April is Financial Literacy Month and at Union Savings Bank, it’s a special time of year. We celebrate the opportunity to talk about ways to budget and save money that can bring your financial goals within reach. After all, setting financial goals is the first step toward buying a home, sending kids to college, or planning a dream retirement. This Financial Literacy Month, we’ll be diving into personal stories about budgeting, saving, home buying, and talking about money with loved ones to inspire you to start conversations about your own financial goals.

I can’t believe I never learned how to talk about money.

Money often tops the list of taboo topics we are taught to avoid at a young age. We’re warned not to ask questions or talk about money at social gatherings or even among friends and family. While I see the value in discretion, I worry that this avoidance creates a knowledge gap when it comes to communicating about money effectively – and I fear that gap is growing wider.

My own knowledge gap was made very apparent after moving into my first apartment. I quickly realized that I did not have a frame of reference for many of my expenses, but I was too intimidated by the topic of money to have an open conversation with my roommates. Who paid for what? Were our utility companies overcharging us and, if so, how should we confront them about it? What do I say if something we’re all “chipping in” for pushes me outside my budget? Finding my voice was a lot of trial and error.

Purchasing my first car was also a challenge. My big mistake was having no idea what I was looking for, nor how much the vehicles were actually worth. I knew how much I was able to spend and that’s about it. Walking into dealership after dealership was exhausting, but little by little I gained a better feel for what I needed and what was worth my money. I can only imagine how much time and energy I would have saved if I had done some research ahead of time.

Similarly, I look back on the myriad opportunities to save money throughout my youth and beyond, but I never learned or sought out the right questions to ask.

Understanding the steps of buying a home was an even bigger challenge, but that is a story for another day.

Lessons I learned when talking about money.

Across the board, my experiences talking about money taught me three important lessons.

Lesson 1: Do your homework. Whether you are discussing utility payments with a roommate, a large ticket purchase with a sales representative or a promotion with your employer, having a frame of reference and understanding your options will undoubtedly boost your confidence.

Lesson 2: Speak up for yourself. Opting out of that expensive group gift or voting for the more economical travel destination can be uncomfortable if you’re not used to talking about money. But you can save yourself a lot of stress (and money!) in the long run by speaking up.

Lesson 3: Ask questions. Whether it is due to discomfort or the fear of appearing uninformed, we often avoid asking questions about money. Meeting with a financial expert and asking them all of your questions about savings, budgeting and more is a smart move.

Finding your voice when it comes to making financial decisions is key. Exposing the kids in your life to conversations about money from an early age can help them discover their voice more easily.

Why talking about money with the kids in your life is important.

In families with young children, conversations about money are often brushed off as too complicated for kids to understand. This means that decisions to buy a car new or used and whether or not the family should cut back on dining out are made behind closed doors. But I would argue that these are precisely the conversations that we should be having around the kids in our lives, especially once they begin earning an allowance or their first wages.

Speaking openly about money around the kids in your life can:

  1. Introduce kids to the concepts of budgeting and saving
  2. Teach children important negotiation skills that can be used later in life
  3. Illustrate the importance of accountability and taking ownership of one’s finances
  4. Encourage kids to speak up for themselves about financial decisions
  5. Give children a frame of reference for the value of their purchases
  6. Invite kids to ask questions about money and financial decisions

Last Financial Literacy Month, we discussed fun and effective ways to teach the kids in your life about the correlation between hard work and earning money. Speaking openly about money is a great way to illustrate this connection, as are the at-home lessons we shared. Imparting these lessons on the kids in your life is a good way to encourage them to make smart financial decisions as they grow.

Open conversations about money can also be helpful in relationships, particularly before getting married. Avoiding the topic of money for fear of causing an argument can lead to more problems in the long run, so be sure to discuss these 7 questions first. And if you and your significant other happen to have different approaches to your finances, it’s not necessarily a deal breaker. There are smart ways to navigate money together, even if you are financial opposites.

In the right setting, speaking openly about money can help to answer many questions and lead you toward reaching your financial goals. As goals change over your lifetime, keeping an open dialogue with your family and trusted financial experts can help keep you on the right track. If you have questions about ways to budget and save money, celebrate Financial Literacy Month by scheduling a complimentary meeting with our FutureTrack team.

 

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