Have you had the financial facts of life chat?
Talk Money Week aims to encourage us all to start conversations about cash. learns how
THE idea of starting a conversation about money can make many people feel stressed, or even embarrassed. But by having that vital chat, you could improve your own financial wellbeing – and perhaps even end up feeling relieved.
Talk Money Week (November 8-12) aims to encourage people to start conversations about money.
“Talking openly about money is vitally important for our health, wealth and relationships,” says Sarah Porretta, propositions, insights and external engagement director at the Money and Pensions Service.
“It means we can be prepared to tackle potentially tricky situations – whether it’s splitting a bill with friends, broaching the topic in the workplace, or helping a child form good financial habits.
“People who talk about money make better and less risky financial decisions, have stronger personal relationships, and feel less stressed or anxious and more in control. Whatever your situation, Talk Money Week is the perfect opportunity to start.”
In general, Sarah suggests talking about money when you’re in a comfortable setting, listening as well as talking, and making sure you end the conversation with some positives.
Here are some ideas for approaching money conversations in specific situations...
Talking money with friends
With some skilful negotiation, you can avoid friendship fallouts over money. Zainab Kwaw-swanzy, Millennial finance specialist at Barclays, says: “Be honest about what you can afford. Whilst this might seem daunting, it’s unlikely your friends will choose money over your friendship.
“You never know, they might also be worried about their own finances, so breaking the ice could be a big relief for them. Money shouldn’t be taboo, with honesty and
transparency strengthening a friendship.”
She adds: “Don’t be afraid to say no. There is absolutely no shame in pushing back on someone else’s expensive choice, or speaking up against an unfairly split bill if it takes you out of your budget. Being in control of your finances is something people should respect, rather than judge.”
By being proactive and sharing ideas, you could also put forward free or cheaper options for fun activities, Zainab suggests.
Keeping a separate budget for socialising can also help you to work out how much money you have available – and take a firmer stance – if friends’ suggestions would bust your budget.
Talking money with an employer
Laura Stewart-smith, head of workplace savings and retirement at Aviva, says: “Some employers will be able to offer external financial education either through a specialist provider or an employee assistance programme (EAP). There are a number of 24/7 helplines and online resources at hand that can offer information about financial issues.
“One of the areas that employers can offer important support is retirement savings. As a result of autoenrolment in 2012, all employers must provide a pension to those employees who meet the criteria. The minimum auto-enrolment contribution including employee and employer contributions and tax relief, is 8%.
“However, employers often offer higher matching contributions. It’s so important that employees understand the advantages and benefits of their workplace pension.”
Talking money with your bank
Eric Leenders, managing director of personal finance at trade association UK Finance, says: “Banks and lenders are ready to help if a customer is struggling with their finances. There’s a range of tailored options for people who need support and it’s always best to speak to your lender sooner rather than later.
“Leaving it too long could worsen money problems – don’t put off the conversation with your bank, get in touch and find how they can help.”
Talking money with children
“We know from research that the way we behave and talk about money is linked to our early experiences, which is why it is also important to start speaking about money with children as early as possible,” says Sarah.
“The simple act of striking up a conversation with a child can help form their financial habits.”
She suggests leading by example, so when out shopping you could compare prices of items out loud or ask children to tell you the different prices of products
Talking money with a partner
One of you may be better at managing money than the other, but be open and honest, particularly at crucial life stages when you’re combining your finances – such when you’re buying a house or starting a family.
There may be some situations when you should be wary though, as romance scams are rife. If a potential partner you’ve been chatting to online starts asking detailed questions about your finances, or claims they need money urgently, this should ring alarm bells, so discuss it with friends and family you trust.
UK Government-backed Moneyhelper’s online guide How to have a conversation about money - has further tips for positive chats about finances (moneyhelper.org.uk).