The value of uncomfortable conversations when it comes to your money
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By Anton Keet
You are not alone if talking about money matters makes you uncomfortable. Money is frequently a cause of stress within relationships and families, but many of us don’t like to raise the topic. It’s okay to feel awkward talking about money, but it’s not okay to avoid the topic completely.
It is important to be open and honest when discussing personal financial matters, in order to maintain healthy relationships and finances. If something happens, that affects your finances you need to openly talk about it, to avoid making money problems worse.
Key money conversations to have with family
How to get on the same page, financially, within your household
Explain to your family that a budget is the tool that helps you manage your money. Show them how you set up a budget, explaining income and expenses – more importantly how living within your means is beneficial for good financial management. You can ask your family to share what expenses they might have and show them how these are part of your household budget. This will help them understand how planning for these expenses in a budget ensures you can afford them.
Be honest about the amount of existing debt
Many of us have debt we would like to get rid of so that we have more money to spend on our families and other important things. Debt is a conversation you must have with your family to prevent debt overwhelming you and upsetting family relationships.
Should the bread winner no longer be around – what does this mean for the family?
Death is inevitable, however many of us avoid this topic. But if you take a practical approach and explain what plans you have in place; you can prevent your family from worrying about their financial future if you are no longer around. Here is what you need to discuss:
Funeral preferences and arrangements, what happens to the home and other assets – more importantly tell your family where your will is and what’s in it and also explain that you have a Will so inheriting and estate management will be as easy as possible for them
Coping with unexpected disability or illness of a breadwinner
Illness and disability can affect a person’s ability to work and may also come with an increase in medical and living costs - the need for home care, for example. This can put a serious strain on the family finances. There are ways to ease the financial burden, such as insurance and medical aid.
Medical aid: Make sure your family knows which medical aid you have and what it covers so they can help with claims and know that some or all the costs will be met.
Disability insurance: If you have a disability policy, either on your own or as part of group cover, tell your family what this is and how it can be used to pay for extra medical or rehab expenses and cover income if you cannot work.
Income protection insurance: You may have income protection that pays all or part of your income if you are temporarily unable to work. This can ease the financial burden when you are not earning and ensures your family continues to meet their living expenses.
Dread disease insurance: This pays a lump sum amount if you are diagnosed with a critical illness such as cancer. Explain to your family why you took this cover and how it can be used to pay for medical expenses, living expenses and other extra expenses when you are ill.
Making money part of our everyday lives
Money is central to our lives, there are everyday events that naturally provide opportunities for money discussions. These include when we are watching our favourite programmes, the news, planning to eat out or go grocery shopping. Having conversations about money builds children's confidence in the subject and helps them to develop healthy financial skills of their own.
It should become a norm to have money conversations with our families – these should be less threatening but offer us peace of mind regarding the family’s financial future. Children, and adults, ask a lot of questions because they are curious about life, and sometimes a little worried. Having money conversations with them, and other family members will take away some of the uncertainty and answer some of their questions in advance. And you’ll be building a money-savvy future generation!
Anton Keet is the Head of Risk Services at 1Life