How To Make Difficult Money Conversations Easier
How do you start a potentially emotional money conversation with your loved one(s)? What if they don’t want to talk about it with you? How can you be better prepared and less anxious about it?
WHO should you be having these conversations with? Parents (often elderly but not exclusively), adults or younger children, your spouse/partner, maybe even your professional advisors, and/or your employers/employees. Difficult conversations can sometimes happen with your cell phone provider! It’s not just with family or friends.
WHY have a difficult conversation? It’s the starting point of offering assistance and support to your loved ones, as well as to obtain reassurance and peace of mind for yourself and others. It helps your loved ones develop trust, comfort and confidence and to maximize their independence, safety, control and choices. The goal of the conversation is to seek solutions to optimize strengths and compensate for weaknesses, to honour and respect their wishes, goals, priorities and values. And maybe, most importantly, to minimize or prevent as much future unpleasantness and chaos as possible. Often this is the beginning of changing roles and family dynamics.
WHEN should you have these conversations? The sooner, the better. Do it now, well in advance of a possible crisis. Find a mutually agreeable time with lots of advance notice and set a time limit so it’s not a never-ending and tiring discussion. But also watch for daily opportunities to discuss anytime. Allow everyone time to prepare and practice what needs to be discussed. Choose a relaxed and unstressed time and compensate timing for energy levels and health challenges (sight and hearing etc.). Realize this will be a process, not a one-and-done chat.
WHERE should these conversations happen? Preferably find a mutually convenient and non-emotional location. For example: if you are talking about selling the family cottage, don’t have a chat while at the cottage with all its memories and emotional ties. Find a spot with no distractions (noise, temperature) that can be private and comfortable.
HOW should this conversation go? Always use simple, non-emotional language and try to be clear and concise (instead of too general and broad). Stick to the topic and keep your eyes on the big picture of the conversation. Seek clarification and knowledge using open-ended questions and explore the other person’s answers with active listening. Show respect by asking for their feedback. Be conscious of their fearfulness and provide them with reassurance. Avoid embarrassment or judgement (no blame, no shame). Avoid a too-quick diagnosis, be open-minded and look for points of agreement. Maybe prepare by writing out your questions and which desired outcomes you want to see. Focus on the essentials to keep the discussion on track. Respect their privacy and try putting yourself in their shoes. Park your ego- this discussion is usually not about you. Ask them what their thoughts are and what they suggest as a solution.
If it’s a family-oriented discussion, have one sibling be the “spokesperson” and keep other sibs in the loop.
Always Seek Professional Advice As Needed
TIP: Try to mutually agree and acknowledge the inevitability of the need for and the wisdom of transferring decision-making and management of the day-to-day responsibilities. Discuss and establish ground rules on the potential circumstances or triggers that will affect the change of responsibility for key financial functions.
Conversations Starters
Elderly parents: “I just got my legal affairs (Will, Power of Attorney agreements) in place, and I’m wondering if you have done the same? It might be helpful for me to know how to contact your executor/power of attorneys if the need arises.”
“I care about you, so I want to ask about….”
“To help you, maybe I can order your groceries online.”
“Does your bank know who to contact if they can’t reach you?”
“To help you stay longer in your home, have you considered a cleaning service? I use one, and it’s super helpful.”
“Your new phone has caller ID, so you will know who is calling” (insert conversation about scammers).
“Let’s plan together how to make sure you can get to church, shopping, etc.”.
“Have you considered what will happen with the cottage when you are gone? Can we discuss what each family member feels about it?”
“Remember the challenges you had when Grandma/Grandpa fell ill quickly and needed to move into care? Do you have plans?”
“My best friend’s parent just passed away, and my friend is super stressed because they never discussed the funeral arrangements or even where the important papers are. I just wondered if you could share with me what your plans are or if you already have something in place. I would feel much better knowing that your wishes will be respected.”
“Could you introduce me to your financial advisor (or other professionals)? I don’t need to know anything about your specifics, but it would be helpful to you if they knew who I am for the future.“
Spouse/Partner
Retirement: “I’m not sure we can afford to retire when we want. Let’s get back on track.”
Overspending: “I would sleep better knowing our finances are in order. Can we find a time to sit down and discuss?”
Kids
Education costs: “Let’s talk about the various ways to pay for college or university.”
Affordability: “We can look at the costs together and discuss where the money could come from.”
A money conversation (difficult or not) is important so you and your family can be prepared when future decision points arise. It’s an ongoing discussion that will be adapted as you go forward. Be patient and kind, and the results will be worth it for everyone.
Janet Gray, B.A., B. Admin., CFP®, CHS, EPC, CPCA, is an advice only Certified Financial Planner (CFP®) with Money Coaches Canada. She frequently appears in media and can be reached at janet@moneycoachescanada.ca.