When it comes to sharing money information, where do I start?

Transcript:

Hey, humans! I’m Michael Liersch. This is the About Money podcast, presented by Wells Fargo. I’m a behavioral scientist, with a PhD in cognitive psychology who loves openly discussing money to help humans better understand their money behaviors. By understanding our money behaviors, we all have the opportunity to make better money decisions.

In this season, we’re going to talk about how we can all sync up our life and our money. We call it LifeSync^®. You might be asking yourself, why does LifeSync matter? Well, when we align what we want to accomplish in life with our money, it can clarify whether money is truly working hard for us to get us to where we want to go. But that requires us to be intentional about what we want in our life, the jobs we want money to do for us, and compare it with how our money’s organized both now and in the future. To that end, we’re going to keep each episode under 10 minutes, so that you can take immediate action to LifeSync. So let’s get into it.

In this episode, we’re going to answer the question: When it comes to sharing money information with others, where do I start? We recently did a study with humans under 40 and asked them what was on their minds when it came to their parents’ money. So 86% said that the most important thing wasn’t that they would inherit their parents’ money, it was that they would inherit their parents’ values. And why that was interesting is at the same time, nearly half of these young adults said that they rarely or never discussed their parents’ values around their money and their family, and the role it played in all of their lives. I thought that was a really important thing to highlight because what we see is that people really want to understand the values around the money, that’s what people want to share, but those conversations aren’t necessarily happening.

And you have to ask yourself, why do people want that information? It’s because money isn’t just the dollars and cents. It was earned, stored, you know, created by certain people in a certain way and translating that into the purpose for having stored that money, saved that money, invested that money, to give to someone else, the recipient really wants to know that information. So if we extrapolate that to just broader money conversations, especially in families, when people share information with others about money, oftentimes they get talking about the balance sheet. You know, how much do I have, what accounts are things in? Of course that’s important information, but it’s not necessarily the starting point.

So, I want you to think about that in your life, in your family’s life, you know, with a spouse or a partner, with your children, if you have them. With parents. Whatever your family situation is, you know, when you think about starting the money conversation, I want you to start with what you’re trying to accomplish with money. Share those ideas. Is it about having enough for the rest of your life? Is it about making sure that if you have a health issue that you can sustain your lifestyle, your family’s lifestyle, take care of others that depend on you? You know, what is it that you’re trying to accomplish with your money, especially your shared values around money? What’s your family’s perspective on that? And do give everyone the opportunity to provide a point of view, because you might be surprised how really common those points of view are, and that can be really empowering. And also, less disruptive than just jumping into the money itself.

So, with that in mind, where I would recommend not starting is with the amount of money you have — where it is, what you plan to give to others. And the reason why, the real reason why, is that context is really critical when you share money information and your, you know, balance sheet with others. And there’s this idea, especially in the circles that really study behaviors around money, called the right amount of information at the right time. So when you talk about the dollars and cents in the balance sheet, you want to be sure that you are preparing the people who will be on the receiving end of that information for what you’re about to tell them.

So let me give you two quick examples. So let’s say you are a parent and you’re sharing information about how much you make with your child. You can imagine that if you make even, let’s call it, 100 dollars a week, for a five-year-old child, that may seem like a lot of money, even if you feel like it’s not. And so really thinking about the contextual way in which that information will be received based on their experiences, who they are, what life means to them, where they see money being spent, it’s really critical because it can be completely taken out of context and really be disruptive if you haven’t prepared that human being for that information. So when you’re thinking of a five-year-old, perhaps sharing how much you make is not the most productive starting point, but sharing what money means to you and your family could be a better starting point.

On the other side of that, I want you to think of, you know, as a parent, let’s say you’re concerned you won’t have enough to take care of yourself in your later years. You know, withholding that information from a child may also be disruptive in a different kind of way. And so, really thinking about these types of conversations that you can have, the right amount of information at the right time, is critical. And so, it can be too early to share the dollars and cents, and it can be too late. So, starting with your values, getting used to those conversations about what money means, you know, what your number one jobs are that you want to get done with money as a family unit, they can open the door to have those more specific money conversations exactly when you need to have them.

So, with that in mind, I’d like to give you a very tactical, tangible method to starting the conversation around what you want to accomplish as a family, at least thematically, around your money. So it’s a five-step process. So the first step is really to preplan the meeting by setting aside specific time with the human beings that you’d like to be involved. And so that could not just be a family member or family members, it could be a professional advisor. Just set aside that specific time and let those humans know that you’d like to discuss, what you’d like to accomplish with your money, with the family’s money in that dialogue. The second thing is really to prepare what you’re going to say and why you’re going to say it. The preparation is key. You want the conversation to be empowering, inspiring, encouraging of other voices in the room to share their points of view as well. The third thing I would really do before getting into this type of discussion is to be open to the other human beings that you’re bringing into this dialogue. Be open to their feedback and reactions. And I’ve done this with my own wife. We really actually very recently, think of it as a handful of months ago, talked very deliberately about our goals, what we were trying to accomplish with our money, how much money we thought we could bring to bear to actually get those things done. And we had some areas where we agreed and some areas where we disagreed, even on the amount of money itself. And so we were really open minded to our reactions and each other’s feelings around it so that we could get to the right place, and we’ve made a lot of fantastic progress toward our goals.

So the fourth piece that I would highlight here is to keep yourself and those in the meeting focused on a particular time frame. I probably wouldn’t let your initial conversation go beyond 60 minutes. And keep a focused agenda. And literally set aside time to have that open discussion, you know, think of it as questions and answers at the end of a dialogue so that you keep that time finite and it doesn’t swirl beyond the intended meeting time. Because oftentimes, that swirl can be distracting and perhaps send the conversation off track. So keep it focused. The fifth one is to document the conversation. Take notes. And make sure within that framework, you set up follow-up action items at the end of the meeting and when you’re going to come back together with a specific set of dates or options and times so that you can continue the dialogue. And then perhaps you can make talking about money, what it means to you, what you want to get done with it, with these human beings, a routine, a habit. And then you’re really off to the races.

That’s it for this episode of the About Money podcast. Please email us with the topics that you would like us to address at AboutMoney@wellsfargo.com. And if you really liked the episode, share it with family, friends, and anyone who listens to podcasts. About Money is produced by Wells Fargo. You can learn more about ways to work with us at wellsfargo.com/aboutmoney. I’m Michael Liersch, asking you to talk about money today.

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