It turns out it is not just a taboo amongst Australians. It has been revealed that people would rather speak about religion, politics and even sex, than they would about their finances, especially when talking to family and friends.
Talking finances is seen as something the majority of Australians are uneasy with, a staggering 50% will never discuss their finances with family or friends, while a further 14% still consider the topic taboo. Why do we find it so difficult to mention the ‘F’ word? Perhaps because money symbolizes different things to different people; power, control, security or ego.
Money is seen as an emotive topic, more so than religion or politics. Many people view their financial situation as a reflection of their personal success.
According to Mr Phil Slade, a behavioural economist “Australian’s want to avoid social comparisons where they can be viewed as more or less successful than their peers.” He goes onto explain how discussing topics such as income, budgeting and spending habits, leaves people feeling vulnerable.
Unfortunately, not discussing finances can lead to more uncomfortable situations. It is said that only 6% of people engage the family in matters of savings, budgeting and spending habits, and according to one Suncorp survey, only 6% of Australians would feel comfortable discussing their income with their children.
“Planning for a healthy financial future, discussing saving for an event, retirements or new car can prove to be so valuable to a family’s financial future. Children who are brought up with an understanding of their household finances generally fair better in the long run with regards to understanding their own finances. They have a better understanding of how to save and budget.” Tony Kofkin, founding partner of Kofkin, Bond and Co explained.
Tony Kofkin continued “With Over 50% of divorce being contributed to finances, it is reasonable to assume that this number could be lessened had discussions occurred earlier. Setting a good time to discuss the financial health of a relationship will help to keep a couple on the same track regards their expectations and goals. From early on in a relationship, goals and expectations should be discussed. The spending habits of a person may become a contentious topic if not addressed early on in a relationship, and children learn through example. Sitting down and actively engaging in financial discussions will help a younger person build a greater understanding of why the family is waiting three months to make a purchase, or why a certain amount of income is re-distributed directly to a saving fund.”
Whilst the “F” word remains a topic of discussion to avoid, more and more evidence is mounting up in favour of making it less so. For people to have a clear understanding of their financial health, expectations for the future and general understanding of how money works, making the topic less of a taboo with help greatly. If families need a kickstart, they can engage with a third-party person, a financial adviser, to get the ball rolling on why we should get comfortable with an uncomfortable topic.