“When you don’t talk, there’s a lot of stuff that ends up not getting said.” – Catherine Gilbert Murdock
The statistics remain nothing short of alarming:
- 50% of Americans have less than one month of savings saved for emergencies.
- One in four Americans has no savings at all.
- More than 30% of households earning over $100K still live paycheck to paycheck.
- Among indebted households, the average amount of credit card debt tops $15,000.
- The average U.S. household debt is 136 percent of household income.
- 57% of households do not have a budget.
- Almost half of Americans die with less than $10,000 in assets.
- In one survey, money more than sex, children or in-laws—was the most common conflict for American couples.
The statistics concerning our personal financial habits are downright sad. And yet, nobody is talking about it… at least, not in personal terms.
Money continues to remain one of the most least-discussed topics in our society. Just to be clear, there may be plenty of magazines, websites, and books written about money. But the topic is rarely discussed with any specificity in our interpersonal relationships. This truth exists for a number of reasons:
- We have been conditioned since a young age to not ask the questions.
- We have fears of looking foolish in our personal decision-making – that our spending will reveal too much about us.
- We worry about stirring up envy or comparison among our friends and family.
- We are concerned about how we will be perceived.
- It seems easier to just go at it alone.
But our silence is ruining us. We have so much to learn from one another in all aspects of life – including money. And it is clear that not having the conversation is negatively affecting us as persons, as families, and as a society. Personal finance is a conversation we need to be having with one another. We need to find the humility and the boldness to start asking the right questions.
Here are a few tips to get started:
1. Embrace humility and create a list of financial questions you need answered. How much money do I really need? Do I make enough money to purchase _______? How do I begin the process of getting out of debt? Should I be saving for retirement / my child’s college education? What is a credit score? How much money do other people spend on _______? Am I doing my taxes the right way? It sure seems like I spend a lot of money on ________, I wonder if that’s average? … You get the idea. Your specific questions are going to vary based on your lifestyle, but I think you’ll find the exercise to be far easier than you think.
2. Bring your best “I need some help” attitude. Find a friend you trust with these matters. Arrange a private moment to ask some of your questions. With an open mind and heart, begin asking any appropriate question from your list above. Take the high road of humility and ask for help using specifics – yours, not theirs. Keeping the focus on yourself will keep the pressure off of them.
3. Look for other opinions. Not every person will be an expert on every topic. In fact, most of them will simply answer your questions based on personal experience. It may be wise to ask the same questions of 2 or more different people to get well-rounded responses.
4. Seek out an expert. You likely have included a few questions in your list above that will require an expert opinion. For example, my list includes questions pertaining to taxes, online business accounting, saving for a child’s college education, and health care costs. While there are other questions on my list, these specific ones require an expert opinion. Pay if necessary, but consider your network of friends first. You likely have a friend that will gladly answer some of these questions for free. People love to help.
5. Include your family. Assuming your family is healthy and mature, don’t hesitate to ask specific questions of them. If you see members of your family acting foolishly with their finances, approach the subject. Likewise, if you are the one who needs the help making wise financial decisions, go to them. They love you the most and will be glad to help. Similarly, if your parents are aging, personal financial status is a conversation you need to be having with them.
6. Look for community help. Many local communities offer classes on personal finance. If you need help, look into your options. Sometimes these classes are offered through a local Parks and Recreation department. Others times they can be found available at local churches or nonprofit organizations.
No doubt, money is a great source of anxiety for many. Our world is filled with people making unwise choices. And most of us have a few questions about personal finance we’d like answered. Meanwhile, the answers are all around us… we just need to swallow our pride long enough to ask.
Image: Bohman
Yes!! America is drowning, not only in debt, but in financial stress! Reducing that stress, along with improving their marital communication are the two benefits my clients name as they favorites after they get on a written budget and start to build savings & dump debt. It is my passion to coach families into financial wellness!
As their favorites!! ????
For some people, it may seem too late. That they are too far down the hole to ever dig out. And that is okay. My husband and I have been there. Not too long ago we filed for bankruptcy and it was the best decision we ever made – in our case. People don’t know all the options that are out there and theres a lot of misconceptions. We are open and tell family and friends and everyone gasps and says its the worst thing we could have done. It is amazing that almost everyone we know knows nothing about bankruptcy and fears it without knowing what really happens. We are the happiest we have ever been and look forward to starting from the bottom! I thought I would share my comment in case it helps someone. Everywhere is different for bankruptcy, but it can be very eye-opening to learn more about that avenue and how it can protect you (and your home). We never knew anything about bankruptcy until we had already made some foolish money decisions and definitely lost more money that would have been protected. Some things are definitely worth the sacrifice of a credit rating.
Many people don’t recognize the problem because they can pay all their bills. They have very little saved for an emergency or retirement.
Unemployment, illness or other emergency can wipe you out very quickly, especially if your lifestyle is well above your means.
Often times nursing homes and care eat up the elderly populations savings rather quickly. Medicare makes sure of it. So maybe a smart discussion to have in regards to that, is to discuss trying to avoid costly care homes with family support, if possible. Sad that this stops people from passing on savings to future generations but it can. Maybe more people should create low cost trust agreements. And in regards to paying my mortgage/saving for college etcetera., it’s difficult to find good advice. Financial planners often have investments to sell. You have to really buckle down and do the research and then the math. There are some good articles and calculators out there, and it is stunning when you realize the amount of interest you pay, and could be saving by paying your 30 yr mortgage off in a decade! In my opinion it Blows everything else out of the water! 529 plans, worrying about qualifying assets for college financial aid, tax deductions. Who cares when you can easily save 100k in ten years instead? Oh, and I think a great addition to your article, or maybe a whole different article should be about the ease of which electronic spending methods allow us to blow our money….Out if sight out mind!
