Love & Money
This month at My Money Story we are taking a look at how money impacts the different relationships we have in our lives. Read on below, for some our thoughts, tips, and resources. And don’t forget to join our free workshop next week where we’ll be talking more in-depth about navigating different relationships and money.
1. Children
There’s no wrong age to start talking about money, and parents/guardians can help children develop a healthy relationship with money by being open with the topic in age-appropriate ways.
The following government agencies provide tips and activities, such as coloring books, comics, and short video games to help parents/guardians.
Consider opening a 529 College Savings Account. Withdrawals from 529 plans are exempt from federal and state taxes if used for qualified educational expenses, and is treated favorably as an asset in college financial aid applications.
If it’s possible, and for worst-case scenarios, consider obtaining life insurance for yourself and listing your child as a beneficiary.
For parents of adult children- consider setting clear boundaries with yourself and your children on how much support you can provide them financially.
2. Friendships
Friendships are some of the most meaningful relationships we can build. However, when we don’t have clear boundaries or are afraid to speak up, these relationships can be tricky to navigate, especially when it comes to money.
When dining out with a group of friends, don’t be afraid to ask ahead of time how the bill will be taken care of. If you treat money as a natural part of the conversation, it’s less likely to become awkward when the check arrives.
Don’t be afraid to turn down a social activity for fear of missing out; there will be many opportunities to build meaningful memories with friends. However, if you do really want to attend these activities, make sure to build the expenditure into your budget.
If you are working to pay down debt, or saving to buy a car, share the goal with your friends. They can help you keep accountable and cheer you on as you reach your goal milestones.
Be okay saying no. It’s okay if you cannot or are uncomfortable lending a friend money. There are other ways you can provide support.
3. Parents
It may feel awkward to talk to your parents about their finances, but it is often necessary, as parents may need financial assistance when they are retired and/or need help managing their finances due to health reasons.
One simple way to help our parents is to keep them informed about potential scams and share tips on how they can protect their personal information and money.
If you have concerns that your parents are not paying their bills, ask gently if they would like support organizing paperwork. Increase your support incrementally as needed.
If your parents need financial support, check if they are eligible for all potential government benefits. There are many programs, such as SNAP, Medicaid, Housing Subsidies, etc. that can help reduce the financial burdens that older adults face.
4. Marriage/Long-term Relationships
It’s important to have good communication when it comes to money with your spouse/partner. You both should be able to speak openly and regularly about your joint expenses (including necessities and quality of life expenses), your financial goals (joint and individual), and your strategies to manage any joint debt.
If you are planning on getting married, consider a prenuptial agreement. Some folks might hesitate to arrange a prenup, but it is a safety measure for both parties in case anything happens.
Consider creating and regularly updating (as needed) an estate plan, a living will, advance directives, a budget, a bill calendar, etc. At the very least, maintain a secure document with a list of important account and beneficiary information.
Consider meeting with an accountant or financial planner to evaluate the best tax filing strategy for your household.
5. Talk with Those you Love
Talk to your beneficiaries and those older than you (where possible) about money. We understand it can be tricky talking about finances with family or chosen family, but we’ve found that clear communication can help set expectations, create positive financial boundaries, and promote an overall good relationship with money. This can help continue the cycle of passing on wealth from one generation to multiple generations.
