I was chatting with a girlfriend recently about superannuation. It was quite refreshing actually, given the topic of money generally feels a bit taboo unless we’re (sort of) joking about how much we don’t have. We happily talk about sex, religion, boyfriend problems, bodily functions and every topic in between, but money and wealth acquisition is always such a funny one.
The truth is there’s a societal norm that makes talking about money awkward. If you’re anything like me and my friends, we share the most intimate details of our lives but I couldn’t tell you what they earn.
Why the taboo?
Why the taboo when it comes to talking money? For most people it comes down to being embarrassed about silly mistakes they’ve made, for others it comes from not wanting to share and put people offside and for some, it’s just because they’ve been taught that talking about money is impolite.
We want to seem like we’re nailing it at life, keeping up with the Jones’ and so we dig ourselves deeper and deeper into a cycle of debt – rather than prioritising the boring stuff like budgets, super and debt management.
Setting good financial behaviours starts at home, but with just 1 in 10 parents admitting to being comfortable even sharing what they earn with their children, how are we to learn?
Why we need to break the taboo
Because not talking about the subject doesn’t mean that it doesn’t exist. It’s baffling – we all run households and do budgeting – but when it comes to discussing the issue, it’s suddenly forbidden.
Talking about money can help you improve your money skills. You would be surprised to know how much you could learn just by casually approaching the topic with friends. For example, by talking about rent, you get insights into how much a property costs at a certain area.
If you’re avoiding talking about money because of some past mistakes, let us put you at ease by telling you that everyone has been there. Mistakes won’t go away just because you refuse to talk about it. If your goal was to buy a home, but you realise that you’ve screwed up somewhere – don’t panic. It’s never too late to start fresh.
Here’s one for the ladies: the gender pay gap currently sits at 14.6%. A Per Capita study also found that women end up with just over half the amount of superannuation balance upon retirement compared to men. These financial issues have to be talked about for there to be changes. Talk to your friends about money, be more aware of how much you are paid. Don’t sell yourself short!
The social taboo of talking about anything financial related can also mean that people may unwittingly be paying more than they need to. We don’t mean falling into a scam or being swindled. Not that kind of thing, but smaller things like paying for rent or your daily expenses. Talk to your friends and do your research online so you get a good handle on what’s happening in the market and what’s fair right now. While the difference of a few hundred could be seen as insignificant to some, it actually makes a big difference in the long run. Imagine overpaying $300 per month: that’s $3,600 in a year.
So don’t be afraid to talk about money!
How to break the taboo
The idea is when you’re comfortable about your financial situation, you won’t hesitate to talk about it. Pick up a book, read articles online or attend a seminar. Learn the basics of financial management. Don’t be afraid of asking questions when needed. If you’re still struggling, get practical advice from a financial planner. It may set you back a little, but it’s always worth it in the long run.
Educate your kids
Oftentimes, the conscious choice to not talk about money comes from upbringing. Our parents didn’t want us to worry, and us ourselves as parents, don’t want our kids to worry too. Maybe it’s time to break the taboo. Talk to them about money and teach them good saving habits. If you don’t, it will be a real concern in the future.
Understand that everyone is in the same boat
There is no real measure to financial wellness – if something works for you, it doesn’t mean that it would work for a friend. When talking about finance, don’t feel compelled to compete. If you are in a financially tough spot, hear what others have to say about their own situation instead of shying away from conversation. Who knows, maybe you could glean some useful advice.
Set a financial goal
It is never too late to set a financial goal. Aim to save $30,000 in a year or $3,000 in a month. Set as many goals as you want – for yourself and for your family, but be realistic. Don’t aim for $5,000 if you’re netting in $6,000 per month. Plan out your goals. If you’re looking to buy your first home, we can’t stress how important it is to keep to your financial goals. Here’s a guideline to help with your budgeting.
Here at Entourage, we talk all things money-related. We never shy away from all the difficult questions and will be with you on your property-buying journey. With changes to banking and serviceability you need to be 100% comfortable with your financial situation.
Book a free discovery call with an Entourage broker to get the conversation started.