How To Be Honest About Your Finances
The great thing about your bank account is that it is 100% private and it is your decision with whom you share that information. In this modern social media driven world, everyone knows everything about each other. In one of the novellas, Sherlock Holmes was able to conclude the wealth of a man by his hat. Nowadays, the richest of us shop in vintage shops and the poorest of us wear designer labels. It’s hard to figure out who has what – which means you can hide your wealth or your poverty in plain sight. So then, who should you talk about your finances with, and why?
This post is about staying open and honest however that doesn’t mean with anyone! In my life, I stay quiet about the exact numbers we have unless it’s my Mum, my partner or one of my 3 friends I could talk about this with and it wouldn’t change things. If people ask me how my financial journey is going, I stay vague and say things like ‘we are at 60% of our house deposit goal’ which gives people an idea without them making judgments about you.
Unfortunately you can’t tell just anyone about your finances because of the backlash you may face. If you’re comfortable with the possibility of what some people may say or think then shout it from the rooftops. However, for my mental health, I like to keep the people who know about my bank account number to less than 5 people. With these 5 people however, everything is laid bare with full transparency, as I believe that’s the only path.
Jeffery Dew conducted a study at Utah State University that found that spouses that fought about money once a week or more were 30 percent more likely to get divorced. Going into a marriage with full transparency, respect and guidelines may not be the sexiest thing for newlyweds but it is the only way. If you struggle to bring up money, set a date and time where the two of you will sit together and discuss money openly. It can be hard to bring up something you’re ashamed about in everyday conversation but setting an hour around the dining table can help.
If you struggle to talk – or it fills you with too much anxiety to do so – a weird but wonderful trick is to start off by keeping your finances talk to letter or email only. You could even share spreadsheets and budgets together if that helps. Eventually it’s best to move to real conversations however it’s a jumping off point.
Together, analyse and discuss how you both think about money. How did you parents handle money? Are you making the same mistakes? Are you over compensating the other way? Find out why you shop too much or save too little and together you can break the cycle.
Being an authentic and transparent person is hard but remember that owning up to past mistakes, admitting them and wanting to work on them is a positive thing. Telling someone you trust about a £50k debt may not sound like it will feel good but I promise you that it will. Two minds can tackle the problem better than one.
On the flip side, it can be extremely hard to tell a friend how you’ve climbed yourself out of a huge debt hole and have finally accumulated a £1,000 emergency fund and then offer nothing when they tell you they have a £500 credit card that needs paying off. I’m not saying it would be this scenario as this black and white – but sometimes, when discussing finances, there is an elephant in the room where one persons savings could solve a friends problems. However, stay strong, and remember that any friend that would expect that of you is not one you should be discussing finances with.
Nobody who can possibly call themselves a friend, a partner or a close family member has the right to judge you. You must remember this. If you tell someone about your finances and their response is to judge the decisions you’ve made then please drop them like a brick. The likelihood is strong that by the time you’re having this conversation with them, you’ve already acknowledged your faults and are actively working on them.
You don’t need their judgment to succeed.
This post was originally written as a guest post for themoneypanel.co.uk. Please go check them out and give them a follow today.