How to talk to your loved ones about money
Being proactive with your savings can help to make your future financially secure. But with the current state of the economic environment, talking about money matters with loved ones can be a tricky subject to broach.
Many families in the UK are still feeling the pinch of the 2008 banking crisis. The cost of living has increased five times more than the average annual pay rise, low interest rates have stemmed pension funds and rising food bills put a strain on household incomes.
The good news is the UK economy is improving and although the Bank of England decided to leave base rates at 0.5% in January, there is hope that interest rates will go up later this year.
There is cause for optimism, and taking positive steps to organise your financial affairs puts you in control. You may see that, but maybe a loved one is resistant to the idea of investing money for the future when they feel the financial burden of the present.
Ease into the conversation
If you feel talking about money to a loved one may pose a problem, let the subject arise naturally in conversation. If you try and force the issue by asking money questions outright, your loved one may feel pressured – especially if they do not take money matters as seriously as you do.
Therefore it is wise to tactfully introduce money matters into a conversation subtly. The best way to do this is to comment about actual things in your own life and look for empathy from the other person.
For example, you could use energy bills as a route to what you actually want to talk about.
From this starting point, you could steer the conversation towards savings by referring to the improving economy in the UK and the banks’ plans to increase interest rates. If you feel you need impartial advice use information from the internet or other trustworthy sources.
Recommend books
Books can be a useful tool to bring up money matters. You can always casually mention book recommendations to you friends and family, and even if they never pick it up, a conversation can begin. If possible, talk about solutions to a financial situation they can relate to—you will find plenty of books offering financial advice in your local book store, and ideally you should choose one that specifically relates to the situation you want to speak with your loved one about. If you are not sure which book will have the most effective, check out this list of top 10 finance books of all time.
Don’t forget about retirement
Not everyone will receive 100% of their state pension, and it is estimated millions will miss out this year. Therefore the need to learn about private pensions is more vital than ever.
Plenty of specialists in the UK help investors plan a personalised pension plan and offer advice so you understand how investing works. There is a wealth of free tools out there aimed at the novice investor, so you can learn alongside your loved one. If you are concerned about a loved one’s finances, talking to them about an income before they are retired is an appropriate way of getting them to think about their financial affairs.
The economy will always be a rollercoaster ride, but the current upward curve presents you with a prime opportunity to talk about money with a loved one – and maybe even convince them to save for the future.
