Modern Manners + Etiquette: Talking About Money
Monday, June 20, 2011
The greatest etiquette taboo is talking about how much one earns and how it's spent. Nevertheless, the ability to communicate about money can make or break a personal or professional relationship. There's nothing I find more distasteful than discussing money. I would rather talk about STDs than about my income or investments.
Recently, Forbes magazine advised newlyweds-to-be that a blissful marriage requires full financial disclosure before the wedding. We all know couples who have money problems because they weren't up front about their resources from the start: she thought he had money, and finds out he doesn't: he assumed she had more. As it turned out, she was paying off student loans and he was juggling credit card debts. A study by the investment management firm T. Rowe Price found that parents find it harder to talk about money with their kids than talking about drugs and alcohol. So it's no wonder newlyweds-to-be have trouble disclosing their finances. Either we learned about money from our parents, or our parents never talked about money, unless perhaps there wasn't any to talk about.
A 2009 study published in the Toronto Globe and Mail found that parents find it far easier to talk to their kids about sex than finances. “I think parents just feel very uncomfortable with the material. I think they lack confidence in whether they even understand finances well enough for themselves, let alone to teach it to their children,” theorizes Peter Aceto, director of the study. How money was (or wasn't) discussed at home during childhood has a lifelong effect. Avoiding money talk can destroy your life. We hate to talk about money because whether we're starting out at the bottom of the ladder struggling with debt, or we're further up the ladder ready to take our wealth to the next level, our common denominator remains our two most important priorities: food and shelter.
Talking about spending habits “really does lay you bare, and that's threatening,” says Craig M. Gay, A Regen College sociologist and author of Cash Values: Money and the Erosion of Meaning in Today's Society. “It really does cut to the depth of who you are. Most of us don't want to be that transparent with each other, (but) being less private and more accountable in this area is probably a good idea.”
Money manners matter
Sadly, husbands and wives are the worst offenders. Why in such an intimate relationship are we so reluctant to talk about money? When money isn't discussed the problem grows. Ironically, when the couple finally have that conversation where all is divulged the drifting couple often become closer. Once the problem is disclosed and the spouse suddenly understands the unspoken money issue that is causing distance between them, they realize the silent threat of debt was what had been pushing them apart.
The Equality In Marriage Institute offers this tip: Money is the number-one culprit in marital misunderstandings.
Talk frankly about financial matters. Furthermore, the institute advises that talking about your philosophies and experiences helps a couple to define to each other what their financial personalities really are, which helps couples to reach their goal of making a financial commitment about finances.
Money isn't a romantic or sexy subject but secrecy can be a silent killer, says Forbes magazine, and not surprisingly, financial problems are the leading cause of divorce. These days when more and more young people are holding off getting married and have lived independently before marriage, they're not in the habit of sharing the details of their spending habits. The most frightening part of suddenly having a joint bank account with someone you've just married is having in black and white nearly every cent you've spent with your debit or credit card charges glaring at you from your joint online active statement. Gee, is that how much he pays his personal trainer. I hope he doesn't notice what I spend on spa treatments. Did he really spend that much on the necklace he bought me for my birthday? Does that mean I have to spend that much on his birthday present? With sex if you don't perform well, or perhaps perform too well, it's gracefully forgotten the next day, whereas she's going to remember for a long time how much you paid for that Viking outdoor gas grill.
Money symbolizes different things to all of us, whether it's love, power, control, security. As Jean Chatzky of Money Magazine and the Today Show recommends: Find a neutral time to talk, talk about your relationship with money and be prepared to compromise, know where you stand and be honest with each other. When you have trouble talking about money bring in a third person (financial consultant, marriage counselor, or therapist), and follow these Dos and Don'ts:
Track your spending
Agree to disagree
Designate a bill payer
Make a budget
Have at least one credit card in your own name
Teaching money matters to teens: teaching fiscal responsibility
Be savvy about your teen's spending. Apparently, teens are spending a record high, however, we're not preparing them for the real world because they don't understand finances, according to Teenage Research Unlimited in Northbrook, Illinois. Did you know that the average teen spends $85 a week? The teen economy exceeds $141 billion a year. News from a JumpStart Inc. (a nonprofit in Northeast Ohio) survey of over 4,000 high school seniors showed that 32% used credit cards and 43% had debit cards. The scary part of the findings were that teens do not know how to compare credit cards in terms of fixed or variable annual percentage rates, finance charges, periods of grace, etc. and then we wonder why they fall into the hell of credit card debt in college!
The first week of college, teens will find themselves swamped with debit and credit card offers from the local banks. More often than not, the teen gets on a downward spiral to bad credit by overspending. It can start as innocently as assuming monies electronically transferred from either parents or financial aid institutions are always available, but in fact aren't available to them because of, say, a three-day-long weekend. Out of cash, they use the card and find out too late it was an expensive mistake because the account is overdrawn and treated as a loan with high interest. That debt accumulates and effects his credit rating. Even though he has a diploma when he graduates, he also has bad credit, which he finds out when he goes to sign his first apartment lease. There are other stories of teens thinking they have more than they do because they didn't understand FICA deductions from their part-time job.
An amazing 50% of the students tested by JumpStart failed. 27% answered incorrectly that there is a national sales tax deducted from paychecks, 52% assumed that if their credit card is stolen, they don't have to pay the charges, however, they didn't report the card missing in a timely fashion, and 51% didn't know interest on a saving account is taxed.
Certainly one of the most damaging facts learned from the JumpStart test is that 86% of the teens are given money from their parents on an “as needed” basis, despite the fact that experts believe this is the worst way to teach fiscal responsibility; the only proven way is by budgeting with the teen his/her expenses for a typical week and the teen is given only what the parent can afford toward an allowance that isn't too much, nor too little. They also advise modeling good money management by allowing teens to listen in to your conversations about finance to show them the process of how you determine what gets paid first, after the rent/mortgage/insurance/car payments/food have been budgeted in, and how much to save and how often, for vacations and birthday or graduation celebrations. Many experts even recommend helping them through the process of budgeting (For instance, two trips to Starbucks, would pay for a movie ticket.); but warn parents not to bail them out, nor pay them to do chores or for good grades.
Remember, money issues don't have to be emotional. Saying no to your child can be hard: Do you really need a new dress for the dance when you already have dresses hanging in your closet? It's particularly hard talking to kids about money when times are tough, but you can remind them that many families you all know are going through hard times too. You might not know that because too many people think talking about money isn't polite.
Among the people we most care about, honesty and transparency about money may be one of the ultimate forms of good manners.
Didi Lorillard writes about all matters of manners and etiquette on NewportManners.com, but please don't ask her for financial advice as she doesn't fully understand the world of finance. Follow her on Facebook, Twitter, and LinkedIn, but only after you've read her GoLocalProv columns listed below.
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