How to talk about money

Oli West

by , Senior copywriter

at PensionBee

20 Feb 2021 /  

Couple drinking coffee and talking about money

It’s been a tough year for many, and millions of people’s finances have been affected as a result of the Covid pandemic. And while money worries can range drastically - from having to tighten the budget a little to finding yourself unemployed and unable to pay essential bills - one thing applies to all of us: talking about money is crucial to avoiding further problems.

From understanding why talking about money is important, to learning how to talk about money in a relationship, we have you covered.

Why we need to talk about money

In 2015 University College London surveyed 15,000 men and women. They found that they were seven times more likely to tell a stranger intimate details about their sex life than discuss how much money they made.

While this is perhaps unsurprising for a nation once taught that it was impolite to talk about money, attitudes are slowly changing. For example, we now have Talk Money Week; an annual celebration of the work thousands of organisations are doing to improve money management across the UK. Its main goal is to get more people talking about money in all of its forms and there are lots of ways employers, charities, and individuals can get involved.

As a company that’s passionate about simplifying pensions and putting people back in control of their retirement savings, it’s our job to encourage people to talk about money. Here are just three of the reasons why we feel it’s so important.

To teach financial literacy for younger generations

It makes sense that the earlier a child is introduced to money, the better equipped they’ll be to manage it for themselves when they’re older. Earning money and knowing how to budget and save are key life skills that can be taught from an early age.

Whether that’s being transparent about family finances at home, encouraging children to complete small tasks to earn pocket money or getting them started with investing, there are lots of things you can do to help ensure money isn’t a source of stress in later life.

To improve our mental health

Money troubles have a habit of weighing on our minds, and it can lead to a great deal of anxiety. When things are tough, it can feel tempting to bury your head in the sand and avoid the subject altogether. But this doesn’t help. The problem doesn’t go away. And while the adage ‘out of sight, out of mind’ might apply to some situations, when it comes to money the opposite is likely to be the case.

On the other hand, addressing financial challenges head-on by talking about it with the right people can be an empowering and emotionally rewarding experience. Your first port of call might be a partner, family or a close friend. And even if those aren’t available to you, there are specialist organisations you can speak to confidentially and for free (see the end of this article for a list).

To make better financial decisions

The more accurate information you have, the better decisions you’re able to make. For example, someone who’s ashamed to share a poor credit score with a partner might lead to a joint mortgage application being rejected. But if they’d spoken about it sooner, they might have been able to take steps to improve it before looking to buy a home together.

There are many ways you’re able to make better decisions when you have all the information to hand. But it first requires you to be open and honest about your situation.

To narrow the pay and pensions gaps

For a long time we’ve known that women have been short-changed in the workplace, with gender inequality in pay going back generations. But it wasn’t until the government compelled public bodies and organisations with more than 250 employees to disclose staff salaries in April that we saw just how bad it was. Huge companies were named and shamed and they’ve been left with no choice but to take action. That’s what can happen when we start to talk about money publicly.

Where there’s a pay gap there’s also a pensions gap: if women are paid less at work, they’ll be paid less in retirement. The pensions gap steadily increases with age, with some data suggesting it’s as wide as 40%, in favour of men, by age 50.

To build a better future

No matter how far away retirement can seem, it’s never too early to start meaningfully contributing to your pension. The sooner you start saving, the more time your pension will have to grow, and the less you’ll need to save each month. Learning about things like compound interest can help you turn a small savings pot into a significant amount when it’s left untouched.

We’re passionate about making pensions transparent, fair and accessible to everyone which is why we’ve designed an easy-to-use online pension that enables you to monitor your pension balance, calculate your projected retirement income and set up contributions in just a few clicks.

How to talk about money

There’s no need to fear or avoid talking about money with your family or partner. But it helps to go into the conversation prepared and with a positive mindset. So if you’re wondering how to talk to your partner about money, consider the following before you sit down to have that chat.

Prepare for the conversation

Like a well-baked cake, a conversation is more likely to turn out well when you use the right ingredients. So what are the right ingredients?

Time The best time to talk about money probably isn’t going to be after work or while you’re getting ready for a Saturday night out. So choose wisely.

Don’t pick a moment when either of you are stressed, tired or in a rush. Rather, choose a moment when you both have some downtime, are feeling positive and have some energy. Saturday or Sunday after brunch could be a good option.

Make sure you give your family or partner enough notice, too. Not everyone will appreciate having a financial chat sprung on them!

Location While speaking openly about money with your family or partner is encouraged, you might not feel so comfortable talking about it in the presence of others. So consider having your chat in the privacy of your home, a secluded spot in a cafe or while you’re out for a walk.

