When it comes to financial advice, you might dismiss a 20-something as a little wet behind the ears, but New Zealander Rebecca Hulse raises an point worth, well, talking about.
The 26-year-old author of Where Is My Dy Doorway To Possibilities, who works as a consultant to individuals and businesses that want to rethink their views on money, reckons the taboos around money could be why some people find it hard to come by. “Western society has created a heaviness and seriousness around money which can stop people from feeling at ease around it and this isn’t really conducive to generating wealth,” she says. “We have so many taboos around money and they tie so many people up in knots.”
If you think back to well before you truly understood money, did you absorb some of your parents’ feelings about it – and about wages, wealth and other financial topics? It’s not polite to discuss money, it’s ‘grasping’ to want more money, it’s ‘showy’ to display your wealth, certain people can’t be trusted with money, don’t ask how much someone earns and so on and so on.
Those unwritten rules about money – chiefly, that it’s not nice to talk about it – can end up impacting us in ways we may not realise. And according to research released in 2018, older Australians are much more afflicted than youngsters. A survey by Suncorp found that Millennials were three times more likely to discuss their financial matters with friends and family than Baby Boomers.
Phil Slade, Suncorp’s behavioural economist, says it’s all to do with what he calls social comparisons. “For many people, money is tied to our ‘presentational self’ – the impression we want to leave about ourselves on others,” he says. “Openly discussing our financial situation can allow others to see the gaps between our presentational self and our ‘actual self’, and that makes most people feel vulnerable.”
Mark Bouris, the wealth manager and financial commentator, puts it more bluntly; spending much of your working life being told to sock away superannuation, then finding you’ll be more reliant on the Age Pension than you expected, isn’t something most people are keen to talk about.
“It’s obvious that most Boomers do not have enough savings to retire the way that they want to,” he wrote on news.com.au. “That is a tough pill to swallow, especially if you’re one of the millions of Australians who have worked hard for 40-odd years only to find out that you’ll have to downgrade, downsize and tighten your spending just to make sure your money actually lasts you until you die. It’s not something anyone wants to talk about over a beer at the pub, that’s for sure.”
Yet, keeping shtum about money can rob us, and our kids and grandkids, in several ways. Here’s how.
Your weight? You think in kilograms, or stones and pounds for those who prefer the imperial system. Food? We measured it in calories, grams of fat and nutrients. Clothes come in fairly well-recognised sizes (no matter how much retailers try to bamboozle us by failing to adopt an industry-wide norm). Property is all about square-meterage and location. Vehicles are make and miles on the clock. For most of the stuff of daily life, we have recognised measures and we’re familiar with roughly what’s considered normal, what’s ideal and what’s undesirable, all depending on your circumstances.
But what about money? We hear or read about the super-wealthy and the super-poor but not much in between. Averages aren’t much help because an outlier in either direction can mean the result bears little resemblance to the reality for most of us. And we certainly don’t talk about wages or income (not least because employers are desperate for us not to, because doing so would illuminate the disparities in their pay scales).
But talking about money – our income, our outgoings, our savings, our debt – could help many people get a feel for whether they’re on the right track or unknowingly making big mistakes with their cash. Talking in detail about super balances, for example, during our working lives could save us from a big shock as we get close to retirement.
One of the biggest causes of family fallouts is money. Whether it’s too much, too little or simply having differing opinions on it, money can almost always be counted on to trigger a rift, or at least a deathly silence over the family dinner table. And don’t get us started on inheritances!
Meanwhile, research shows that disagreement over financial matters between a couple is a bigger predictor of divorce than any other common cause of disagreement. In a study carried out by Relationships Australia, a third of all partnered respondents cited financial stress as a key negative external influence on their couple relationship.
If more couples hashed out their attitudes toward money before tying the knot and we all talked openly about our end-of-life plans, including our financial plans, some of these tiffs could likely be avoided.
In the aftermath of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, many Australians are looking at their service providers and calling for greater transparency when it comes to how their money is handled.
Yet if the brave people who testified at the commission in person or in writing had not spoken out about injustices they’d suffered or money they’d lost, the royal commission may have struggled to shine a light on such wrongdoing or, at very least, to identify the patterns of wrongdoing that clearly existed. Those testimonies required their personal finances to be laid bare in front of the nation, which cannot have been easy for the individuals involved, but by speaking up, they did their countrymen a service.
This can also be true when it comes to your wages, as mentioned above. Unless you work under an award or another broad agreement, if you aren’t aware how much your colleagues are earning, how, then, can you know if you’re being fairly paid?
When making important, long-term financial plans, talking to a professional is wise, because they may be able to suggest ways to meet your money goals, such as achieving a specific retirement income, more efficiently and effectively. On the flipside, keepings worries about debt, for example, to yourself rather than seeking knowledgable advice and tackling the issue is only likely to see the problem grow.
The idea of paying someone so you can talk to them about money is probably a stretch for some, but if you get the right adviser, it may be the one money talk that pays big dividends later on.
The greatest thing that parents and grandparents can pass on to their children is knowledge, and there’s little advice that proves more useful in later life than words of wisdom about money. Plus, talking about money teaches your children and grandchildren that money is something worth discussing, thinking about and being comfortable around.
“No one ever talked to me about credit cards so I handled mine pretty badly when I got one,” author Rebecca Hulse admits. “We need to stop the stigma around talking openly about money with family and friends – with real facts and figures – and make it a normal part of everyday conversation.”
Many finance experts emphasise the importance of sharing thoughts about money with your children from quite a young age. Rob Lockhart, a financial educator at Westpac, is one such expert – he believes it’s helpful to start discussing money as early as possible. “Be open with them about the decisions you’re making about how you spend your money,” he told Starts at 60. “We have to involve our children when we’re budgeting for things – for example, saving up our money for our next holiday, or car, or even saving money to buy Christmas presents.”
We’ve all vowed to set aside money at some point in our lives, but failed to follow through on our promise to ourselves. But by talking about our finances, we can make ourselves more accountable by allowing others to help keep us on track. Everyone knows that once you have said you’re going on a diet or are quitting smoking, your friends and family can be counted on to hold you to your word (even when sometimes you’d rather they didn’t!), so why not apply the same rules to your financial pledges?
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