Financial PlanningHow to talk about money

How to talk about money with...your children, your partner, your parents and your wealth manager

Research shows that financial stress can have a huge impact on our mental health, which is why it’s important to find the right way to talk about money

Every well-raised teenager knows that it’s bad form to talk about money or religion at the dinner table. However, our reticence to talk about our finances could be doing us more harm than good.

If you want to know how to get started talking about money, the following tips can help…

How to talk to your children about money management

  • The reason:With more of us using plastic cards and direct debits, children don’t often see their parents managing their money. It’s important that we talk about budgeting and give children a chance to think about money decisions before they get their hands on a student loan.
  • How to do it:  This depends on the age of the children, but there’s a great guide from the Money & Pensions service (https://www.moneyadviceservice.org.uk/en/articles/how-to-talk-to-your-children-about-money), in the UK. From letting them handle coins at ages three to five, to explaining your rationale for spending decisions at eight and then moving on to pocket money and clothes allowances, there are many conversations to be had.
  • Positive outcomes: The Money & Pension Service research shows that the younger you introduce your children to money concepts, the better they will be about their own money in the future, making them healthier and wealthier adults.

How to talk to your partner about financial goals

  • The reason:It’s important to have a financial plan and to understand enough about pensions to make decisions about saving for retirement.
  • How to do it: It’s good to make a specific time for a conversation like this, and make sure that you’ve got figures available in advance. Your online banking may have a good budgeting app within it, or try one of the many budget planning apps, which will help you to see where your cash is going. Talking about where you would like to be in terms of saving and spending in five, 10- and 20-years’ time could help you to have an effective conversation. If you think that a DIY approach may cause relationship strain, a wealth manager could help keep things on a business-like footing and ensure your goals are realistic.
  • Positive outcomes: Budgeting and saving together towards a common goal could actually strengthen your relationship rather than tearing it apart.

How to talk to older parents about their financial future

  • The reason: Money doesn’t get less complicated as you get older, with care demands, inheritance planning and continued budgeting to consider. It’s easy to leave financial considerations too late though, because it can be tricky to discuss issues such as failing health and faculties.
  • How to do it: Focus on the practical and research issues such as financial power of attorney, estate planning (including making a will) and care fees in advance. This is a complex area and a wealth manager, particularly one with experience in later-life care, could add real value as well as defusing any tension.
  • Positive outcomes: Making plans now can avoid huge stress later, including over inheritance, the management of finances when parents are in ill health, and can also save huge amounts of tax.

How to talk to a wealth manager at important stages in your life

  • The reason:  Life seldom progresses in the way we expect, and as our situation changes, our financial plans will change too. Whether it’s a wedding, the birth of a child, a house purchase, a divorce or the prospect of retirement, it is important to ensure your finances align with the new situation.
  • How to do it:  A wealth manager can take a holistic view of your financial situation, recommending realistic goals and advising you on the products you need. They’ll also be able to help you keep on track to meet your goals and may recommend more regular meetings depending on your needs.
  • Positive outcomes:  Having the right wealth, insurance and pension products for you has real mental and financial benefit. Knowing your family are protected in the event of ill health or death, and that you are prepared for retirement can provide peace of mind and improve many facets of your life.

In an increasingly complex and competitive world, expert financial advice is key to securing your future. So, contact us today for a free financial planning consultation and get all your financial affairs in order.

 

Important information

The views expressed in this article are those of the author and do not necessarily reflect the views of AAM Advisory Pte Ltd. This document is intended for general circulation and for information purposes only. It may not be published, circulated, reproduced or distributed in whole or part to any other person without prior consent of AAM. This document/article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any products mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed wealth manager regarding the suitability of the investment product before making a commitment to purchase the investment product. Whilst we have taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this document is subject to change without notice. The above report may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data. AAM advisory Pte Ltd is licensed by the Monetary Authority of Singapore, FA Licence no 100032.

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