As someone who is just starting out in life, and recently paid off my student loan, what should my next fiscal goal be? Establishing fiscal stability or focusing on stashing away money for savings?
The root of the problem is financial ignorance, which is rampant. I’ve known less than a handful of people in my life who have had any sort of concept of developing and maintaining a personal rainy day fund let alone an old age fund or the ability to delay gratification or quit buying stuff they don’t need.
I’ve known NO ONE who regularly and systematically set aside money for retirement. My parents and grandparents didn’t really have to do so as they lived off SS and little pensions. But my siblings have never saved and they’re in their 50s now and broke!
Friends, as far as I know, haven’t saved. Some of their money situations can raise the hair on the back of your neck. My own old age fund has been mediocre at best. I am not going to retire with millions but I think my dh and I can retire which is better than average, I guess.
People don’t talk about finances because, generally speaking, we’re so very ignorant on the topic. To make matters worse, the high cost of housing, transportation, higher education and, health insurance coupled with the “need” to keep up appearances spells disaster and that’s why we have the horrible statistics we have today.
Spent more than I wanted to today, but my work is having fundraiser for homeless veterans, bought lots of dollar toothpastes, deodorants, soaps, bodywashes, etc. I personally don’t have much, but a h@#$ lot more than they do.
I almost didn’t read this, because I thought: “What’s the problem? We talk about money all the time.” Then I remembered I was German ;). Isn’t it odd that it doesn’t seem to be an issue here at all, but in almost every other country it’s considered taboo? I lived in England for a while and I was shocked that people never talked about such an interesting and vital topic. Don’t get me wrong, I’m not all about money, but it is kind of necessary to know where you are and where you’re going with the money you have (and haven’t). Great post, Joshua!
What does it really matter how much you have in assets when you die? Many successful people say that they’re kids should struggle and earn their own keep, in order to build character and integrity, rather than benefit from a substantial financial inheritance. I’m not sure why there’s such a focus in this society on postmortem asset valuation. What good is the money if you’re dead? Why give it to your kids when you started with no such inheritance? It’s an interesting paradox.
Sorry for the typo on “they’re”. Should be “their.”
In my opinion financial literacy should become part of the curriculum in schools. It is sad that we as a nation cannot come to grips that the American dream should not be more debt and possessions but a feeling of security within the means that we have. Live within our means. For me it is too late I made many mistakes and am deeply paying for those errors. I am glad that there is hope for people that are opening their eyes and becoming more aware that there is more to life then getting into debt and obtaining possessions.
I find it amazing that even basic budgeting isn’t mandatory in our schools. I’m just going through the process of teaching myself, now.
I follow your page on Facebook and I truly enjoy the positive message and interaction of other followers.
Ten years ago I was married and we were in debt with car, boat, credit cards, and more. I shopped to make myself feel good but the feeling never lasted. I decided to stop shopping for just one month. That led to another month, and another. Before I knew it a year had passed and I came to realize that my ex was not going to change his spending ways. Eventually he lied about money and hid money – which was the main reason for our divorce. I couldn’t live with the massive amount of debt he was acquiring and his deceitfulness. I took six months to slowly sell off everything. Car, truck, boat, motorcycle, canceled joint credit cards and banks accounts. When I walked away from our marriage, I had $1200. I moved to a new city and rented and apartment for $625 and a deposit of $625. That left me with $50 for groceries until my next paycheck. Times were tough for the six months. I had no bed, no sofa, no stuff. I bought piece by piece on Craigslist, and bought high quality kitchen products and clothes so I wouldn’t have to replace them. No more cheap junk.
Today I still rent that apartment ($700), I have a car that I paid cash for, and I keep my living expenses to a minimum. Since then I have traveled to over 30 countries and have lived abroad in three countries. I have over $100,000 cash available and two retirement accounts with about $50,000, and $0 debt. I make about 35k annually, so it was hard work to pay everything off and set my finances on the right path. I recently turned 40 years old and I feel good about the control I took of my finances, and I feel more secure than ever.
I encourage everyone to take a hard look and get honest about their finances. I have too many friends who make twice as much money than me and live paycheck to paycheck. They don’t understand how I made the change and have done all of my travels. They say “you’re so lucky” but it wasn’t luck. I just got honest with myself, made some minor changes that led to drastic changes, and committed myself to debt free living.
I feel light. I sleep great. I feel wonderful. I live free.
do you live in a regular sized house? but choose to live minimaly or do you live in a “Tiny House?”
Our home would best be described as “regular size.”
I realize this is an old post, but I just saw it for the first time on my Facebook feed. We’re going to be talking quite a bit about this at Christian Simplicity. We’re still getting things setup on the website, but this will be a significant part of the conversation there.
Allow me to also endorse Dave Ramsey’s Total Money Makeover. This no-nonsense book provides great advice to stay out of the statistics mentioned above. There is also lots of tips on how to have meaningful money conversations with your spouse, kids and others close to you.