How to Have Difficult Money Conversations

If managing our money feels difficult, TALKING about money is even more difficult. Add in any underlying relationship dynamics (no matter what they are!), and you’re setting the scene for a really terrible conversation. Money conversations aren’t easy, but they’re necessary. It doesn’t matter if you’re talking with your spouse, business partner or your parents, getting on the same page about money is important. Today, I want to focus on how to have difficult money conversations. I promise, it’s possible to have those difficult conversations and come out on the other side even stronger, my friends.

Knowing you’re going into a difficult, possibly very emotional, conversation with someone close to you is never fun. But what IS fun is coming out of it with more clarity and more understanding and, if you really excelled, a PLAN for moving forward together. 

It’s important to recognize that you’re likely not going to climb this money mountain during your first sit-down. Learning how to have difficult money conversations takes continual, focused effort from both parties to build the attitudes, habits and understanding necessary to fully align. Don’t give up if your first foray doesn’t turn out quite like you wanted. Just like in sports, review the things you can do better, adjust and try again.  

Also, remember you’re not alone in this! I’m right here with you, learning alongside you and cheering for you. I fall down on the job just as much as anyone, but I believe we can learn these important skills together!

Difficult Conversations Aren’t Just About Money…

Amidst all the big, huge events happening now in our world, we’re surrounded by a cacophony of noise as news anchors, journalists, politicians and activists struggle for words and information to help us understand what’s happening. What’s being lost in all that noise is civil discourse and discussion in our own personal relationships. So, while this post is centered around how to have difficult money conversations, I’d wager some of these concepts could be applied to the conversations you’re having now with family, friends and your community about current events. 

More now than possibly ever, we’re caught flat-footed, learning how to have difficult conversations with our loved ones on the fly. We’re parsing through already-difficult topics made more difficult by misinformation, unreliable news sources and wild rumors swirling about. It’s a volatile scenario. 

Just as money is an emotional topic, politics and religion will always instigate strong personal feelings. These are the discussions that require a thoughtful approach. Using the information in this post, my wish is for you to have the confidence to handle difficult conversations with grace and kindness. No matter the topic.

Alright, now getting back to the topic at hand:

Why is Talking About Money Important?

It’s simple. A lack of communication about your finances can lead you toward arguments and disagreements without resolution. The tangible impacts could be spending more money than you have, underfunding your emergency or savings funds, missing important investing time, making poor investment choices or a complete lack of planning altogether.

The closer you get to a big life change or decision (kids, medical issues, retirement, business decisions, etc.), the weightier these conversations can feel. Similarly, the further away you get from your last money conversation, the more difficult it can be to initiate a money discussion. 

To circumvent these issues, create a routine where checking in on your finances is NORMAL. We’re taught talking about money is impolite, but it’s actually one of the more important things to talk about. Learning how to have difficult money conversations can make a lot of things easier in your relationship. Develop good communication skills when it comes to money, and you’ll be in it to win it, because those skills will pour over into other aspects of your relationship. 

Why is Talking About Money So Difficult?

Money is emotional, y’all. It is NOT just about the numbers. The way you manage your money is closely tied to your personal experiences and your value system. Let’s say it again for the people in the back: personal finance is personal.

As each of us grew up, we all learned certain money “scripts” – stories that were told to us, or by us about money. These scripts inform our belief system about money and impact our behavior. These beliefs are often unconscious thoughts, but they are the single most important factor in your financial journey.

Your money scripts might be negative thoughts. These create a scarcity mindset and limit our future success. Here are some examples:

• “There will never be enough money for me or my family.”
• “Rich people are greedy.”
• “If only I had money, I would be happy.”
• “I need to have money for people to respect me.”

In the more rarer cases, your money scripts might be positive. If this is you, congratulations! Keep up the good work. 

(I recommend this video by Brad Klontz if you’re interested in learning more about money scripts. Brad titled the phrase “money scripts” and continues to be at the forefront of research about how to improve our money mindset.)   

As we start learning how to have difficult money conversations with our spouses, partners, friends and family, it’s important to consider their personal experiences and resulting money scripts. What are the past experiences and beliefs that are directly impacting their actions now? 

Going into tough financial discussions with empathy and understanding is the real key, and evaluating your own money scripts and those of your conversation partner can be helpful.

Related post: Financial Red Flags in a Relationship

How to Have Difficult Money Conversations

Prior Preparation and Planning

Yep, we have pre-work, my friends! A warm-up is important to getting us in the right mindset for success. It’s just like CrossFit – don’t go into a difficult money conversation cold. (Annndd we’ve now reached the end of my CrossFit knowledge.) Here are the steps to follow before you embark:

Figure out what you want to get out of the conversation. What is your ultimate goal? If you were to define a successful conversation, what is the outcome? Make sure you’re tempering your expectations with a dose of rationality – you may not be able to completely rework your financial picture in the first conversation. Set incremental goals and start small.

Outline your mandatories or non-negotiables. Where are you drawing a hard line in the sand? For example, if it’s a budgeting conversation, are you willing to give up your weekly nail appointment? Can you learn to stop buying so many darn books? (oops, that one hits close to home) What are the negotiable items for you? You’re likely going to need to compromise, so it’s important to get your mind straight right now.

Anticipate how the other person will respond. Do you think they’re expecting what you’re going to say? If you anticipate them to be upset or angry, is there anything you can do to soften your approach? Or, if you know they’re going to react a certain way, how do you plan to respond?

