The holidays can be tense enough with the demands of gift giving, cooking, cleaning and sometimes just too many people. Add discussions of financial matters and things can really go downhill.
But the holidays offer a chance to gather everyone in one place. So, if you’re hoping others will kick in to your kid’s college fund, or think it’s time younger adults take on the grandparents’ money matters, this might be a good time to bring it up.
Consult a professional. Financial advisors have tips for broaching sensitive topics without setting off fireworks.
“Talking about finances with family can be awkward, but the holidays present a perfect opportunity to have a short discussion with family members on tough topics like this,” says Laura J. Pilz, a Merrill Lynch financial advisor in San Francisco.
[Read: 5 Signs You’re in Debt Denial.]
The most pressing topics often involve insurance and investments to be used for long-term care for elderly family members, how to protect assets of people not able to manage on their own, and conflict over inheritances, says Len Hayduchok, president of Dedicated Financial Services in Hamilton, New Jersey.
Other experts point out that younger family members may need help as well — advice with investments and budgeting, careers and contributions to college funds or medical bills.
Abby Schneiderman, co-CEO and co-founder at Everplans, an online service for preserving wills and other key documents, recommends inquiring after family member’s insurance coverage, making sure everyone has good security for online services like investment accounts, that the right people will have access to the accounts if needed, and that individuals who need wills have them and related documents like a medical directive and power of attorney.
Apply the one-month rule. Economist Jonathan M. Lamb, author of “Economics is Like Sex,” recommends using a “one-month’s salary rule” for how to tackle financial topics.
“If there is an issue that has a dollar amount under one-month’s salary, such as ‘I can’t make my rent this month,’ or ‘I am behind on my cell phone bill,’ those are discussions that can typically be brought up, talked about, and resolved at a holiday gathering,” he says.
“Anything over the one-month salary threshold, is a topic that typically is not going to be solved over dinner. However, a holiday gathering could be the perfect time to plant the seed to get the ball rolling on the larger-dollar and bigger-picture financial topics.”
Consult family members first. While it’s not helpful to gang up on a family member in need, it does make sense to be sure family members are on the same page before the gathering, says Patrick Simasko, elder law attorney at Simasko Law in Mount Clemens, Michigan.
“One way for children to start the conversation is to have one between themselves first,” Simasko says. “Find out each and everyone’s concerns. Once you identify the concerns, a good way to bring it up is by (describing) other family members or friends’ situations. That will get the conversation going and lead into determining if your parents have all of their paperwork in order.”
Simasko adds, “You don’t want to ever gang up on your parents, especially if they are getting worried about their health.”
So don’t make the occasion into an intervention.
[See: A Smart Investing Plan for 30-Somethings.]
“A first step in your plan may be to contact key family members ahead of the holiday gathering,” Pilz says. “Ask them if everyone can spend just a short amount of time before or after the holiday dinner to discuss a couple of important matters. Explain that it’s not your goal to resolve the matter right away, but to open the door for a more thoughtful discussion in the days or weeks after the holidays.”
“First, scope out the environment,” says planner Jean Marie Dillon, principal at Freedom Financial Counseling in Ashville, North Carolina. “Seek a quiet opportunity, say over coffee or snacks, where one party doesn’t feel threatened or cornered. Simply mention the concern, desire, willingness to have a conversation to share knowledge and state, ‘When things quiet down after the holidays, I’d like to set up a time in January when we can talk.'”
Also avoid gossip, which undermines trust and credibility, and stiffens resistance, Dillon says.
Face medical concerns. Financial issues are often connected to medical ones, Pilz says.
“Today, some of the most sensitive and most important topics that families should discuss as a group include how to care for aging parents and transferring wealth — inheritance,” she says. “We are in the midst of one of the biggest wealth transfers in our nation’s history, but too many parents are not having important discussions with their children about how to handle this wealth, or how to manage their finances.”
Pilz and Hayduchok say it can be wise to have a professional like a financial advisor, lawyer or doctor take part in the talks.
Schneiderman suggests minimizing the tension with a touch of humor.
“Don’t be afraid to ask about the will,” Schneiderman says. “If you have already created a will yourself, bring it up in a playful manner and tout yourself as ‘officially a responsible adult.’ If you haven’t, mention that you’ve been interested in doing it but didn’t know where to start because it seems so complicated. There’s almost always someone in the family who’s done it and will be more than willing to offer advice. This could get everyone talking and give you everyone’s views on the subject.”
Experts also say the process often proceeds in steps over years: offering to be a sounding board on investment decisions, then to discuss long-term strategy with the pros. Don’t demand to take over your mother’s finances the first time she stumbles over someone’s name.
Online services make it easy for distant family members to handle investing, bill paying and other financial matters handed off by an elderly relative, Pilz says. But she notes that the emotional undertow can be hazardous.
[See: 10 Long-Term Investing Strategies That Work.]
“Addressing issues with your family can be uncomfortable, but it is nothing compared to addressing the issue once it has become a full-out crisis,” she says.
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4 Tips For Talking Money With Your Family Over the Holidays originally appeared on usnews.com
