Financial transparency: Learning to talk about money
“A new openness is changing the way we talk about our finances,” said Alex Holder in The Guardian. More people are sharing information about their salaries, their home budgets, and even credit card bills on social media, often with the hashtag #debt. Gig workers, in particular, are “self-organizing” in the absence of HR departments, establishing Facebook groups to discuss pay rates, offer advice, and air financial grievances. One key reason for this development is generational, said Hillary Hoffower in BusinessInsider.com. “Millennials are much more open about money than their parents are.” Our survey shows that 30 percent of Millennials share financial information with their friends. Among older generations, that’s practically unheard-of.
Talking about your salary can still be difficult and embarrassing, said Amy Bernstein in HBR.org. Income has always been the yardstick by which we measure ourselves. “In Pride and Prejudice, it’s right there. You know: Mr. Darcy, he gets 10,000 a year.” Finding out you make less than a co-worker can feel like a personal failing. But talking to colleagues gets us important information, and “helps us figure out if we’re being paid fairly.” Still, trying to have a conversation about money, with colleagues or friends, often shows us “how deeply our emotions are intertwined with our attitudes toward money,” said Claer Barrett in the Financial Times. Debt is an especially sensitive subject; tackling it almost always requires not just financial planning, but also understanding the “emotional reasons” for your spending. I’ve given more than 100 money talks over the past four years, and “there are always people who hang back at the end” to confide a personal question rather than ask it aloud. “Nine times out of 10, this will relate to debt.”
How do your neighbors “afford the elaborate remodel and the luxury vacations they’re bragging about on their Instagram accounts and the private-school tuition?” asked Alina Tugend in The New York Times. Often, when we see our friends’ spending, we assume we are just worse financial managers. In reality, that’s frequently untrue. Take the case of Ellen, who watched friends spend on vacations and home additions. It all came apart when her friends ran out of money and had to sell the home they had spent so much to remodel. In other cases, what you’re seeing is not out-of-control spending. It’s family help that pays for things like college tuition. When people apparently spend a lot more than their income would seem to justify, “it’s often because there is hidden wealth or hidden debt.” ■