The Money Conversation – Why Is It So Hard?

The following is a guest post by Ashwin Warrior from NerdWallet.com. If you’d like to have your own guest post featured on The First Million is the Hardest see my guest posting guidelines.

What is it about money that makes it so hard to discuss?

We live in the age of Twitter, a magical time when people instantaneously share the most intimate and mundane details of their lives with the entire world—but when it comes to discussions of money or personal finance? Crickets.

What is true on the Internet is also true in our daily lives: discussions of money are treated as taboo, to be avoided at all costs. In homes and workplaces these important, meaningful discussions go unaddressed; friendships are soured, and marriages are thrown into disarray, all over money.

Why? It doesn’t help that far too often salaries, savings, and investment portfolios transform into yardsticks by which to measure an individual’s worth. Money comes to represent power; we see dollars and cents, not the people behind them. And whenever we talk about money, we bring more to the table than simply investment tips. Attitudes toward money reflect deeply held values, which makes talking about it that much more difficult. It’s a shame, because these are discussions we can’t afford to ignore.

Financial management is something Americans should be talking more about. As our recent analysis shows, the shadow of debt still hangs over our country. Families are slowly deleveraging and paying off their obligations, but there’s a long way to go. Though the percentage of households carrying credit card debt has dropped significantly since 2009, decreased indebtedness is largely due to defaults, not repayment. As of June 2012, the average American household still owed $7,721 in credit card debt.

These numbers mean now more than ever we need to have honest, open discussions about money. But simply jumping into money discussions, however, can be like jumping off the diving board without first knowing if there’s water in the pool. It’s not easy to encourage healthy, productive dialogue on such a contentious issue. That’s why over at NerdWallet we brought in the experts, a psychologist and a therapist, to help clarify the issue.

The experts both began with words of warning, a reminder that money pervades all aspects of life and talking about it can escalate quickly—treat money conversations as you would any serious personal discussion. When it comes to overcoming the money discussion hurdle, their advice was to talk often and talk honestly. These discussions only get easier the more often you have them, but it’s important to speak candidly.

Money is a topic wrapped up in personal values, and values don’t change easily. Always state explicitly what you want and why. It becomes easier to explain why you want $1,000 more put toward savings for a future home or child’s education if your partner understands that you value financial stability because your childhood was marked by financial uncertainty.

Disagreement is common and to be expected, but is much more manageable if you make clear your reasoning and the history behind it. Productive discussions generally end in compromise, and listening to your friend or partner and understanding their wants, as well as the values behind them, can help get you there.

It may also help to seek outside support. As both of our experts point out, money is hard to talk about, and we don’t really get any training on how to do it. Talking with a counselor or a financial planner can help you better communicate both the values and practical considerations behind your decisions, and may be a wise investment in the long-term.

Author Bio: Ashwin Warrior is a personal finance blogger for NerdWallet.com, a site dedicated to promoting financial literacy and helping people answer real-life questions such as “How do I start paying down my debt?” and “What should I do as part of my retirement planning?”