If you don’t live together, you might also want to hold your conversation on ‘neutral territory’ - ie. not at one of your homes or local cafes. This can help put both your minds at ease, since it creates a neutral atmosphere that avoids any emotional power plays.

You’ll also want to make sure that you’re sitting at equal heights in similar chairs, so that it doesn’t feel like one person is being spoken down to or interrogated.

Talking points or goals Have you ever left a meeting - perhaps at school or at work - feeling like it was a complete waste of time? Often, poor meetings are the result of unclear agendas and poorly defined goals. No one’s sure exactly why they’re there or why they’re there.

For a finance chat to be successful, you both need to be clear on both of these things. So consider how you plan on introducing the discussion so that it’s clear enough to avoid any confusion.

If there are several things you want to talk about, consider splitting them up into several conversations. That way, the ‘agenda’ and goals of each discussion should be crystal clear and will also allow you more time to have a good conversation.

Start the conversation

Once you’re clear on what you want to get out of the conversation, and you have an idea of where and when the best time is to have it, it’s time to bring it up.

Bear in mind that everyone’s different. Some will be fine talking about money at the drop of a hat, while others might prefer some warning. Suddenly asking “What’s your credit score?” as you’re having dinner after work may not result in the calm and collected answer you were expecting. If you think the other person would appreciate a heads-up - and we dare say that many will - then consider introducing the idea of talking about money gently and agree a time to discuss it.

On the other hand, sometimes waiting for what may be perceived as a ‘big discussion’ can cause a great deal of tension and anxiety. So you may decide that just coming out and saying it is the best approach. That’s fine too, so long as you do it at the right time and location (as explained above).

It’s likely you’ll know the other person well, so use your judgment to decide the best way forward.

Take turns to speak

Talking about personal finances can be difficult and emotionally charged, particularly if one or both of you are experiencing money problems.

Giving each other plenty of uninterrupted time to speak helps give you both the necessary time to gather your thoughts and to form a reply - something that can be difficult when discussing a topic for the first time!

It also reduces any stress or tension, since neither of you will feel like you’re under pressure from the other. And it can create a more welcoming environment which invites you both to speak openly and honestly.

Be honest

While talking about money shouldn’t result in feelings of embarrassment or shame, it’s not uncommon to experience emotions. We live in a society that tends to focus on financial success rather than financial hardship, after all. So it can be difficult to open up and speak honestly about your situation if your finances aren’t in good shape. But speaking honestly about your finances is crucial, and it’s important for your family or partner to be honest too.

Being honest allows you to see the situation as it really is. It allows you to understand the future impacts of your situation. And it arms you with the necessary information to begin to address it and correct it.

When you’re preparing how to talk about money in marriage or at other stages in life, be sure not to skirt around the issue or lie about it. This could lead to further financial hardship and a breakdown of trust between you and your family or partner.

Be aware of emotions

Talking about new or difficult topics can be emotionally hard. All sorts of feelings may bubble up which could lead to conflict or turmoil if not dealt with in the appropriate manner. So how do you deal with emotions when talking about money?

First, remind yourselves why you’re having the conversation - what’s the goal you’re trying to achieve? This can act like a switch, helping the brain reset back to using logical processes rather than emotional ones.

Second, reaffirm that you both want to see a positive outcome from the conversation. You didn’t sit down to argue or get upset. Reminding yourselves that you’re on the same team may help you conquer any emotional hurdles together.

Lastly, try to show empathy towards each other. Acknowledge that talking about money isn’t easy for many people, and allow each other the chance to fully express themselves without fear of judgement or dismissal.

Agree any actions

Talking about money is a crucial first step towards effectively dealing with your finances, but you must agree to act on any decisions that are made.

Consider writing down any actions that you need to take before the conversation concludes. This might include:

  • Researching a particular question or topic
  • Calling a bank or loan provider
  • Downloading a credit report
  • Gathering relevant paperwork
  • Seeking help from a support organisation

How to talk to partner about money

Talking to your partner about money can be part of a healthy relationship. Discussing your finances regularly can help you deal with small problems before they grow into big ones. So try to find time to make it part of your routine, perhaps by agreeing to talk over brunch or a long walk every month.

If you do find yourself in a more urgent situation or in need of having a ‘bigger’ discussion, consider following the steps outlined above. The advantage of being in a relationship is that you’ll probably have a good understanding of one another, allowing you to avoid some of the emotional pitfalls that can get in the way of a productive discussion.

Where to go if you need help

Money can be a confusing and complex area at the best of times, and it can be particularly stressful if you’re experiencing financial difficulties. In those situations, sometimes talking about money isn’t enough and further guidance is needed.

If you’ve already had ‘the big chat’, of you’re just not sure how to talk to your spouse about money problems, there are plenty of organisations that provide free advice for those experiencing financial difficulties:

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