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Talk To Other People About Finance

Inspired by The Weight Of Money’s Start Conversations About Money and the conclusion of Ask Uncle Bill’s Don’t Read This By Suze, I started just leaving comments on their posts and instead decided to expand my thoughts into a full post.

The Weight Of Money has it right when they say that we need to start more “non-threatening, non-comparative” conversations with those around us. A critical component of that kind of discussion is not preaching or assuming an air of superiority, even if you do happen to be an expert. (I don’t happen to be an expert, so this is easy for me!) Nobody likes being made to feel stupid, and that will be counterproductive to being able to learn from those you talk to.

For a couple of years now, even before I started ThoughtfulConsideration.com, I have been asking my family, friends and coworkers about their finances. Usually the lead in is something like, “Dollar amounts are none of my business, but what percentage of your gross salary are you saving for retirement?”

There are so many questions to ask that it’s hard to think of them all, but here are some I could come up with off the top of my head:

  • In terms of percentages, where is your retirement? Real estate/Roth IRAs/Traditional IRAs/etc.?
  • How do you make big financial decisions? Little decisions?
  • Who handles the finances in your house?
  • How do you pay for cars? Cash/loan/lease/etc.?
  • Is financial independence one of your goals, and if so, what does it mean to you?
  • What goal(s) do you need to reach before you can retire? How did you establish those?
  • If you have a 401k program at work, does your employer offer a match? If so, are you contributing enough to receive their maximum match?
  • What do you do with your tax refunds or work bonuses?
  • What would you do differently if you were given the chance?
  • What insights have you gained about any aspect of personal finances, money management, or investing?
  • Where did you learn to manage finances? Whose example do you follow?
  • What good decisions have you seen other people make? What bad decisions?

It’s fun to hear what other people think about money and investing. Opinions and approaches run the full gamut of possibilities, and the experiences of other people are very valuable in thinking through our own decisions. Instead of trying to think of what I’ll say next, I try to ask questions and let the other person do most (or all) of the talking.

There are quite a few interesting things I’ve learned from these conversations:

  • Our family’s Adult Allowance program — which my wife and I really enjoy — was modeled after our friends’ example
  • Some people have a spouse who loves to spend and that will probably prevent them from ever accumulating any significant amount of wealth
  • Some people are counting on one asset (investment property, a small business they run, etc.) as a very large component of their retirement, for better or worse
  • In some cases, people are in tremendous financial holes because of their own poor choices
  • Some people value paying off debt (even mortgages) over maximizing net returns
  • Many people have quite a bit of money sitting in accounts that don’t pay much because they don’t know about the higher interest earning alternatives (this was us before we started paying attention!)
  • Some people have decided that they prefer to pre-pay their bills rather than keep the money in a savings account
  • Regardless of how much I kick myself for not focusing on saving and budgeting sooner, we’re doing quite well now (managing our finances, that is, not necessarily in terms of net worth) compared to a lot of the people I talk to
  • Everyone has different priorities — This shouldn’t come as too much of a surprise, but the extent to which priorities vary continually amazes me!
  • Most people don’t know as much as they probably should about personal finances
  • Most people don’t spend nearly enough time thinking about their personal finances

Here’s the Question Of The Day:
What insights have you gained as a result of talking to other people?

11 comments to Talk To Other People About Finance

  • Thanks for the link and the continued elaboration on talking about money with peers.

    Lately, affordable housing discussions have been the most enlightening and encouraging. Our family can barely afford to buy a home in the Washington DC metro area. When we talk about the housing market with home-owning friends, it is good to hear them say that they wouldn’t be able to buy right now either. They bought their houses before the market reached its current outrageous levels. This really helps relive feelings of financial inadequacy and frustration.

  • Donna Jean,

    You’re welcome for the link; that’s what happens when you get people thinking.

    I have people saying the same thing to me about our market, that they couldn’t afford a house at today’s prices. It’s a nice sentiment on their part, but it does nothing to help those of us who didn’t get in early enough!

    —Andy

  • [...] just avoid: the impending takeover of our planet by a hostile race of killer robots. Also, how to overcome the awkwardness of talking to people about money. But seriously, people, we’ve got to start talking about the robots. Ignoring it won’t [...]

  • Those are some really important things to ask ourselves. Unfortunately, many times the best advice we can get is from our friends and family- learn from their mistakes and hope to make better ones ourselves.

  • These are some really good question, for sure! It may take us a lifetime to figure out what we should really have asked ourselves. Talking about it is the best thing we can do. Most of the best advice you will get is from people around you because you can learn from the best and worst they have done.

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