Communication is a vital part of all relationships, and yet money can often be a taboo subject.
The Money and Pension Service suggests that as many as 47 million Brits find it hard to talk about their finances, and yet money remains the biggest cause of arguments within couples.
It might not be the most sophisticated form of communication – nor the most appropriate for discussing important financial matters – but texting turns 30 later this year.
Interestingly, a recent Royal London report has found that it is the post-text generation, those 18 to 24 years old today, who are most willing to talk openly about money.
Keep reading for a look at the lessons this generation can teach us about the importance of communication.
1. Talking can help to instil good savings and spending habits
Royal London’s report found that 75% of 18- to 24-year-olds spoke about money with their parents as they were growing up. This figure dropped within lower-income households.
In comparison, just 43% of those over 65 responded by saying they talked about money in their early lives.
Talking is how we communicate our past experiences and life lessons. Discussing money is no exception.
From opening a bank account for your child to teaching them about debt management, the basics of investment, or the role of pensions, these lessons are vital.
Children and grandchildren pick up a lot of their subconscious attitudes to money – including some of their emotional biases – at a young age. Pass on your good habits as early as possible, talking about the reasons behind your decisions, and your loved ones stand a good chance of developing a positive relationship with money.
This positive relationship appears to be in place for those aged 18 to 24 now, so if you didn’t discuss money with your parents growing up, be sure not to repeat the mistake with your grandchildren.
2. Talking about money can help prevent arguments within couples
If your attitudes to money were formed in a household where the subject was taboo, opening up now might not be easy. And yet, it could have huge benefits, both financially and in terms of your mental wellbeing.
Royal London confirms that nearly two-thirds (62%) of UK couples have argued about money. The most common cause of these arguments is a partner deemed to have spent too much.
Talking openly and honestly about the state of your finances and your attitudes to money might help to head off these arguments. You’ll also find communication is key if you or a loved one gets into financial difficulty.
Trying to hide debt, or manage it alone, could have massive repercussions for mental health. Share a problem, though, and you might find ways to work through a solution that you couldn’t have thought of alone.
3. Communication is especially important in estate planning
Those aged 18 to 24 are at the start of their financial journey, but frank conversations are arguably even more important later in life.
Last year, you might have read 5 reasons why it’s vital you discuss your estate planning, in which we looked at just this issue.
Not only will talking about your wishes help you to formulate your plans, but it will also help you to better understand your tax liabilities and work through any sticking points with family members.
A recent article in the Telegraph confirmed that the number of disputed wills is on the rise, with Which? reporting a 111% increase in disputes during the Covid pandemic.
Your will is vital for making your wishes known, but you’ll need to consider whether those wishes might lead to conflict. A recent MoneyAge article, for example, confirms that nearly half (43%) of UK adults don’t plan to split their wealth evenly between their children.
If you plan to leave an uneven split, discussing your wishes could be important. It will give all those affected the chance to air their views and to hear yours, hopefully lowering the chance of a dispute once you are gone.
Get in touch
While the rapid rise of smartphones and social media can feel stratospheric, the humble text message celebrates its 30th birthday later this year. The language of texting can sometimes seem impenetrable, and yet it is the younger, tech-savvy generations who are leading the way in financial literacy and communication.
Often thought of as a taboo subject among older generations, talking about money matters is key.
If you’d like to discuss any aspect of your long-term financial or retirement plans, please get in touch and find out how our team of expert planners can help.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.