same kind of information about yours:

  • How much do they earn? Are they happy with this or are they hoping for something better?
  • Do they have any savings? What is their plan to start/increase their savings?
  • Do they have any debts? If so, are they on top of the repayments or is there a problem?
  • Are they considering making any major purchases in the near future, such as a new car?
  • Are they happy living where you are now or would they like to move? Rent or buy?
  • Do they have any financial commitments to family or ex-partners, for example maintenance, child support, or carers/care home fees.

You also need to agree whether you are going to keep your finances separate, combine everything together or a bit of both. There is no single right answer, but you both need to be in agreement about what is going to work best for you.

 

I have got into a financial mess. How can I ask for help?

One of the times we are most reluctant to talk about money is if we are in a financial mess. This usually means that our debts have spiralled out of control to the point where we are unable to pay them all back.

This is a horrible situation to be in, but a situation where you really do need to talk. There is help out there if you need it.

If you are in debt, as well as doing all you can yourself to get out of it, there are three groups of people you should consider talking to:

  • Family and friends

This can be hard, but your family and friends may be the best people to help you. They are the people who love and support you, and who would want to help you if they can. Just think of the situation being the other way round: you would not want them to hesitate to ask  you for help rather than trying to struggle on.

So have a think about whether there is anyone you could ask for an interest free loan just for a short time. This could help you to repay the most urgent of your debts and get on your feet again. Then pay back your helper as soon as you are able.

  • Your creditors

If you are having problems making debt repayments, it is much better to contact your creditors up front rather than hoping they won’t notice. They will.

But if you get in touch with them as soon as you run into problems there may be things that they can do, for example offering you either a payment holiday or reduced payments for a while, or finding some other way of rearranging your debt. It really is worth doing this as it could help you to find a way forward.

  • Professional advisors

If you feel totally swamped by debt, there are a number of professional organisations who can offer you debt advice for free. 

Some good places to start are:

  • Money Helper – a free and impartial money advice service set up by the government.
  • StepChange – a charity offering free debt advice online.
  • Citizens Advice – a charity offering a range of free advice to give people the knowledge and confidence to handle whatever situation they are in.

So if you are struggling with debt, it’s really important to talk to experts who can help you sort things out.

 

We hope that this article will be of help in talking about money with those that you need to. 

Check back here soon for more lifestyle and financial tips from Advantage Loans.