Key takeaway: We’ve all been taught that talking about money is a no-no, but it really should be a yes-yes. Opening a conversation with our friends and family can be an act of vulnerability, but it can also help us see their lives—and our own—more realistically.
We're taught from a very young age that it's rude to talk about money. I’m not sure who we are protecting with this perception, since it’s an attitude that does more harm than good. As a financial advisor, I’m in a unique position where plenty of people have told me how much money they make. Yet I'm always amazed at what friends and even family don't know about one another.
When we look around at what the people close to us appear to have without knowing what money is coming in, it's easy for us to imagine that everyone has more money than we do. However, the poorest indicators of wealth are items secured with financing. Anyone can lease or finance a luxury vehicle. Most mortgage lenders will approve you for a debt load that is much higher than your ability to pay comfortably. It's also easy to swipe a card to pay for anything in the moment.
Sharing Financial Pains and Successes
It's a major act of vulnerability to talk about money, yet it can also be powerful. If you're working toward paying off debt, you're likely not alone. By reaching out to someone in the same spot as you, you can keep each other accountable and reach your goals together.
If you’re making a breakthrough in your career and finally seeing some traction and compensation with it, celebrate the achievement with your peers.
If you’re the friend who has greater financial means, there's no shame in enjoying the luxuries. But be realistic with your peers so that everyone is on the same page. I've paid for rounds of drinks because I knew I made more money than the people with me, and I've also had tabs covered for me.
So next time you go out to eat with friends, everyone should bring their net worth statements … I'm kidding, but do be aware of where your friends are on their financial journey by talking about it. Talk about your financial goals, talk about your income, talk about your debt, and don't judge one another.
Seeing Past Partial Truths
I sat in a seminar a while back about how to negotiate anything, including compensation. When we began to open up and talk about money, we all realized that we’re trying to keep up with one another’s perceptions instead of realities. We were all in different places in our careers with different levels of financial means. It helped to be real with one another.
I left that seminar with focus and a plan to increase the value I bring in my career and the compensation along with it. I’ve replaced “I can’t afford that” with “That’s not a priority for me right now.” I left the seminar feeling untethered to any expectation put on me by my job title or my peer group, and I’ve attempted to bring that same vulnerability into my relationships not just for myself, but for the sake of my friends and family.
I would hate for someone to hold me up as an example of financial success when they don’t see the whole picture. Everyone with an Instagram feed can understand this. You know most lifestyle bloggers get their products for free, right? And then they are paid to promote them to us, in perfectly backlit squares of joy.
I love Instagram, so I’m not complaining, but it only tells you a partial truth. We can do the same thing when we’re not honest about money with our peers.
How to Get Talking
Start by being vulnerable with yourself. Focus on your goals and how to get there, and then share that with your peers. You may be surprised that you end up with partners on the journey instead of judges along the way.
Ashley Reiter, CFP®, is an Associate Wealth Partner who thinks of financial planning as a map that helps people reach their goals. Outside of work, she enjoys time with her family, friends, and two rescue dogs.
The opinion of the author is subject to change without notice and must be considered in conjunction with relevant regulation, as well as subsequent changes in the marketplace. Any information from outside resources has been deemed to be reliable but has not necessarily been verified. Each individual has unique circumstances to which this information may or may not be relevant. Under no circumstances will this information constitute an offer to buy or sell and it does not indicate strategy suitability for any particular investor.