Why does talking about money make so many people so uncomfortable? It’s something I think about often. Ask a behavioural psychologist and they will tell you that the way people think about money is just a short-hand for the way they think about happiness, power and self-worth. But the relationship that most people have with money is often incredibly complex. It’s a subject that stirs up such a wide range of emotions, it’s no wonder so many people try to avoid it at all costs.
Where did we learn to be embarrassed by money?
Not talking about money used to be seen as a privilege of the wealthy. It’s the reason why expensive shops or restaurants leave prices off their tags or menus. If you had to ask the cost of something, then you probably couldn’t afford it. And it’s definitely a strong part of the British psyche to feel that talking about money is tactless or vulgar. But I think that the reluctance to talk about money has spread across all corners of society. You don’t have to be rich or poor to find it a difficult topic to bring up.
The money taboo
First, it’s a generational problem. Most of us inherit the way we think about money from our parents. So, if you come from a family background where money wasn’t a topic of conversation, the chances are that you’ll repeat the pattern with your own kids.
Second, most of the UK population doesn’t understand money, so they find it a difficult subject to discuss with pretty much anyone. They don’t want to reveal their ignorance, and they would rather ignore the subject completely or delegate the task of worrying about it to someone else instead.
And third, people don’t like to talk about money with their friends or colleagues, for fear that comparisons will embarrass someone in the conversation. This awkwardness applies just as much to those people who feel they have more money than those who feel they have less. None of us likes to feel judged or mocked.
Out of these three, the first and second are most closely interconnected and are likely to lead to people suffering serious financial losses, rather than just simply losing face.
The need for families to discuss legacy planning
In many instances, choosing to stay silent about money can cause significant problems between parents and their children, particularly when it comes to financial planning and inherited wealth.
This became apparent in a recent survey we conducted. We asked 1,000 retirees aged 60-plus, and 1,000 adults over the age of 30 (and with at least one parent in retirement) to share their attitudes to discussing money with their family. Some of the findings were revealing.
For example, of those people already in retirement, 44% said they still haven’t had a discussion with their children – either about their will or the inheritance they planned to leave for them. Of this number, 45% said they just hadn’t gotten round to it yet, with 19% admitting they simply don’t like talking about death.
But procrastination wasn’t the only issue that our survey revealed. Almost a quarter of the people in retirement that we spoke to said they had no intention of talking to their children about what they might inherit, while one in five people said they had made a conscious decision not to discuss their will with their beneficiaries.
So why is it so difficult to talk about inheritance?
Perhaps these retirees feel embarrassed or ashamed that they were not leaving behind enough of a legacy for their children. Or maybe they worry that talking about money will allow other people’s greed to take over. Either way, failing to talk about these issues with loved ones suggests a painful lack of trust or intimacy.
For the parent, it’s a conversation that will centre on death, legacy and money. These three topics are all such emotional minefields, it’s easy to see why the simplest solution for most people – parents and children – would prefer to postpone this conversation indefinitely – even if failing to talk about it can have such negative consequences.
And what about the children of these retirees? Well, perhaps as you’d expect, they are even less in the know about what the future holds for them. Almost half (48%) said they didn’t know what they stood to inherit from their parent or parents, while 44% don’t know where their parents’ assets are kept. And of the 41% who told us they hadn’t had a conversation with their parents about their wills, a worrying 85% admitted they had not tried to start a conversation.
Would more open and honest conversations – sooner, rather than later – help more people in these situations to connect with one another? I would like to think so.
Silence is never the solution
If you think that changing people’s behaviour is impossible, you’re wrong. Just a few years ago, it was taboo to talk about mental health in the workplace. There was a huge stigma attached, and people suffered in silence.
But this is changing. Companies like Octopus have a much greater understanding of mental health issues in the workplace, and we’re working hard to make sure that Octopus is an environment where no topics of conversation are off limits or deemed too awkward.
This only happened because people started to have more honest conversations where they didn’t feel afraid to admit their weaknesses, and other people felt in a safe environment to do the same. And once you start talking about these previously taboo subjects, you learn a lot. And you gain tremendous sympathy and respect for the people who are sharing their thoughts and feelings with you.
How can we encourage people to break the cycle?
If you want to change the way you think about money, here are a few things to bear in mind. First, whatever your personal issues or hang-ups about money, you’re certainly not on your own. If more people were having conversations, more people would start to realise that they weren’t quite so alone.
There’s no shame in admitting you don’t know something, and the quality of your life can improve dramatically when you feel you can ask for help.
Second, talking to a financial adviser is always a good starting point. It’s enormously important that people get advice. And it should never be understated that financial advisers care massively about their clients. Clients of financial advisers know what that when they talk to a financial adviser, they can expect to get three things: honesty, expertise, and care.
Financial advisers are also very adept at asking the difficult questions that can help to kick-start conversations that lead to positive changes. In that respect, I think the closest comparison is with financial advisers and doctors.
A good GP will do more for you than just write you a prescription and send you home. They’ll ask you about your life, encourage good behaviour and remind you about the bad habits you need to break. That’s the point where your GP moves beyond being a general practitioner and is now thought of as “the family doctor”. Trust is everything.
Why shouldn’t people experience a similar type of relationship with their financial adviser? I want to see a future where financial planning is considered a family discussion, and where the financial adviser is considered as almost an extension of the family unit, able to act as the glue that helps generations bond together.
Because no matter how difficult a conversation, it’s rarely as scary as you imagine.