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Family Finances: How to Talk about Money - a Taboo Subject

Provided by the International Finance Corporation


Money is a subject which remains taboo in many households and societies, never to be discussed — unless forced to.  It remains a taboo subject for a variety of reasons.  Some feel it is impolite to discuss finances.  Others want to hide financial problems from their loved ones, least they worry.  And some are embarrassed to ask questions if they don’t understand basic financial principles.  They feel that they should already know the answers.  So they prefer to remain ignorant rather than risk the humiliation of letting others discover their financial naïveté.  But when it comes to money, the more it is discussed, the more it is understood.

The irony is the assumption that others understand money better than you or that high-income earners always are more successful in managing their money than someone from a lower-paying occupation.  Actually, few people have received any formal education in basic personal finance. So, you may believe your knowledge is lacking when, in fact, others’ ignorance may well exceed your level of knowledge.

Even though it may be quite uncomfortable to discuss money at first, after a while, it will become routine.  For example, couples should work on identifying family goals such as buying a home or education for the children.  Once they agree on certain goals, they can then develop a savings plan to achieve them.

No money question should be considered too unintelligent to be asked.  The mistake that many people make is that they ask too few questions, especially during complex financial transactions.  Their fear of appearing unwise stops them from asking clarifying questions that may uncover added costs or mistakes in calculations.   

Those who adopt an open approach to money may discover themselves making radical departures from their old way of doing things.  Since many of these new practices are financially prudent, all families should resolve to talk about money as much as possible.  Talk to your friends, colleagues, parents and children.

Of course, you might not want to share the details of your salary or the extent of your debt level beyond your immediate family and others you fully trust.  But financial fundamentals such as investment ideas and cost-cutting strategies are ideal topics for everyday money conversations. The frequency of these conversations almost certainly will have a direct correlation to the level of your prosperity — the more the better.

 

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