“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
Rosa says
Hi Joshua
I totally agree about community help, and also with Kathleen that it can be just as valuable online. I’ve had a lot of help with these questions from the MoneySavingExpert website (I’m in the UK) and its forum, especially the Debt Free Wannabe board – it enables people to share things frankly even when there’s nobody in their ‘real life’ they feel they can tell, and the board is very supportive, often thoughts are offered from people who are going through similar situations. My diary thread helps keep me focused and so do my DFW online buddies :)
Rosa
Kathleen @ Frugal Portland says
Fascinating take! I couldn’t agree more. In fact, I even started blogging so that I wasn’t alone in this journey. Now I rely on my readers as much as my friends in real life (some even more!).
ZenPresence.com says
I say this again, only because it is so sad to see people enslaved to jobs they don’t like and the endless cycle of trying to be happy through spending….Check out the “Your Money or Your Life” program by Vicki Robin. If you don’t want to buy the book, there is enough info online to get started. Understand money as a representation of your time spent, how much of your life energy do you waste on trivial items ?
Here is an overview:
http://zenpresence.com/2012/08/your-money-or-your-life-9-steps-to.html
Dan Garner
ZenPresence.com
Brown Vagabonder says
Growing up fights over money were as common as sunny days in Dubai. I learned early on that money is an evil necessity and that the only way you dealt with it, is to avoid thinking about it.
Eventually, of course, I learned better. i realized how to be the master of money rather than its slave. I am still learning, but asking questions, reading books, and observing how other richer folk deal with their money, really helps.
TB at BlueCollarWorkman says
My wife and I talk about money, we have our budget and evetything set. Which is great. But my extended family is a different story. :-( Lots of spending problems and everyone is super quiet about it.
joshua becker says
Such a shame. It shouldn’t be that way.
Victoria says
Too many of the questions are looking sideways at who ever is in line of sight. Search for and look at a role model that is doing what you want to do, such as get out of debt. To follow a role who is NOT out of debt (because they are average), is not going to help. Be intentional and focus on the exceptional. Others have done it. “Your money or your Life.” is a classic.
joshua becker says
Appreciate this comment Victoria. In the original draft of this post, my second tip (talk to friends) hinted more at seeking out mentors who’s financial life was in order. Unfortunately, this is difficult to assess without actually engaging in the conversation. It’s tough to know who is actually a good financial role model without beginning the conversation.
Zen Presence says
For anyone wanting to truly get a grip on their finances I highly recommend “Your Money or Your Life” by Vicki Robin. It is much more than a financial plan. It will change your understanding of your relationship with money.
Dan Garner
http://ZenPresence.com
Cheryl says
This book truly changed how I thought about money–realizing that every thing I chose to do was a “trade”–my time/life in exchange for things (material things, living expenses, experiences)–I was never the same person after that. Understanding that money is only a “tool” and I could control that tool was empowering. I highly recommend this book also!
romney says
“Almost half of Americans die with less than $10,000 in assets.”
How is this a terrible problem? Why stockpile money and possessions for AFTER your death? (except for necessary funeral expenses and so forth). Seems like the ultimate in minimalist money management to dispose of your assets as you approach your death.
Yeah, I can see what you’re getting at, but this figure itself isn’t really the problem. More people than ever are living to a ripe old age, and should manage their money in a different way to a younger person with a family and debts such as a mortgage. Sure its nice to leave some money behind for your children, but if you don’t have all that responsibility anymore, why not live a little?* Go on that cruise! Sell the house and buy that campervan!
(* obviously, within certain sensible limits!)
joshua becker says
Hey Romney, thanks for the comment. I think the reason that statistic jumped out to me is because most of these people are not seeking the “ultimate money management” of disposing of all assets before death. If they were trying to accomplish that reality, maybe this would be an encouraging statistic. But that is rarely the case. Instead, it more often represents the life result of poor financial choices. < Again, speaking in broad general terms, of course. >
Midge Van Etten says
I have to agree with romney! What assets are left at the end of your life is definitely not a fair indication of a life well lived. Is it a poor financial choice to share what we have in our older years with people/family when they need it? We have no debt, no real savings, we own our home, and have what we need to get by. When we have a little extra, it gives us great joy to share it. I would certainly rather die poor and happy without regret then have my life judged by what’s left in our bank account. We just may sell our place and buy that RV!
Corissa says
If what romney and Midge Van Etten were saying was true for more people, it wouldn’t be a troublesome statistic. Too many people are buying things that they can’t afford, and this number expresses how little of it they actually own. It’s not about having lots of money and assets left over upon death.
Myra Hogan says
Poor can mean you can’t afford the basics. Maybe your not poor. If you have no way of making an income and no assests it sucks, being homeless is not fun . It’s not like camping .
Sydney says
I actually thought this was a great and shocking point. 10k in assets will barely cover a funeral/other after death expenses.
Dee says
I think the reason this statistic is so disturbing is that most of us do not know when we are going to die, so it does not indicate a planned disposal of assets, but a life lived on the edge of financial peril, and a failure to plan for those left behind. A major concern in our household is what to do with my in-laws when they begin to require a higher level of daily care or when one passes away. Neither has enough Social Security income to maintain their tiny home after the other dies, and they have no other funds for nursing care or even an occasional housekeeper. My own father may eventually need our physical help, but he, at least, has assets that we can use during that time if additional specialized care becomes necessary. Since we had our own child in our late 30s, we are very much squeezed between our own still-lingering student loans, launching him into the world properly and preparing for the day (likely very soon) when our parents need our help.
Craig Morton | Personal Change Life Coach says
I think this question of “How much money do I really need?” is what so many people miss. The mentality of hoarding and amassing money it rampent but we often set our goals on sums of money that we don’t actually need. It would be like going into a restaurant and ordering everything just to be on the safe side. But in the end 99% of it is not enjoyed by you. Thanks for the post.
joshua becker says
Appreciate that thought Craig. I also think that many people believe the solution to their financial crisis is to just make more money… then they could get out of debt, start saving for retirement, or donate to a charity. Meanwhile, in many of these cases, people who are earning less are already accomplishing some of those things. < These are, of course, broad generalities that I am speaking about. Every case is different. >
mike crosby says
Good point Craig. That’s food for thought.
And Joshua, I love your little posts on FB.
Jaky says
That’s true. Traditions are general and forceful. Sometimes, it feels like because we don’t ask questions we are powerless. Some of us never realize that taking control over one’s life starts by merely getting involved in searching answers to questions that really matter. Thoughtful. Inspiring. Like it.
joshua becker says
Jaky, that’s a fantastic line, “Some of us never realize that taking control over one’s life starts by merely getting involved in searching answers to questions that really matter.” Well said.
Jaky says
Oh yeah, I should tweet that with a link actually ;-)