Why it’s important to talk about money with friends

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There is a promising trend emerging where people are starting to talk about money. In an inflationary economy where women hold nearly two-thirds of outstanding US student loan debt, friends debate shared financial aspirations.

Read more: 10 tips for talking about money with your significant other
And related: This is how you start to turn your finances inside out in a week

It can be a bit intimidating to talk about money with your friends. However, if you take a thoughtful approach, there is an incredible opportunity to share experiences where you can learn what to do and what not to do.

Why are money talks with friends important?

The media bombards us with news about money. Money is associated with power and desire. From these messages we learn that we need to compare ourselves to others. As a result, we often experience feelings of inadequacy, fear, or self-loathing. Or it can go in the opposite direction with feelings of superiority and entitlement.

Who can “win” when we have such feelings, especially when we are among trusted friends?

Sandi Bragar, chief client officer at Aspiriant, said reframe conversations about money with productivity in mind. What can you learn from your friends about money? In return, what lessons can they share in terms of finance?

“When we talk about money, especially with friends, we can share and unpack the lessons we’ve learned, directly and indirectly, about our attitudes and behaviors about money that are affecting our relationship with money,” Bragar said. “We can learn from each other’s experiences, which boosts our confidence and allows us to find our money mojo.”

Learn: If you can’t pay all your bills, which ones should you pay first?

Tips for talking to friends about money

Everyone benefits when we have productive conversations about money. Use these strategies to start a discussion with friends.

Start slow

Don’t pressure a friend to share too many details or ask intrusive questions. Go slow and focus on creating a supportive, natural and safe foundation.

“Create a strong foundation that serves as a safe environment for ongoing money conversations, and then build on that foundation over time as you build the trust and understanding needed to engage in deeper and more meaningful money conversations,” Bragar said.

Create a relaxing environment

Don’t save money in a noisy, crowded room for the first time. Bragar said to create a relaxing environment that is most conducive to discussion, comfortable and distraction-free. Maybe you meet in the living room of the other or go hiking together.

Make sure your friend is comfortable

You might want to talk about money with your friends, but there’s always a chance they won’t feel comfortable with this type of discussion. Bragar said you might consider providing context for the discussion or asking her permission to talk about money upfront.

Be honest

Once you’ve provided some context, open up to your friends and speak from a place of honesty.

Lorna Kapusta, Head of Women Investors and Customer Engagement at Fidelity Investments, said you don’t have to reveal every detail about your personal finances in this interview. However, you should be open about what you are willing to discuss and talk about it in a way that is genuine and helpful to the conversation.

While you and your friends don’t have to agree on every financial topic, that doesn’t necessarily mean you should keep quiet when you have concerns, Kapusta said.

“Whether it’s something your friend has shared or something you’re passionate about, finding an appropriate way to air those concerns could help you and your friend serve better in the long run — and don’t upset you or your friend at the end of the call,” Kapusta said.

Find out: 7 fastest ways to save $20,000 according to experts

Why financial transparency helps us stand up for our worth

Kapusta said that having productive conversations about money is key to clearing up misconceptions, giving you new opportunities to learn about managing your finances, and building confidence in your own financial picture.

A productive conversation about money allows us to further expand our knowledge and general benchmark understanding of finance, especially around topics like revenue and negotiation.

“When it comes specifically to income, these conversations can be an eye-opener to what’s possible and what you might be leaving on the table,” Kapusta said. “Women in particular are ready to take action when it comes to their finances – nine out of 10 women plan to take action within the next 12 months to help their money work harder. That could be a spark that will make you want to have that conversation with your manager or make that job change you might have been thinking about.”

Bobbi Rebell, CFP and personal finance expert at Tally, said having a supportive circle that holds you accountable for your financial goals can be a powerful benefit. Good friends will adjust to winning, not failing.

“Good friends build each other’s self-esteem and encourage each other to strive for what they think they deserve,” Bragar said. “The path to clarity begins with creating more opportunities to talk about money with others. These conversations allow us to develop thoughtful vocabulary and approaches that lead to natural, non-judgmental and productive personal finance conversations.”

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