Why money conversations are important for you and your loved ones

How often do you discuss your finances? In the UK, talking about money and our long-term financial plans are often still seen as a taboo subject. Breaking down this barrier could help you and those who are important to you make better money decisions.

Talk Money Week will take place between 8–12 November and aims to encourage people to talk more about finances. From discussing pensions in the workplace to saving goals with family, having an open conversation about money can be a positive thing. Despite this, Talk Money Week research found that 9 in 10 adults, the equivalent of 47 million people, don’t find it easy to talk about money, or don’t discuss it at all.

Talking about money can be difficult, but according to research, people who talk about money:

  • Make better and less risky financial decisions
  • Have stronger personal relationships
  • Help their children form good lifetime money habits
  • Feel less stressed or anxious and more in control.

It’s a step that can help improve your financial wellbeing and long-term resilience. It doesn’t just help you, either – it can support the financial security of the people around you too.

If money isn’t something you talk often about, it can be difficult to start conversations and get into the habit. Here are three reasons to start doing it now.

1. Take control of your finances and goals

Money-related stress is common. Research from CIPHR found that 79% of people feel stressed at least once a month, and money was the top cause of this. Some 39% of people said money was the thing they worried most about.

Talking about your concerns can help your worries seem more manageable. When you’re stressed, it can be difficult to make decisions and understand what your options are. Talking about it can help you create solutions and take control of your finances.

You shouldn’t just speak about concerns, either; talking about what money will allow you to do can help motivate you and keep you on track. For instance, talking about a savings account that will help you book a dream trip, or how increasing your pension contributions will mean you can retire early, are just as important as sharing the things you worry about.

2. Make better financial decisions

Financial decisions can seem complex and, at times, it can be difficult to understand what your options are. In other cases, you may take certain steps simply because that’s what you’ve done in the past, even if it’s not right for you now.

Perhaps you save into a savings account with your current account provider because that’s what you’ve always done. But a conversation with a colleague could highlight that there’s an alternative account that’s offering a higher interest rate to help your money go further. Or a conversation may mean you start to consider investing some of your savings rather than holding cash.

Talking about money can help you look at your finances from a different perspective and mean you make better decisions.

3. Pass on your financial knowledge

Over the years, you’ll have picked up your own body of financial knowledge. By making it part of everyday conversation, you can help people around you make better financial decisions too. Perhaps you could highlight why paying into a pension early makes sense to younger generations, or have some tips for starting an investment portfolio.

It can also help you foster a relationship where loved ones feel comfortable coming to you to ask for advice or share their concerns. It can mean they’re less likely to bury their head in the sand if they’re struggling or to miss opportunities.

Having open conversations about money and how it can help you achieve goals can help loved ones make better decisions.

When should you talk to a financial planner?

Talking to loved ones about your finances can be beneficial. However, there are times when working with a financial planner can help you get the most out of your assets. A professional can help you understand the complexities of things like tax allowances, as well as how the decisions you make now will affect your goals.

By working with a financial planner, you know you can have confidence in your plan. It can be useful at any point in your life, including milestones like retiring, and is a step that can ensure you remain on the right track long term. If you’d like to arrange a meeting, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.