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Why is it difficult for people to talk about money?
People hate talking about money and most of the time never do. Yet, it’s a huge factor in decisions we make and how we relate to others – whether we admit that or not – and that means we can miss out on some great opportunities for conversations we would otherwise enjoy if we simply eased up on our anxiety about money. Discussing money is considered bad manners among many Americans, but there could be benefits to having more open and honest conversations when it comes to our finances.
5 benefits of money conversations
Here’s how talking about money can be good for your mental and financial health:
Discussing expenses can help you establish a budget
It helps to have a baseline understanding of what others spend on similar items. Having a community of like-minded individuals with whom you’re able to speak freely about expenses can be very helpful. Ask friends or neighbors what you can expect to spend on items like rent, groceries, or utilities to help set expectations for yourself. If someone doesn’t feel comfortable giving you the exact amount they spend, they can also speak of past experiences or share general information.
A budget helps you understand your spending. It allows you to be very specific about where you’re spending your money, and it allows you to prioritize what’s important to you. Here are some common budgeting mistakes to avoid:
- Not creating a budget. Starting a budget can feel overwhelming, but if you don’t start, you’ll never get anywhere. Once you know where your money is going, you can decide whether it’s acceptable or not.
- Not tracking your spending. It’s easy to simply assume that you’re spending within an acceptable range, but unless you track your spending, you won’t know for sure.
- Living life on credit. This tactic can get you into trouble, because if you owe more than some amount, credit gets harder to get.
- Using cash instead of credit cards. Cash is more like a debit card, and it’s much easier to get yourself into financial trouble if you don’t track it.
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Engage in conversations about careers and salaries can increase your income
If you want to move up in your career, you should build connections with colleagues and co-workers. Talking about money can sometimes lead to higher income. There are many forums for this purpose, including professional associations and social clubs. This will help give you a salary range to look for when job hunting. Rather than asking someone their exact salary, you should ask how they feel about their current salary. Ask questions about what an entry-level person may make compared to a senior-level position within a specific area of expertise.
This information should give you the overall range, which you can use to compare to your background. If you don’t feel comfortable having these conversations, use a website like Glassdoor to compare salaries across all industries.
Being open about money helps you teach your children about finances
One of the most effective ways for parents to teach their kids about finances is by opening up about money.
Money talks are an age-old practice, but the conversations today need to be more informal, informal, and personalized. As parents, we need to understand that our children are going to hear (and see) money talk from their peers, teachers, media and they want to know how we handled money growing up.
When parents respond, “When we were kids, we didn’t have credit cards! We saved every penny!”, they’re sending the wrong message. Kids need to know that their parents are not perfect and that they didn’t have money growing up. So when we suggest money talks, be kind, light, and informative. Even teens who have money issues are not bad, they’re just learning to manage their money.
It’s helpful to have a family budget, but, again, make it simple. If your teen has a job, discuss how much he or she has earned that week. If your teen wants to buy a car, consider discussing the cost, payment, and insurance.
Many parents think that talking about money with their kids is teaching kids to be greedy, but that’s not always the case. Kids need to learn that money isn’t everything and that it’s important to be responsible with their money. They also need to learn the power of earning, spending, and saving. Here are a few additional ways to help your kids understand the value of money:
- Implement chores in exchange for an allowance, so your kids learn the value of money. Explaining how you work hard to put food on the table is important.
- Start a piggy bank where they can put change, and then have them deposit it into the bank at the end of the year to watch their savings grow.
- Have your child choose a special toy they want, and help them save half the purchase price. You cover the rest.
- Use cash when shopping with children to help them better understand the exchange of money for a product and sneak in a math lesson too!
- Buy on sale. Teach children about value and saving money by teaching them to look for sales. Explain that buying things on sale allows them to save as well.
Learn savvy finance tips when you share yours with others
There’s no better feeling than knowing you got a good deal for something or bragging about that good deal to your friends. Learn from other people’s money-saving tips, and share your own best practices. Don’t be afraid to share best practices with your circle like purchasing in bulk, shopping private labels, or finding the best coupons. You can learn a lot of great financial tips from people by asking them what they do and how they do it. And the more you share with others, the more they’ll share with you. It’s a win-win for everyone!
Financial tips extend far beyond shopping. The MoneyLion app offers free daily financial tips to users on topics that include savings, banking, borrowing, and investing. Users are also able to earn cashback rewards for staying on top of their finances, which they can exchange for gift cards to their favorite stores.
Money discussions encourages smarter financial choices
Asking questions about money can make you a more savvy consumer, so you can get the most value for your money. Whether you’re planning to buy a home or looking to invest your money, ask your inner circle for recommendations. If you want a greater variety of opinions, read online reviews and join online communities. Reddit and BiggerPockets are great places to start.
Supportive platform to talk about money
When you join our MoneyLion Credit Builder Plus membership, you gain an online community. We share expert advice on how to improve your financial portfolio, help thematic investing, show you how to increase your credit score and so much more!
Not a member? A MoneyLion Credit Builder Plus membership gives you access to competitive loans, 0% APR cash advances, a managed investment account, and credit monitoring. Some of our members have increased their credit scores by an average of 60 points within 60 days after signing up for Credit Builder Plus. Learn more about Credit Builder Plus today in the MoneyLion app.