Having a Family Conversation about Money
By: Family Service PEI & Credit Counselling Canada
Do any of these sound familiar?
- The holidays are coming up and your adult children will be coming to visit. You know that you should talk to them about money and your decisions for the future. You are worried about having enough for retirement.
- Your children are young and you know you should be teaching them about money. Where do you start and how much should they know about your family finances?
- Your kids are growing and talking about ‘what they want to be’ after high school. How do you introduce the idea of saving for post-secondary education and what you might be able to provide?
- You’ve just become engaged and you want to have the money conversation since you are concerned that your fiancée may be in debt and you need to have a plan going forward.
If so, it’s time to have the family conversation about money.
These conversations are always better held sooner than later. Even in the case of an engaged couple, the money conversation should happen earlier in their relationship so that the two partners could determine their financial path forward. Couples in longer term relationships need to talk regularly about handling debt, savings for emergencies, retirement and health care.
Let’s start with seniors and their adult children. This is an important conversation to have as early as possible. This is also one of the talks that you don’t want to have at holiday time. Leave this topic for another visit and enjoy the holidays together without discussions that could be stressful.
Here are some additional tips to consider:
- Have a talk with your spouse first and plan ahead before talking to your adult children. Make a list of what topics you do and do not want to talk about. The best way to prevent financial challenges is to plan ahead when you are physically healthy and still living in your home.
- Take it slow, this may be an awkward and difficult conversation for them so be considerate of your adult children’s feelings. It can be a tough conversation when talking about last wishes for burial/cremation, sources of cash flow, investments, assets and liabilities, insurance coverage, powers of attorney and wills.
- Know that you will always have the final decision; after all it is your money and your life.
- Ensure that you have follow up conversations particularly since they likely won’t have all the information in one sitting and they need time to assimilate and make decisions.
At the end of the day, what is really at stake is the opportunity for you to communicate your financial wishes, and get help to make those wishes come true. By communicating your wishes early on, you are:
– Making it easier for your friends and family to help you with financial issues in the future.
– Making sure everyone understands your wishes and desires, eliminating confusion.
– Creating a support network with whom you can talk to about concerns, ask questions, or get advice from.
Everyone needs to have money conversations no matter the stage or age of your family members. Sharing examples of things that you have undertaken may provide encouragement for them to do something similar. For instance, having made a power of attorney for finances and personal care makes you feel more comfortable about any future situations. This may ease the way for them to take this step.
Remember that money is a personal matter. Everyone has boundaries around personal information and you should ease into these discussions with patience and empathy.