Financial Openness in the New Year

 I hope you all had an enjoyable week last week. I had a great time in Georgia hanging out with my family, cooking, and talking personal finance. I also enjoyed my extra days of binge-watching some Breaking Bad. (Ben and I have made the last couple of days a marathon of getting through the series.) I can’t believe it’s New Year’s Eve already!

I encountered several personal finance lessons during my time off, but my favorite by far was a reminder of the importance of communicating your financial situation with your family.

I continue to develop a growing appreciation for my relationship with my family and our finances. As I wrote previously, my brother, mother, and I have had to band together to manage the money my dad left her. And while that task is much easier today given my education and experience, I couldn’t help at all without my family’s willingness to open up about their financial lives.

My mom and I spent the day after Christmas going over her investments, her estate plan, and her prenup. After asking to see document after document, and her getting me whatever I requested, I began to realize how fortunate I am to have a mother who will share anything with me. She also allowed Ben to become a part of the conversation and provide what insight he could. 

Of course, we do the same for her. She and my brother have copies of our wills, trusts, insurance documents, and What My Family Should Know sheets.  She can ask us anything and everything about our situation.

I realize that not all families are like this. And our family hasn’t always been this way. For a while, my mom wouldn’t communicate about her problems or financial questions until after she made a mistake.

For example, her “advisor” convinced her to switch the annuity she had originally invested with him to an annuity with a different company he was going to work for. This switch would have restarted all of the fees and commissions she had just finished paying. She didn’t tell me about the switch until two weeks after she did it. I was furious.

Luckily, I caught it in enough time to reverse the damage. But it was definitely a tense conversation between us. It took several years of these types of situations and me sharing my financial habits and difficulties to get her to open up before she encountered a problem.

I can’t say enough how important developing this trust and openness will be for everyone involved. Communicating with those closest to you will help develop a strategy for dealing with any financial emergency and help you learn from situations you may not normally encounter.

If you are having trouble getting a spouse, sibling, or parent to open up, try putting your cards on the table. Share information on your income, debts, and financial goals. 

In addition, let them know you want to share your financial lives out of love and the desire to have everyone taken care of, rather than just wanting to pry into their financial life. The last thing you want to do is come off as a “know-it-all,” so let them know your struggles and questions and work through them together.

As the new year approaches and you start setting those resolutions, make sure to keep being financially open at the top of your list.  Developing financial openness in your relationships may be the most important financial-planning tool in your toolbox.