Recently I was talking to a friend who wanted to buy a house. “How much is your mortgage monthly?” she asked. She was immediately embarrassed and stated, “Sorry you don’t have to answer that.” In another situation a family member asked me “What did you spend on your wedding,” and slid in directly after, “If you don’t mind me asking.”
Many of us have been taught not to talk about our finances in front of our friends and family. In a society where we share virtually everything, we are still uncomfortable talking about the Benjamin’s. As a result, you don’t share your salary with your colleagues. You don’t even share your net worth your spouse. You try not to ask your long term friends about their mortgage costs or wedding costs, even it helps put your budget in perspective.
Money is something we all want to be able to live the life we have always imagined. However, many of us are not comfortable discussing it openly and honestly. It has long been engraved in our minds that its impolite to talk about finances, so over time, many of us have been reluctant to ask for financial help when we need it.
Have you ever gotten in a fight with your significant other in which you were annoyed by something small they did but you avoided talking to them about it? But then another small thing happens, and another, and eventually these small occurrences build on top of each other until you blow up one day and let out a month of grievances.
This is the same thing that happens with your money when you avoid talking about your finances. You begin to make small financial mistakes weekly and eventually these small mistakes build up over time until one day you have an “Oh, no,” moment.
I have seen this moment unfortunately occur in all shapes and sizes. Young parents realize they need put their two children through college in five years but they haven’t started saving. Thus, the kids have to take out $200,000 in student loans. A 50-year-old couple wants to retire like the rest of their colleagues, but they have no retirement savings so they keep working through the best years of their life. Your elderly parents get sick and end up in a long-term care situation that they never properly prepared for. You as their child are now forced to take care of them while working full-time and raising your own children.
All these moments stem from the choices you make everyday not to talk about your finances. And because you are afraid to talk about your finances, you do not ask the pertinent questions that will help you progress financially.
So, what can we collectively start doing to inspire each other to open-up about our personal financial journeys?
Find A Finance Buddy
The world tomorrow is not going to magically feel better about talking about finance, but small conversations lead to larger ones eventually. By making time on a regular basis to discuss financial matters with a trust worthy friend, colleague, expert or family member, working toward your financial goals may seem more attainable. A lot of us have a workout buddy for the same reason; to help us stay motivated and feel more comfortable in gym classes.
Get Comfortable With Discomfort
The only way out is through. Avoiding things that make us uncomfortable will only exacerbate the feelings in the long run. Therefore, we need to face our money worries and concerns head on. How can you start to do this? Write down every fear and concern you may have about money. And think about why you may have that concern. You should examine if there is anything you can do about it. If you can, then take action and seek the counseling you need. If it is out of your control, then there is no use in worrying.
Take A Financial Class
Knowledge is power. Learn as much as possible about the financial topics that intimidate you. Overtime, these topics will become less scary and you feel more confident about your financial future. I recommend that everyone take a financial class. There are many free classes being offered at community colleges and online so there are no excuses as to why you can’t learn more about your own personal finances.
My Financial Journey
In hopes of inspiring others to be able to open up about their finances I have decided to share my personal wealth story so here it goes!
After college I was lucky enough to get a job right away working at a local corporation. While I was getting my feet off the ground, I lived at my parents house for seven months before I moved in with two friends. As soon as I was living on my own, my bank account went to a screeching halt, although, I was still able to contribute to my 401(k) monthly. I think this happens to many college grads as this is the first time you have real money so you tend to overspend.
Eventually I got my budget under control and soon after, I met my person. For the first time I did not have to just think about my financial health but someone else’s. Soon the wedding bells rang which brought upon new unique challenges and tough decisions.
One of our goals after the wedding was to buy a home. The quickest way to accomplish this goal was for us to live at my parent’s house until we were able to save the 20% down payment. Although this is not how we pictured starting our married lives, we were fortunate to have this opportunity. In result, within six months we had enough money saved for the down payment and extra cash reserves for anything that would come up once we moved in.
Writing the check the day we moved into our new home was one of the scariest moments for me. We had been diligent about saving and sacrificed many things to get to this point. However, I knew we were making a smart decision about the house we were purchasing in that when had already worked out our budget before buying the home.
After getting settled in the house, our cash flow steadily but surely began to rise which validated our new home expenses were in budget. Once rebuilding our emergency fund to six months of expenses, we started really focusing on savings again. We ran our financial plan to determine what our savings rate needed to be in order to retire by age 60.
Once we knew how much we needed to save on a monthly basis, my husband adjusted his contributions into his Simple IRA and I opened a SEP IRA in which I set up automatic payments. It is nice knowing that we hit our savings goal each month before we even begin to start paying expenses.
Additionally, we made sure we were covered from an insurance perspective. We both have a health, auto and life insurance policy. Our home is insured and we even have an umbrella policy to cover us beyond our auto and home insurance if anything significant were to happen. The last on my to-do list is to purchase a disability policy in the next year since I am self-employed.
The thing to keep in mind is we didn’t get to the position we are now overnight. There were consistent steps we took to realize our dreams. Some places along the way we had to sacrifice certain things and have the “hard financial conversations” to be able to accomplish our bigger picture goals. Small steps forward are still forward and this is my small step toward hopefully inspiring just one person to be able to open up about their personal financial situation.
Marissa Greco is a registered representatives of Lincoln Financial Advisors.
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