Give yourself an attitude adjustment. Let’s do a quick check-in on your motivations. Make sure you’re going into this with the intention of productive discourse. This is no place to make a point or get your own way. It’s a collaboration that will require understanding and compromise.

How to Set It Up For Success

Most experts suggest scheduling time to sit down together. Make sure it’s during a day or time frame that isn’t chaotic – where you can fully focus on the other person without interruption. It’s ok to have impromptu conversations – and in many cases, those can be productive discussions! – but give yourself permission to take a time out if things get testy. 

Just like in a business negotiation, it can be a good idea for each person to write down the specific topics they want to cover, and their goals for the conversation. Each relationship is different, obviously, so think through what will make the initial conversation as successful as possible for your own relationship.

Let’s Go!

I watched a really powerful TED Talk recently (nerd alert). Megan Phelps Roper spoke about her upbringing in the Westboro Baptist Church and all the reasons she eventually left both her church and her family. She’s obviously had some pretty difficult conversations in her life, and shared a helpful framework for those discussions. I think her guidance is relevant and applicable as we learn how to have difficult money conversations. 

Don’t Assume Bad Intent.

At the end of the day, we’re all just doing the best we know how to do. If you believe your conversation partner has either good or neutral intent in their actions, it’s easier to open up to a productive discussion, and it’s easier to find common ground in compromise. 

Just as it’s important to acknowledge the other person’s internal money scripts to better understand their past experience and current perspective, it’s important to assume they have good intentions.

This trick can also be helpful to keep us from getting stuck in anger. Anger is often caused by misunderstanding or assumptions. Assume the best, and it’s easier to move past any strong negative emotions you have. 

You’re Responsible for Your Behavior and Words.

Listen, it’s not possible to control anyone else’s behavior, as much as you may want to. But what you can control is the way you act and the things you say. Be truthful, but be cognizant of the way your actions and words will be interpreted. 

The other responsibility you have in this conversation is to stay calm. Your energy represents 50% of the energy in this scenario. It can be tempting to dial up the volume or the snark, but you’re cruising for a bruising if you do. Increasing volume and/or snark can lead to explosive reactions from the other person – the exact thing we’re trying to avoid. 

Instead, take a breath, or better yet, take a break. There’s nothing wrong with calling for a short break to regroup. 

I recently stumbled on the concept of nonviolent communication. It’s an interesting communication platform built on empathetic listening and honest self-expression. The underlying concept is to help avoid irrational conflicts and misunderstandings that commonly arise when having difficult conversations or making difficult requests. 

In nonviolent communication, individuals are asked to set aside blame and judging and instead, use language conscientiously to work toward true understanding of the other’s perspectives. If you are interested in learning more, here are a few resources for you:

• The Center for Nonviolent Communication
• An easy video explanation of the concept

Ask Questions.

If you and your conversation partner are experiencing any disconnect, asking questions can help map the distance between your two points of view. Work to understand where they’re coming from and why their stance makes the most sense to them. This shows you’re listening and indicates willingness on your part to engage. 

For bonus points, acknowledge what they’re saying by summarizing it back to them. For example, “the things I heard you say were important to you are…” or “based on what you just said, I’m understanding these are your main points of concern…”

Make the Argument.

It’s easy to assume the value of your point of view should be immediately apparent to your partner (“Of course we should each get a weekly allowance!”). Even if it seems crystal clear to you, you cannot expect your partner to spontaneously change their position until they begin to see the merit in your idea. (“Having some fun money will allow us both the freedom we want, without arguing over how the money is being spent”)  

Be sure you come into the conversation informed and ready to clearly state your POV and reasoning. And also, make sure your partner is allowed to fully express his or her side of the story (no interruptions!).

Then What?

Congratulations! You’ve done a hard thing by learning how to have difficult money conversations, and I guarantee you’ll come out of it in a better place if you’ve followed the tips above. 

Before you walk away relieved, make sure you’ve done the following things:

Find a place to end and get closure on the conversation. Even if you’ve made only a tiny bit of progress, it’s fine to stop. Better to stop in a positive spot than to continue to push. You can come back and make more progress during your next financial discussion.

Decide together on action items and deadlines. Just like in a business meeting, don’t walk away until all action items are clearly decided and documented. Make sure you set a deadline on things that need to be done first.

Figure out when you’re going to come back together to talk about it. Rome wasn’t built in a day, and neither was your financial partnership. Make a plan for regular money meetings. Set the time on your calendars if you need to. No matter how you want to handle this, do NOT miss this step. 

Keep doing it! Practice makes perfect, and I believe in you! Keep up the good work. As Glennon Doyle says, “You can do hard things.”

Your Bonus

Here’s a bonus suggestion for the road: when you’re having money conversations, make sure you’re talking about your income AND your expenses. Too often, we get wrapped around the axle about teeny tiny (and often, non-consequential) spending choices, like how often we eat out or how much we spend on clothes. But the truth is that personal finance includes BOTH your spending and your income. 

Remember not to leave out that important aspect of the conversation. Often, it’s easier (and more rewarding!) to increase your income rather than penny pinch to the last cent.

In Conclusion

Learning how to have difficult money conversations is not the most fun task on our to-do list, but it might be the MOST IMPORTANT. Using these steps, I hope you’re able to find clarity, insight and ALIGNMENT with your spouse, family or business partner. 

Tell me in the comments below your biggest challenge when it comes to learning how to have difficult money conversations.