Do you talk about money as a family? If you do, are you comfortable about it? Do your kids understand your money values? Do you and your spouse agree on how you use your money, how you save and invest? Do you know if your parents are financially secure?
If you’re like the majority of families, chances are you have not fully discussed these issues with your family members yet. It’s interesting to note that you may be comfortable discussing your investments in the stock market, real estate and other businesses with your colleagues, but when it comes down to personal money issues, you feel awkward discussing it with your loved ones, your family members. You know why? Because personal finance is emotionally charged.
Money is one of the most misunderstood commodities in the world. And sometimes the closer we are to a person, the more difficult it is to talk about money. Adult siblings are uneasy discussing it because it might be construed as bragging on the part of the more affluent ones. Asking your parents about the disposition of their assets might be construed as lusting for inheritance. Discussing money with young children may be perceived by some as raising worldly kids. Talking about budgeting, saving and investing between spouses may cause irritating conflicts.
So to avoid all these we end up not talking about this very important topic. And what happens?
Here are some of the usual consequences. When parents leave this world without a clear-cut will, children squabble over the assets left behind (whether big or small). Adult siblings are not able to meaningfully help each other financially. In the extended family set-up one child may feel the burden of caring for aging parents who are not financially independent. Children who were shielded from their true financial problems grow up to have a difficult relationship with money. Couples who are not able to discuss money positively end up being part of the alarming marital break-up statistics of 7 out of 10 due to money.
In the book Let’s Talk About Money by father and daughter Charles Schwab and Carrie Schwab-Pomerantz, they narrate the story of Pete and Eleonore, a couple, who got married in 1973. The wife, a banker, was expected to take care of the finances, while the husband, a schoolteacher, was expected to take a backseat with regard to money matters. However, when their child was born with a disability, they decided that Eleonore had to quit her job to become a stay-at-home mom and take care of their son. Pete became the sole breadwinner and somehow, the financial decision-making was unconsciously passed on to him. Unfortunately, he became a big spender. When they moved from New York to California, Pete saw a lot of his colleagues driving a BMW. Maybe he thought it was the “state car” and he should be driving one too! So he bought one. Over a span of 15 years, he bought another car and another and another – just as soon as the “old car” reached 20,000 miles or a newer model captured his fancy. He never thought of consulting his wife about his car and other purchases. And this almost cost their marriage.
Since they never discussed money, let alone saving and investing, Pete never knew how resentful his wife had become about not being able to participate in the financial decisions for the family. So one irritation led to another without proper communication until they decided to file for divorce. They consulted a financial planner to help them divide their assets. The financial planner noticed that the two still cared for each other, “You two obviously still care for each other, what are you doing filing for a divorce?” The couple finally asked themselves that question.
After counseling and proper communication especially on financial decisions, they remained married and now have a better relationship.
Can you imagine how many separations and family quarrels can be avoided if money matters were discussed freely and healthily among family members?
If you’re in a similar situation, or want to avoid having future misunderstanding with your loved ones because of money issues, be proactive and do something about it. It does not have to be an “in-your-face” type of confrontation. Do it little by little. Start with your nuclear family.
Marvin and I have openly discussed money from the time we were boyfriend/girlfriend. When we had our children, we also included them in the discussions about money. We think that their knowledge about money has likewise contributed to their self-confidence as they face their challenges.
If you think it’s about time your family talks about money, now is an auspicious time to start because April is Financial Literacy Month. This is also the reason why we decided to hold a workshop on Family Finance this month. We invite all of you to make it a bonding activity this summer.
We will be sharing what we know about Family Finance.
Marvin will share insights derived from his extensive experience in the finance industry spanning 30 years. He was the founding president of the Fund Managers’ Association of the Philippines and president of the Trust Association of the Philippines in 2009 – 2010. He is currently the Chief Investment Officer of the country’s largest bank.
I will be sharing mommy insights about being the “Family CFO” (Chief Finance Officer), and how I continued to use my investment banking skills as a full-time homemaker raising our children to be investors right out of their diapers.
You will also hear it from the boys! Martin, oldest son, is now a young professional who’s a brand assistant at a manufacturing company. Enrique, second son, is an incoming college junior taking up Management Engineering, and Anton, youngest son, is an incoming high school senior, both at the Ateneo de Manila University. Your children will better understand when they hear it from children who actually do it. Plus they will be holding games to deliver their messages more effectively.
We will also have activities that will allow you to look deeper into your relationship with money. It will be a fun-filled afternoon of learning. There are limited slots left for FQ: A WORKSHOP ON FAMILY FINANCE on April 27, 2013 at the Seameo Innotech (near UP Ayala Technohub) 1:00 – 5:30 pm. To reserve email firstname.lastname@example.org or text 0917-5395770. Tickets are at P500/head.
Start your family’s financial literacy journey in this Financial Literacy Month! And make it a tradition to have an annual bonding activity in April to assess your family goals.
Wishing you and your family financial happiness,