Money as a topic in the family & friends is a taboo. You discuss money with someone only when you are extremely willing to confide or have a common objective. Candid discussions about money between family & friend are rare. Nevertheless, the need to discuss about money within the family and friends is generally always high. As a spouse, you need to speak about your money fears and aspirations. As a parent, you need to talk to kids about good and bad money habits. As a caretaker, you need to speak with retired parents about their financial security, nominations, inheritance, wills, etc. As a friend & colleague, you either need to offer money help or just want him/her to stay off the wrong financial path. The degree of the above needs may vary from person to person, due to their respective individual circumstances. No matter how important, these discussions are difficult to start and handle. There are three reasons for that: Money is a private affair (just like your married life) and any inquiry can be considered intrusion. Secondly, money being a social barometer for success, any discussion around that can be considered flaunting or let down. Thirdly, money means different things for different people. Therefore people can be ultra-protective or just reckless about money.

The fact that no one talks about creating a WILL to one’s parents is a case in point. Likewise, when wife is unable to communicate the need for husband’s adequate term assurance is also a very common affair. Couples fighting over money is generally because they associate different goals with the common pool of money. Splurging on conspicuous items to keep up with the social circle also has roots in the kind of money signals that friends/family send to each other.

How to communicate with children about money

Often, our bad money habits as adults have a lot to do with our upbringing. Children don’t follow your preaching. They imitate your actions. As parents, if you often give signals that a bigger house, a bigger car, or a lavish vacation is the source of happiness, then your kids are likely to follow the same in their adulthood. If you have been an extensive loan borrower for extravagant consumption, then your kids are likely to take the game to the next level and fall in debt traps. Also, if you have not demonstrated to them the virtues of delayed gratification, then they are likely to take short cuts in life. Lecturing your children when you are angry with their demanding behavior, shall bring little change. Instead, living like a role model is probably the best course available with you. Remember Mahatma Gandhi here for what he said: “Be the change you want to see!” It is going to be terribly difficult. But no one ever said that parenting is a cakewalk!!

How to communicate with old parents about money

Communicating with your parents about money is a different chapter. Parents generally pretend that all is well with their finances, though they might be worried inside about the limited resources they have. They are worried about inflation, medical bills, monthly income for the wife (if the husband is the first to go), division of the estate between the children, etc. But all these fears generally don’t come up in front of children. It becomes tricky to communicate because parents often hide their fears. To break the ice, as their responsible child, you need to communicate slowly and gradually. Generally talking about Mediclaim coverage is a good starting point, followed by tax planning and investment opportunities for senior citizens. You can then open up with your financial planning model being followed, to take the discussion further. To make them comfortable, you may seek their opinion about the investments you are making.  You should write your own WILL and then discuss why you felt that it is so important for the security of your family. Your parents may or may not open up here! In that case, you can arrange a meeting between your parents and your financial advisor. Before the meeting, convey to your financial advisor about the need to convince your parents about the need for a Will. Generally, the above strategies work successfully and saves from a lot of financial suffering later.

How to communicate with spouse about money

Spouses should become very candid about money. Either of the party should never shrug off the suggestions from each other. If they fail to agree on a financial matter, they shouldn’t shy away from taking the matter to their financial advisor. They both need to understand that money is for peace of mind. Any decision that can hamper the long term peace and security of the family should be avoided. Be it too risky investments, or too safe ones. They need to understand the long term costs of buying a Rolex or a Diamond set. Btw, there are individuals who would habitually buy prohibitively costly items and still consider them as investments. Oh you see, we just invested in a Porsche !! It is a way of avoiding any guilt, and also gives you bragging rights!

How to communicate with friends about money

Talking to friends should be simple…isn’t it ! Afterall, we have shared what not with our friends during the school and college days. But, something changes once we get in the rat race of earning money. A kind of glass wall gets erected between friends, especially when it comes to money. “You should never ask a man about his salary !” Whoever said this perhaps knew how private this affair is. Once, childhood friends, they become victims to false money pride or money shame, depending upon their attitude. The society gives the highest honor to rich (ignoring the methods of earning…largely) and just overlooks the poor even though he is brutally honest. Therefore, everyone wants to be rich, and if the incomes are shared, then the comparison shall start. To break the glass wall, it requires the same kind of effort as required with parents. If you think that your friend is in possible need for help, yet he is not coming forward, then the onus of communication lies on you. You may gradually develop the topic of financial planning, seeking his advise and opinion. “Hey buddy, which mutual fund looks good these days?”….or …”what is the Sensex outlook for next 5 years?” Share with him your thoughts about the ways to accumulate wealth (I have created a financial plan with written goals. I wish I had created this earlier) and also the mistakes you have made (my Mediclaim is insufficient. I wrongly calculated the cost of medical treatment). A discussion like the ones above shall open the communication channel without causing too much discomfort and shall strengthen the relationship. If you are able to help your friend, then you are truly a “a friend in need is a friend indeed”


By Sameer Rastogi

18 years of experience, PG in Finance and has delivered Wealth Management lectures at IIM Lucknow, IBS Gurgaon and IIPM Delhi. Contributed to various newspapers. Strength – Application of Economic fundamentals to Investment

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