No matter how great your relationship is with your family, there are some topics you just don’t enjoy talking about with them. At the top of that list for many families is money.
Money is an inherently emotional topic, and when you layer in family dynamics, it’s easy for disagreements to get blown out of proportion when emotions take hold.
A recent report from Edelman Financial Engines found that more than a quarter of those surveyed have had fights with extended family over their finances. But financial conversations among family members are essential. Keep reading to find out why.
Experts Say Not to Skip Family Discussions About Finances
Still, experts say that it’s essential to talk to your family about financial issues — especially when it comes to estate and inheritance topics. Avoiding these conversations can ultimately lead to more significant conflicts or problems down the road.
[Read: Estate Planning Tips to Keep Your Money in the Family.]
“It’s important for parents to talk to their adult children about money so that it gives them the knowledge to make better financial decisions,” Craig Kirsner, president of Kirsner Wealth Management in Coconut Creek, Florida, says.
“It can help reduce their financial stress and ultimately improve their financial security. It’s important to discuss and foster a culture of saving and investing and wise spending within families,” he adds.
The Edelman Financial Engines report found that 38% of Americans wished they had talked more to their families about finances and financial goals. More than 80% said talking about finances helps resolve disagreements.
[READ: Better Money Habits to Start Now.]
How Do You Start a Conversation With Family About Money?
Having financial talks with family is easier said than done. Follow these tips to make the conversations go more smoothly:
1. Schedule a Family Meeting
It’s easy to put off uncomfortable conversations, so force your family to get started by putting a meeting on the calendar. Pick one or two topics to focus on at first (your estate plan, for example, or a request for help with a home down payment) to keep the meeting focused.
[READ: How to Lend Money to Family and Friends.]
“When it comes to estate planning, you don’t necessarily have to share exact dollar amounts, but you should discuss expectations about how things are going to be divided up,” Brett Anderson, president of St. Croix Advisors in Woodbury, Minnesota, says.
Do your best to listen respectfully and without judgment to all parties during the conversation. If the discussion gets heated, take a break and agree to return to the discussion when emotions have cooled.
2. Bring In Third-Party Help
There are some financial decisions for which multiple family members simply can’t find common ground. In those instances, bringing in a neutral third party, such as a financial advisor or a money coach, can help move the conversation forward, according to Nick Foulks, advisor and director of communications strategy and client engagement at Great Waters Financial.
3. Keep the Conversation Going
The more you talk about money, the easier it gets. So, plan to revisit your money conversations once a year or so. That gives you an opportunity to talk about how financial situations may have changed or if there are goals or other financial milestones you want to let your family know about.
“It’s better to be proactive than reactive,” Connor Spiro, senior financial consultant at John Hancock Advice in Boston, says. “God forbid that day comes and the appropriate information or discussions haven’t been had. That can leave the adult children with quite a headache and cause some of those money conflicts among siblings or other relatives, potentially.”
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How to Talk About Money With Family — and Why It’s Important originally appeared on usnews.com
