How to talk to your family about money

Talking about money isn’t always the simplest of things and it only becomes harder when we have to talk about it with someone we care about. Asking your grandmother whether she included you in her will, asking your father to buy himself life insurance, asking your sister whether she would mind selling her share of the house – these conversations can be vital and yet we are all too often afraid to have them.

It is extremely hard to remain fully in control, given the strength of the emotions involved. Our relationships have way too many pitfalls and misunderstandings – all of which can frustrate a constructive dialogue. We don’t get to choose our family – and yet the most important financial considerations in our lives tend to be inextricably connected.

Negotiations with the people we care about are always the most difficult ones, as not only is the outcome of the discussion at stake, but the future of the relationship too. In spite of their gravity, no one ever teaches us how to go about them. Usually, the best that people can do is to act on a whim – and hope they don’t come out worse than before.

Start a conversation

First off, don’t simply avoid talking about the problem – it will still affect your relationship, you will still worry, but you will certainly not get the desired outcome – which you could, if you discussed it. You might silently sacrifice your interests for the benefit of your loved ones – but they might not even realise that it is a sacrifice until you tell them. You will not see the gratitude you think you deserve, and this is very likely to result in tension between you.

The first step is always starting the conversation – and don’t be afraid – the words that need speaking cannot be worse than the problem you are trying to solve. Start with something like – “I am worried about the sale of the house. Can we talk about it?”

Keep calm

Of course, the conversation will be tense at first – since money, jostling for first place on the awkward list with sex and the kids’ education, is one of the most difficult things to discuss as a family. Remember that emotional conversations will only result in argument, not sensible decisions – so as soon as you notice that emotion is taking over and your right mind is leaving the building – take a pause, cool things down, and return to the dialogue as soon as the red mist has disappeared.

When trying to de-escalate a situation, the best thing to do is to talk your opponent through what they feel. First, they will be shocked that you’ve stopped arguing with them, but this will diminish once they see that you understand their point of view, and from this point you’ll have a chance to understand each other better.

Be honest

Remember, you are talking to your family – and while you might not be a professional negotiator, your loved ones will forgive you if they see that you are doing your best to preserve the relationship.

Every family has its own taboo subject – everyone knows that it’s there but avoids speaking about it at all costs. For example, you might know that your parents don’t really approve of your decision to marry – and hence, even though they said that they would help you financially (e.g., with the deposit on your house), your life decision might just be clouding theirs or they might simply not be in the position to help you that they thought they were.

Excuses only postpone taking a decision – and when it comes to money, time is always of the essence.

It is therefore imperative that you talk about these taboos as openly as you can – ask if there’s a problem and if that is the case, you will have way more time to solve the it.

Keep the boundaries

You might be trying to convince your unemployed brother, who spends all his time partying, to pay out his share of the mortgage instalment. But remember that you are not there to give him a lecture on his life decisions – you are interested in making him pay for the mortgage. So instead of lambasting him for his inability to pay, try to help him come up with a way he will be able to afford his part.

Think about your partner’s interests

If you want to get something back, you will have to be the one who acts intelligently. Everyone thinks about their own interests first – so you must convince the other person that by helping you they will help themselves in the best way possible. Try to understand them and their motivation – that way your partner will stop thinking of you as a rival and begin to consider you as an ally.

If you learn these ground rules, you’ll learn that there’s no predator-prey game… just people who lack negotiating skills. The person who blindly pursues self-interest – loses. The person who doesn’t talk about the problem – loses. The only way to win is to not be afraid of the difficult conversations – and to consider and appreciate your opponent’s interests.

One thing you must keep in mind – not every situation can be negotiated. Sometimes your relatives will be the ones who act dishonestly – and not necessarily out of spite or greed – they might think they are restoring justice, teaching you a lesson or protecting the weaker one. If your relatives are trying to cheat you, they will find a way do it – and in times like those you’ll need the help of a financial adviser and a lawyer.

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