Laura and Kate know first-hand that having money conversations with people in your life about money is tough. Our financial lives never exist in a vacuum – they’re closely linked to other people, like partners, parents, dependents, employers, and advisors.
Talking about money with these stakeholders can be very uncomfortable, so uncomfortable that we sometimes push off those money conversations for years. However, addressing them can be the key to a healthier financial future.
Richer Life Lab show quote
“I learned that a long walk and calm conversation are an incredible combination if you want to build a bridge.” – Seth Godin
Money Conversations You Should Have
Here are 5 often-overlooked money conversations that you should have soon. They’ll help you get your financial house in order.
Conversation #1: Talk about your financial future with your partner or spouse
If you have a life partner or spouse you need to be working as a team to accomplish your financial goals:
- Make a date to discuss how you envision your future unfolding. Bethany & Scott Palmer offer great tips to do this in First Comes Love, Then Comes Money: A Couples Guide to Financial Communication.
- Talk about where you want to live in retirement and when you might want to make a career change.
- Figure out if you’re on pace financially. The AARP Retirement Calculator is an excellent tool for providing you an estimate on how much you need to save based on typical assumptions.
- Schedule a standing “money date” to discuss key issues like your household spending plan, retirement savings, and debt balances.
Conversation #2: Talk about compensation with your employer
If you just work hard and wait to be recognized or promoted, you might be waiting a long time. The best approach to getting a salary raise is to track your successes and show them off when the time is right:
- Take on important and highly visible projects and then asking for a pay increase once you’ve accomplish them successfully.
- Check out salaries for your position and location at sites like glassdoor.com and vault.com to know how much more compensation to ask for. payscale.com and salary.com will give you the average income for your job in a particular location.
- Even if you’re satisfied with your current salary, ask for an increase anyway after you have a significant accomplishment. If the answer’s “no”, use the opportunity to review your career goals with your manager and highlight the value you bring to the company.
Conversation #3: Talk to and about your beneficiaries
For just about every financial account you have, such as a bank savings, retirement account, regular investing account, and life insurance policy, you should have one or more named beneficiaries who would inherit the accounts or funds if you die:
- If you haven’t designated beneficiaries or don’t remember who you named, this is the time to review it.
- If you have children, choose a guardian and spell out your wishes in a last will if you have not done this already. Also, purchase a life insurance policy if others depend on your income.
- If you’re married, make sure your spouse is named in your last will or basic emergency documents so that this person can make important decisions for you if something bad happens.
Conversation #4: Talk to your parents
According to the Pew Research Center, 28 percent of adult children in the U.S. and 18 percent of German adults give financial help to parents over the age of 65. Many are skeptical that they’ll be enough money in public pension systems to support them in retirement, especially as so many people today live well beyond their 80s.
Having a money conversation with your parents about their financial situation is critical:
- First talk check in with your siblings to learn what they know about your parents’ financial status. Ideally, approach your parents together.
- If this is a tricky topic in your family, gently bring it up by commenting on general money topics like everyday spending. Be persistent—it might even take several attempts to get them to be open about their finances.
Conversation #5: Talk to your service providers
There’s no need to pay more than you have to for services like insurance, internet, or your gym membership:
- At least once a year research competitive rates to lower your bills.
- Free up more money to put toward your goals, like retirement, buying a home, or getting rid of high-interest debt.
Richer Life Lab Podcast practical
This week’s Richer Life Lab practical is to choose one or more of these money conversations and try it. Then give us your feedback. Did your money conversation go well, give you peace of mind or save you money? Or did it backfire?
We want to hear about what’s working for you! Let us know if you try out one of the strategies we suggested in the show or have other recommendations that we can share with listeners in a future show.
Send us a Lab Report to firstname.lastname@example.org or record a voice message on this page. You can delete and re-record your message if you need to.
A big thanks to our Richer Life Lab sponsor
Wealthminder — 70% of Americans are not on-track to meet their long-term financial goals. Don’t be one of them. Wealthminder makes it easy to connect with qualified financial advisors to get the guidance you need. Submit a request to find the right planning professional online. It’s simple and free. Visit wealthminder.com to get started.
Please stay in touch
We’d love to hear your feedback, questions and stories related to our podcast topics. We’d also welcome your ideas for new topics. Here’s how to reach us: