Breaking the money taboo

Why is it difficult for people to talk about money? What can happen if we talk about money too much? At Compare Wealth Managers, we want to make it easier for people to talk about money, learn how to manage wealth, and feel comfortable asking for financial help when they need it.

A recent researched published by Hearst UK says that 68% of their female audience aged 18-34 are comfortable talking about their mental health, while only 48% are comfortable discussing their finances.

Money is a conversational topic dogged by stigma, shame, and fear of judgement. And Hearst UK insist it’s taking a toll on our mental health: 56% manifests having suffered sleepless nights over money woes before, while 68% agreed that money had impacted their mental health.

A 2020 YouGov survey revealed that money, or the 'm' word, was considered the greatest taboo. According to the survey, 50% of respondents believed that discussing personal finances was more unthinkable than discussing sex (42%), religion (26%), or politics (14%). The survey also found that 25% of respondents had lied to their family and friends about their personal finances.

Where The Money Taboo comes from

According to Forbes, traditionally, British people deemed it terribly gauche to talk about finances: “People who were wealthy didn’t need to talk about it because they knew — from how many houses you had, what cars you drove, how many servants you had, the yachts that you had, where you vacationed. They could figure out what your net worth was.” discloses Jodi R. R. Smith, of Mannersmith Etiquette Consulting. Even though Smith admits that in the US and other countries “new money” people feel more comfortable disclosing their worth, for traditional wealthy families, or “old money”, it is still taboo.

And that’s probably where the problem lays: traditions are very rarely questioned, and many people don’t feel comfortable even telling their closest friends and family sometimes how much money they made, or even if they’re struggling. But why do we still find it so difficult that we cannot even ask for help?

Money can be a very emotional subject

It is not only those who struggle with their finances that avoid discussing money. Many people find the topic confusing and feel they lack sufficient knowledge to engage in such conversations. "In the UK, people tend to be quite reserved when it comes to their finances. When people come into money, they can often struggle due to a lack of financial education" explains Rob Burgeman, Investment Manager at RBC Brewin Dolphin. "Many are unfamiliar with the concepts and language around insurance, loans, pensions, and savings."

So why is money such an uncomfortable and unmentionable subject? From an early age we learn to avoid talking about money. In school, we are taught that 'money is the root of all evil' and that discussing it is somehow rude, tasteless or crass. As we grow older, our relationship with money becomes more complex.

We may become preoccupied with not having enough of it or feel ignorant about how the world of money operates. Financial services companies often use confusing jargon and small print, which can make investing seem too complicated.

People may feel ashamed to talk about their mistakes with money, which can prevent them from learning and discussing financial topics.

Why do we need to avoid talking about money?

Economists and investors often refer to 'opportunity cost', which in simple terms means the hidden price you pay for not taking action. Choosing to bury your head in the sand and not talk about money can prove to be very costly in the long run. It means you're missing out on the opportunities that come with being in control of your finances.

Avoiding discussions about money can have severe consequences for individuals and those around them. Money is the primary cause of arguments between married couples and the second most common reason for divorce, after infidelity. According to research conducted by The Money and Pensions Service, 63% of people reported that financial concerns were negatively impacting the mental health of someone close to them.

Also amongst married couples, many women are left out of the conversation when it comes to long-term financial planning, allowing them in some cases to only handle the house budget. Poppy Fox, Investment Director at Quilter Cheviot, insists in bringing women into the conversation not only to break the taboo, but to find joy and success in the family financial journey: «To achieve financial success as a couple, it's crucial to involve both partners in financial decisions. Traditionally, only one spouse may attend meetings, but we believe in valuing the contributions of both individuals equally. Even if one person doesn't contribute financially, their role is still valuable. Each partner brings unique assets, and together, they can achieve great things.”

Start the conversation

If there was ever a time to feel comfortable opening up about your insecurities, fears, or past mistakes, it is now. Some other "former" taboo subjects such as mental health have become more accepted since the pandemic, so why not start discussing your experiences with money with your close family and friends? Sharing your concerns, discussing future plans, or asking questions can encourage others to open up and share their own. If you have a difficult relationship with money, it's likely that those around you do too. It's important to keep conversations non-judgmental and remember that money is an emotional subject, and everyone's life experiences are different. Money conversations should be a safe space where people don't judge or have a lack of empathy. 

Find out what matters to you

To change your relationship with money and overcome the money taboo, consider examining your personal connection with money. Begin by asking yourself what money means to you.

Dr. Alex Melkumian, founder of the Financial Psychology Center in Los Angeles, CA, told CNBC Select how everyone’s “money story” starts at childhood. “The foundation of anyone’s understanding and relationship with money is based with their family of origin coupled with any financial literacy education they receive throughout their life”. While many believe that money means 'financial security', it can also mean something different to you depending on your life story. Exploring the true meaning and significance of financial security can assist in identifying underlying concerns, prioritising goals, and devising a plan to address them, ultimately boosting confidence.

With this understanding, you can develop strategies to achieve both short-term and long-term financial objectives without apprehension or uncertainty.

Get professional advice 

Seeking professional advice can be intimidating for some people, fearing that their lack of knowledge on the subject might be seen as a weakness. However, having a professional financial adviser to listen to your financial needs, hopes, and fears is crucial for improving your relationship with money.

Investment advice is only one aspect of the services provided by financial advisers and wealth managers. During the fact-finding stage, they ask questions that go beyond the amount and duration of your investment. They are interested in your life goals, business plans, retirement plans, and the wealth you want to pass on to future generations.

Financial advisers aim to assist you in planning your financial journey through life and prepare you for unexpected events.

When consulting with a financial adviser or wealth manager, they will ensure that you feel comfortable asking any questions and provide you with all the necessary information to make informed financial decisions.

Money doesn't necessarily make us happier, but worrying about it can make us miserable. Breaking the taboo is the first step towards feeling more confident about money, making positive decisions to improve our finances, and taking control of our future.

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