Money conversations can be tricky: here’s how to start

Money is a key cause of conflict in relationships, and some financial conversations are extremely difficult to have. Here’s how to cope.

Psychotherapist Lissy Abrahams says discussing your money beliefs can help.

Talking about money with partners and family can be tricky, and some topics are so tough they are usually avoided.

However, staying silent risks seriously damaging relationships because anger and resentment can build, so money and psychology specialists have suggested ways to prevent potential pain.

NAB executive Krissie Jones says difficult money conversations often coincide with big life events such as moving out, having children, buying a home or preparing to retire.

“These conversations are often as much about relationships as they are money,” she says.

New research by NAB has found half of Australians do not regularly discuss their finances and one in three say money is a source of conflict in their relationship, and the bank has created a new guide to help people start talking. It suggests setting aside 45 minutes once a month to have money conversations.

“Money Mondays encourages small habits, like regularly checking your incomings and outgoings and having open and honest conversations with your partner about your money goals,” Jones says.

Financial differences are a huge cause of relationship stress. Picture: iStock.

Psychotherapist Lissy Abrahams says peoples’ minds have individual “money programs” shaped by thousands of experiences and messages from parents, family, school and communities.

She says it is important to understand how you think, and then explore your differences with your partner or other family member.

“Have many perspectives … there are many ways to resolve differences,” Abrahams says.

Here are four common causes of money conflict, and how to navigate them.

1. OVERSPENDING

Sometimes it’s one partner splashing too much cash. Sometimes it’s both.

“Savers are often frustrated, upset, or distressed when living with a spender,” Abrahams says.

Blake Tooth, an associate adviser at dmca advisory, says it is best to start a conversation when everyone is in a good mood, because talks can sour when a spender gets defensive.

“If you are concerned about overspending, set up accounts so that direct debits and transfers get all your most important expenses covered where everyone can see,” he says.

“Then you reduce arguments to the amount left after all vital expenses have been covered. You can leave yourself, or your partner, to manage a discretionary expenditure amount and don’t need to nitpick each other over where it goes.”

2. COST OF LIVING

Almost every household cost is climbing, and in many relationships something has to give.

Tooth says the cost of living is extremely relevant at the moment as many couples discuss reining things in.

“At the end of the day, you only have what comes into your account each month,” he says.

Tooth says people should be open to compromise and can use spreadsheets to work as a team on household finances.

“Never tell someone to ‘just calm down’,” he says. “If a discussion is too heated, you might need to have it later.

“Compromising and establishing shared goals is very important in these conversations.”

3. FAMILY FRICTION

Family situations provide plenty of fuel for fights about money, and Tooth says saying no to teenagers and young adults can be difficult.

“This year alone interest rates and the cost of living has risen steeply, and many might be facing financial strain for the first time,” he says. “It is best to be upfront early.”

Psychotherapist Lissy Abrahams says people have differences around tolerating debt.

Abrahams says spending money on children can create conflict as people have different ideas around what has value, and “financially supporting one’s in-laws can cause resentment and frustration”.

She suggests each family member “taking 10 minutes to write down as many ideas for solving the problem without being attached to any, and then sharing the lists with each other”.

“It’s important that no idea is shot down or deemed stupid.”

4. DEBT DANGERS

Soaring interest rates have made debt a pressing issue for many people, and rising repayments should be discussed calmly.

Abrahams says people have different abilities to tolerate debt, leading to anxiety or fear.

She says people will feel great when they control their financial situation, rather than their finances controlling their relationship.

“Crossing your fingers and hoping you will get there one day is not an effective strategy,” Abrahams says.

NAB’s Jones says people should think about what small daily habits they can start, such as a budget.

“There is something really powerful about writing down your incomings and outgoings,” she says.

Controlling debt and spending “can be as simple as setting up alerts on your banking app when you make a purchase, or the balance hits a certain amount”, Jones says.

TIPS FOR TALKING

• Set a monthly date to discuss finances.

• Set boundaries around honesty and respect.

• Discuss your childhood and money beliefs.

• Discuss current concerns and goals.

• Know the numbers around expenses, income and debt.

• Start a plan for the future.

Source: NAB Money Mondays Conversation Guide