The Importance of Talking About Money
Most people don’t talk about money. From how much they earn, to how much they spend, to how they budget, people don’t like talking about finances. Not only are a lot of people worried that others may judge their money habits, but it’s also frequently considered “impolite” to discuss money, budgeting, and debt.
However, there are many benefits to talking about money with your loved ones. Not talking about money makes it more likely that you’ll end up dealing with money problems and debt. And, if you do wind up struggling with money or debt, not telling anyone about it just means you will suffer in silence.
If you talk to your friends, relatives, or partner about money, you’ll learn more financial skills. You can work to solve problems together. For example, if you’re having trouble budgeting and meeting your financial commitments each month, talking about this situation with someone you trust can help you learn more about budgeting and come up with a strategy to improve your financial situation.
Talking About Money in your Relationship
One area where a lot of people avoid talking about money is in their romantic relationships. Unfortunately, not only is this a mistake, but it can seriously harm your relationship. This is especially true when it comes to debt.
After all, having debt can restrict your life in several different ways. If you have a large amount of debt, you’re likely going to be spending a lot of your income paying it down. This means that you won’t be able to save for things like vacations, emergencies, or retirement. This fact can seriously disrupt your relationship and your future plans.
Plus, having a lot of debt can make it difficult for a person to get a loan, such as a car loan or a mortgage. This fact can affect your future and make achieving your goals much more difficult.
Therefore, if you’re in debt, you’ll want to make sure that you discuss this fact with your partner. You might be worried about doing this but, remember, your partner will find out about your debt one day. You can’t hide it forever. It’s better to have it come from you before it becomes a problem, than to surprise your partner when you’re trying to buy a home and the bank says you’re going to have a tough time because one of you has a lot of debt.
It is, however, important to note that one partner does not immediately become responsible for the other partner’s debts, even if the two people are married. Each person’s debts are their individual responsibility. Individuals have their own credit ratings and these do not affect their partners. However, this gets a bit more complicated in the case of jointly-held debt. For example, this includes debts where one partner co-signs on a loan for the other, loans that are taken out by both partners together, and situations where one partner uses a supplementary credit card (one which is linked to the primary cardholder’s account).
How to Talk About Debt
While conversations about finances and debt are certainly important, a lot of people don’t know how to bring these topics up. They don’t want to sound like they are nagging their loved one by asking about how much they spend, and they might be embarrassed to tell someone they care about that they are having a difficult time financially.
One good way to bring finances up is to ask the other person a financial question that involves them giving their opinion. For example, ask “How much do you think you should save for emergencies?” This can become the start of a conversation about spending versus saving. If you have debt yourself, you might want to start by saying “What do you think is the best way to pay down debt quickly?” While it may be difficult, this would be a good conversation to reveal your debt issues.
If you have a lot of debt and are worried about telling a loved one about it, you might want to come up with a plan for paying down your debt before you mention it to your friend or relative. That way, you can say “Yes, I have a lot of debt, but here is my plan for paying it down. What do you think?” That will turn the discussion into a productive one (“How can we come up with the best plan to pay down debt?”) as opposed to a confrontational or judging one.