According to a recent survey, many Americans would rather talk about who they’re voting for in November’s presidential election than they do about money. Most people are reluctant to talk about money, but the good news is that conversations about money are becoming more regular. That’s why experts say couples and parents who don’t discuss financial issues can be harmed.
There are few topics Americans want to talk about more than money.
They would rather reveal who they will vote for in November’s presidential election than talk about their finances, according to a new US Bank study based on a survey of 3,500 people.
This comes in addition to another recent Wells Fargo national survey of 3,403 adults that found talking about personal finances is just as difficult as sex.
A Wells Fargo study found that most people are reluctant to talk about money, and disclosing their savings and income are topics they’d rather avoid.
Still, it’s “a big surprise” that most people are willing to talk about the U.S. presidential election when it comes to their personal finances, said Scott Ford, president of wealth management at U.S. Bank.
Preston Cherry, a certified financial planner and founder and president of Concurrent Financial Planning in Green Bay, Wis., says people tend to talk about money because it involves fear, worry, and desire. They said they were more likely to be hesitant to talk about money.
Additionally, Cherry, who is also a member of the CNBC FA Council, said money is a “very personal” everyday relationship, but presidential elections only happen once every four years.
Despite reluctance, families are increasingly opening up about financial topics, especially when it comes to conversations between parents and children, according to research from U.S. Bank.
“The good news is that people are talking more and more about[money]but it’s still at the surface level,” Ford said.
The U.S. Bank survey included 1,000 members of the general population, 1,000 high-net-worth individuals with at least $250,000 in investable assets, excluding their home and retirement accounts, and 1,000 high-net-worth individuals with at least $1 million in assets, excluding their home and retirement accounts. Contains 500 people. Retirement account.
“We missed an opportunity” by not talking about money
Financial advisors say not having important conversations about money can be costly for both couples and families.
“If you don’t know or feel like you don’t have the ability to talk about money with your loved ones and those around you, you won’t be able to effectively build wealth,” says co-owner Winnie Sun. -Founder and Managing Director of Sun Group Wealth Partners, based in Irvine, California. She is a member of the CNBC FA Board.
“Avoiding conversations about money can lead to misunderstandings, financial disagreements, and overall poor future performance,” says Douglas Bonepers, founder and president of New York City-based wealth management firm Born Fied Wealth. “This would be a missed opportunity to plan effectively.” He is also a member of the CNBC FA Council.
Let’s talk “before an emergency occurs”
On the positive side, some conversations about money are happening more regularly, the U.S. Bank study found.
According to the company, today’s parents are almost twice as likely to discuss financial concepts with their children, such as investing in stocks and bonds.
Still, the US Bank survey found that 45% of respondents said they didn’t know their parents’ financial situation. Research shows that many people believe they will have to provide financial support to their parents or in-laws in the future.
Ford said a lack of financial discussion in the family can be a problem if an elderly relative has health concerns, such as not knowing where their checkbook is or getting sick. He recalled having to pay property taxes for his loved ones in a hurry.
“What I want to say to everyone is to have those conversations before there is an emergency,” Ford said.
To better understand an aging family member’s financial situation, it may be helpful to start with mundane items, such as prescription drug costs, and build from there, Ford said.
“Our advice is to just start the conversation, start small,” Ford said.
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Avoiding these conversations can impede important estate planning, health care decisions and intergenerational wealth transfers, Bonepers said.
“If these things are not taken into account, costly legal errors and tax inefficiencies can occur now or in the future,” Bonepers said.
Ultimately, families want to develop a complete emergency plan with knowledge of bank account information, long-term care plans, wills, and durable powers of attorney (legal documents that give someone else the authority to create one) . Making financial or medical decisions on behalf of another person.
Ted Jenkin, a certified financial planner and CEO and founder of Atlanta-based financial advisory and wealth management firm oXYGen Financial, says it takes a certain amount of effort for older family members to be open about their money. He says he may need some stimulation. He is also a member of the CNBC FA Council.
“It’s always best to approach the parents and say, ‘Listen, we don’t care how much money you have. We’ll just keep you out of a ton of legal trouble. We just want to make sure we have the proper preparations for the road,” Jenkin said.
Couples often disagree about money
Lack of communication between husband and wife can also lead to financial problems.
According to U.S. Bank, more than one-third of Americans disagree with their partner on how best to manage their money, both in their current situation and for retirement planning.
At the same time, the company’s research found that 30% said they had lied to their partner about money. Other research shows that infidelity (often referred to as financial infidelity) can often occur when couples are not on the same page financially.
“Couples sometimes have conflicts,” Cherry says. “They struggle to share each other’s perspectives without judgment in order to achieve a common goal.”
To overcome financial conflicts, Cherry says it can be helpful for couples to create a more welcoming environment that involves their partner in money conversations.
Financial advisors often act as intermediaries and objective third parties in these conversations, Ford said.
More than half (53%) of investors surveyed with more than $250,000 in assets said their financial advisor helped them navigate awkward conversations about family finances, according to a U.S. Bank study. There is.
Many people may be hesitant to consult a financial professional if they don’t have enough money or don’t know what questions to ask.
But taking the first step, whether it’s talking to an advisor or doing some research to learn about personal finance, can help change your mindset and reduce financial stress, Sun says.
“Most financial advisors, especially good, experienced ones, will provide you with a free initial consultation,” Sun said. “It’s very powerful, so we need to work on it too.”
