It’s time to have the money talk

This paid piece is sponsored by The First National Bank in Sioux Falls.

By Adam Cox, chief wealth management officer

Have you had the money talk with your significant other, your kids, your family or your friends yet?

We’ve shared a lot about the importance of talking about money on our podcast, “Common Cents on the Prairie.”™ On the last episode, we got to hear from Heather and Amos Kittelson about their first money talk and how that conversation helped set them up to achieve financial freedom.

For the latest episode of “Common Cents on the Prairie,” we met with Kathleen Burns Kingsbury, a wealth psychology expert and author of “Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly About Finances and Live a Richer Life,” to discuss opening the lines of communication around money.

Here are some of the topics we covered:

• The importance of talking about money.
• Staying involved in your money relationship.
• Money and marriage.
• Money values vs. money history.
• Breaking money silence.

You can read a recap of our conversation below, watch the entire episode or find “Common Cents on the Prairie” wherever you stream your podcasts.

How important is it that we talk about money?

If we don’t communicate openly about money, we tend to make up stories about how we’re not doing it right or how we’ve messed up. It also can lead us to feel shameful about our relationship with money.

But if we are honest about money and begin to have those open conversations, we can start to learn from each other. We will feel less shameful about our mistakes, and we can take the opportunity to learn from the mistakes others have made — or they can take the opportunity to learn from the mistakes we have made.

Obviously, there’s a rational side to money, but we can’t underestimate how important the emotional side of finance is. Talking about it with other people can teach us to be more compassionate to ourselves so we can improve our relationship with money.

How involved should you be in your money relationship?

If you’re in a relationship, you might think that you can delegate all financial responsibility to your significant other and wash your hands of it. That way you don’t even have to worry about talking about money because they take care of everything, right?

Wrong. At some point in your life, your significant other may become disabled or pass away, or you might get a divorce, and you could end up in a messy spot if they handle most of your financial life. You don’t want to be a widow or divorcee grieving the loss of your relationship and having to learn about investments.

That’s another reason why it’s so important to talk about money. Go to meetings with your financial advisor, make sure you know where your assets are and what your debt is, and keep reading to learn how to improve your money relationship.

You don’t have to be in love with finance to understand your financial situation. Kingsbury compares it to nutrition: Every adult must figure out how to balance diet and exercise to maintain a healthy lifestyle, but we don’t all have to be nutritionists or gym rats.

The same thing goes for finance; we only need to know enough to be able to take care of ourselves financially and make sure we’re hiring the right people to guide us along the way.

Can talking about money bring couples closer together, and how does financial infidelity play a role?

Often, couples think that talking about money will lead to fighting, which couldn’t possibly bring them closer together — and maybe that’s why people often delegate financial responsibilities. But if you’re able to talk to your significant other about your relationship with money, your money history and your financial goals, you’re really just sharing another part of yourself. Heather and Amos Kittelson proved that when they told us about their positive money mindset and their “mandatory fun time.”

In fact, in the case of financial infidelity, not talking about money can be just as damaging and hurtful as an extramarital affair. Whether you have a hidden bank account, you’re investing in something you know your significant other wouldn’t approve of or you’re hiding spending, your partner might feel a sense of betrayal if they find out about it.

Financial infidelity typically happens not because someone wants to hurt their partner but because they feel ashamed or uncomfortable about a financial decision they either made in the past or are currently making. This topic has just surfaced in recent years in the world of wealth psychology, but it’s a problem that can and should be addressed among couples.

What’s the difference between money values and money history, and how do they affect our relationship with money?

Money values are just as they sound: our values as they relate to finance. When we identify our money values, we can financially honor them by spending, saving, gifting or investing our money in a way that aligns with what is most important to us.

Money history is separate from our money values, but it can influence them and has a major impact on our relationship with money. It’s a compilation of the influential experiences we had around money when we were young.

Thankfully, the financial services industry is beginning to understand the importance of money history to people’s current behaviors. Kingsbury said that until you start exploring and talking about your money history, your behaviors can be impacted by unconscious thoughts you have no idea how to change.

If you think you might be bogged down by your money history or you want to identify your money values, review the chart below:

How can you start to have the money talk with others?

First of all, you should congratulate yourself on wanting to talk more openly about money. Then, you should set some ground rules. Kingsbury calls these her money talk guidelines:

• Talk in “I” statements. Instead of saying, “You did this around money,” say, “When I witnessed this behavior, I felt …”
• Be curious. It’s not about proving that you’re right and others are wrong — it’s about trying to understand and learn from each other.
• Take turns sharing and take turns listening. A safe place to start is asking, “What is one financial success you’ve had that made you feel good?”
• Get to know each other’s money history. When having the money talk, you shouldn’t necessarily start with the dollars and cents. You need to understand the other person’s relationship with money to understand their financial situation.

With guidelines in place, you can finally stop talking about talking about money and actually do it.

If reading this inspired you to talk about or improve your relationship with money, reach out. We’d love to talk about money with you!

Any comments, insights or strategies discussed in this article are intended to be general in nature and, therefore, may not be suitable for you and your situation, whatever that may be. Before acting on anything written here, please consult with your attorney, CPA and/or your financial advisor.