How to Effectively Communicate Crucial Financial Matters with Family
It’s no secret that consumers – especially adult children – have much to think about when it comes to finances: from how they will help their aging parents and pay for their child’s college education at the same time to affording retirement. It’s not uncommon for family members who are struggling with finances and in need of help to not know how to communicate the problem to loved ones. To help consumers, national nonprofit American Consumer Credit Counseling (ACCC) highlights five financial tips to help consumers discuss difficult financial issues with their families.
“Discussing personal financial matters with family members can be quite nerve-wracking and at times uncomfortable, especially when discussing stressful topics, such as saving for retirement, paying for education, and the location of important financial documents,” said Steve Trumble, President, and CEO of American Consumer Credit Counseling. “It is better to tackle these difficult conversations as early as possible to avoid the added stress and anxiety that will inevitably occur in times of crisis.”
According to a Fidelity Investments Family & Finance Study, 67 percent of families disagree about the appropriate time to discuss parents’ finances, with many holding off until they are approaching retirement. Although 93 percent of parents feel they should not be financially dependent on their children as they age, only 30 percent of adult children feel this way. The survey also found that 93 percent of children and 95 percent of parents say they have better peace of mind around the issue of finances after discussing it.
ACCC provides five tips on how to properly discuss difficult financial matters with family.
- It’s all about timing – It’s best to think through the best time to hold these conversations. For example, talking about serious financial matters while everyone is sitting around the table for Christmas dinner probably isn’t the best decision. Choose another time to approach a family member to tell them you would like to have a private conversation with them about key financial matters. You want to make sure everyone in the conversation is in the right state of mind.
- Conentrate on a single issue – Avoid bombarding your family members with numerous topics. Pick one topic to focus on within a single conversation and arrange another time to speak about a separate issue. Conversations about finances is one of the only situations in which the phrase, “kill two birds with one stone,” does not apply.
- Choose your words wisely – The last thing you want is to be deemed as “pushy” or “rude” when having money talks with family. You may be incredibly stressed, frustrated, and tempted to scold, but take a deep breath, relax, and remain as calm and diplomatic as possible.
- Inquire about the locations of important financial documents – When engaging in financial conversations, be open about revealing the locations of important financial documents – such as last wills and testaments and life insurance information. Exchange accountants, attorneys, and other important contacts in the case of crises.
- Be understanding – People change, people age and situations can shift very quickly. Have compassion and understand that times can get tough relatively quickly – particularly for those dealing with a major unplanned expense. If you sense a family member may be struggling financially, approach the conversation with care and offer a helping hand. Creating solid family relationships will have a long-lasting positive impact. – Source