Mwananchi Credit guides you on overcoming the fear of money talk, a first step towards better finances

Finance

  • Author Gitonga Muriithi
  • Published February 24, 2024
  • Word count 1,051

Talking about money can be awkward sometimes, but money can be important to your personal relationships and your financial security. Getting over your fear of money talk lets you talk about things like your expenses as a couple, retirement, income, and inheritance. Mwananchi Credit the leading microfinance company in Kenya offering the best, quick and most affordable loans and log book loans shared some things to know to break the money taboo.

Love and money

Why don’t people talk about money on the first date? It’s not like it’s a trivial part of sharing your life with someone, after all. It’s mainly for cultural reasons that we unconsciously decide to leave that stuff for later. Romantic relationships aren’t subject to market logic. But the kind of emotional logic applied to them is equally necessary to social life. That’s why talking about personal finances—looking out for #1—seems to violate the fundamental principles of love: altruism and disinterestedness.

Money can be a source of conflict because we don’t all manage it the same way or attach the same importance to it. That’s one of the reasons people, consciously or unconsciously, steer clear of the subject: you don’t want to undermine your relationship in its early stages. Instead you put money to work for the relationship. You give gifts, pay for dinner, buy new clothes so you can look your best.

But if you’re aware of the emotional mechanisms at work, it’s easier to sidestep them and opt instead for openness and transparency. Find out if you and your prospective partner are financially compatible right away. You’ll spare yourself some heartbreak and maybe some pointless expenses as well.

Of course, it’s not like it’s easy to talk about money after your relationship is farther along and committed either. Take the example of those couples with big differences in income. The person who makes less money often feels pressured to cover half their combined expenses. This can lead to a big difference in the partners’ savings capacity and, eventually, their retirement income.

But many couples seem eager to duck any talk of the long term. What do we want to do when we retire? What do we want to leave to the kids? How much money does each of us need to do what we want to do? How does it all line up with what we’re doing right now? You can’t ever forget that a couple isn’t a homogenous unit—there are two individuals in it whose incomes and aspirations differ. That makes it all the more important to be open and talk to each other about your goals and how you’re going to achieve them.

All these questions are essential to long-term financial planning. But many couples haven’t looked for the answers. It’s not that they’re not interested. They just can’t bring themselves to talk about it with their partner. The main reason is insecurity. They don’t want to look clueless, or be one of these people who has no retirement savings. And they sure don’t want to look like they’ve totally lost faith in the relationship and are now only concerned about their own financial interests—or about to pull the plug.

The worst-case scenario for couples who don’t communicate is poverty for the most vulnerable partner if they separate. They’re victims of the money taboo. They didn’t protect themselves financially in case of separation. They contributed more than their share in time and money to the life of the family and got no long-term monetary payoff. They neglected savings in the interests of “fairly” sharing day-to-day expenses. They never drew up a contract to make sure they’d come away with their fair share of the household assets. There are a lot of ways to end up facing financial hardship overnight. But there’s no shortage of ways to protect yourself either, once you get yourself to talk about money, either with your partner or a specialist.

What about family and friends?

Financial interdependence is less likely in non-spousal personal relationships, so people are less likely to let things slide. But there are still good reasons to talk frankly about money there too.

In the family, you can talk about inheritance and clear up any misunderstandings. It’s a chance to air everybody’s wishes and maybe settle some the inheritance early so that seniors can see their loved ones enjoying their legacy while they’re still alive.

With friends as well, being honest about your financial situation can prevent awkwardness about the costs of going out and doing things as a group. You might casually pick up a few ideas on financial management that you can use to improve your own situation.

Your family and friends can also be good motivators you can share your career goals with. Go ahead and talk about it—your goals, pay, benefits, and all the rest. You’ll feel more committed when you have people there with you.

Why break the taboo against money? Knowledge is power

Treating money as a taboo topic has a long and sordid history of leading to unfairness or making it worse, leaving a trail of financial insecurity in its wake. The fact is, the more you talk about it, the more you learn, and the easier it gets. The more you take an interest in money, the better you’ll manage your finances.

But don’t underestimate how hard it is, or the amount of friction that conversations about money can generate. For the stickiest of such conversations, you might want a professional for support. Financial planners and advisors, notaries, attorneys, and human resources professionals are neutral third parties who can help you start a dialogue with your loved ones.

Your budget, savings, wages, estate, relationship, and retirement can benefit enormously.

Outside help is a great thing, but the first step is to become aware of the emotional reasons you avoid money questions. Then you’re ready to make the effort to address the subject frankly and openly. Be prepared to learn, share, grow, and get some advice.

The article was written by Gitonga Muriithi, Head of Commercial-Mwananchi Credit

mwananchicredit.com

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