Americans have a complex relationship with money due to widespread issues like hustle culture, consumerism, and a lack of formal financial education. Combine that with the arbitrary ideas and behaviors we all inherit from our families, and there’s a lot to unpack.
Understanding the factors that have shaped your financial perspective is essential for managing your closest relationships, especially those with people who have different values and beliefs.
Let’s explore the role of family and culture in personal finance and discuss some practical communication tactics to help you navigate disagreements about money.
The Role of Family in Personal Finance
Family influence is arguably the most significant factor to consider when analyzing your relationship with money. Many of us internalize our parent’s financial tendencies in our youth and struggle to deviate from them later in life, even if they’re causing problems.
Their behaviors serve as the model for our choices, and their comments become the voices in the backs of our heads. Even the goals they strive for and their successes or setbacks along the way inform our expectations for ourselves.
If your parents spend recklessly, you may be more likely to struggle with budgeting or have unreasonable lifestyle expectations. Seeing them prioritize accumulating material possessions can create a similar tendency to indulge in luxury goods.
Conversely, growing up in a house with parents who consistently struggle to make ends meet or openly express their financial anxieties, you may be more likely to develop financial insecurities. That can cause issues like excess frugality, a pathological aversion to debt, or a fear of investing.
📗 Learn More: How To Overcome The Fear Of Investing
The Role of Culture in Personal Finance
While your immediate family often has a direct and rather obvious impact on your financial habits, the broader culture around you tends to have a more subtle influence. Unfortunately, managing the habits you pick up indirectly can be even more challenging since you may not be aware of them in the first place.
David Foster Wallace’s famous commencement speech at Kenyon College included a brief parable highlighting this concept. It reads:
There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually, one of them looks over at the other and goes, “What the hell is water?”
That’s a rather clever way of pointing out that some aspects of our environment can be so normalized to us that we don’t even notice them. They’re right under our noses, but we don’t recognize their significance and therefore fail to question them.
Unfortunately, that frequently applies to ideas that can be highly detrimental to our personal finances. These assumptions often come from the behaviors displayed in our communities and perpetuated by the media we consume.
For example, car ownership is ubiquitous in the United States, with roughly 92% of American households having access to at least one vehicle in 2021[1]. As a result, we tend to consider cars a given, even going so far as to look down on people who opt for other modes of transportation.
However, many of us could save significant amounts of money, increase our physical fitness, and help preserve our environment by going without them, especially those who work remotely.
📗 Learn More: How Much Car Can I Afford to Buy?
Challenges Caused by Differing Financial Perspectives
Because so many variables affect our views on money growing up, we can end up with wildly different financial perspectives from those closest to us in adulthood. Most notably, that often includes our romantic partners.
Unfortunately, conflicting financial opinions can be incredibly difficult to navigate in intimate relationships. The stakes are so high that discussions frequently become emotionally charged, making people even less likely to change their minds.
In romantic relationships, these conflicts often revolve around lifestyle preferences. When one partner consistently wants to spend more money than the other, it’s hard to satisfy both people’s expectations.
Division of financial responsibility is another tricky issue. For example, when couples have an income disparity, how do you split expenses? In familial relationships, should an adult child that’s more successful than the rest of their family give or loan money to their parents or siblings?
While navigating differences of opinion in these areas is challenging, it’s essential that you learn to work toward resolutions that satisfy both parties peacefully. Financial disagreements can be lethal to the relationships that matter most.
Money issues and arguments are among the top three causes of divorce, responsible for roughly 22% of failed marriages[2]. Non-romantic relationships are just as vulnerable, with 1 in 6 of consumers reporting that money has ruined at least one of their relationships with a friend or family member[3].
How to Navigate Differing Financial Perspectives
Having different views on money can lead to significant friction in close relationships. However, two willing parties can resolve almost any financial disagreement with the proper preparation and communication strategies.
Here are some steps that can help you develop healthy habits and reach compromises with partners or family members who have different financial opinions.
Reflect on Your Financial Perspective
Before engaging with someone else’s ideas on personal finance, spend time reflecting on your own. Taking an honest look at your relationship with money and coming to accurate conclusions about your tendencies will be invaluable when you need to discuss them with someone else.
Start by asking critical questions like the following:
- Family background: What kind of relationship does your family have with money, and how has it shaped your own? What financial ideas and habits do you share with your parents, and how have those served them?
- Cultural experience: What ideas do you have about personal finance due to the culture you grew up in? Where might you have blind spots that hinder your ability to have healthy relationships or reach your financial goals?
- Personal perspective: Which of your unique personality traits and experiences have had the greatest impact on your relationship with money, and how? What are your most significant financial strengths and weaknesses?
Reflecting on questions like these can help you clarify how and why you handle money the way you do. When you need to discuss your perspective with another person, you’ll be much better prepared to articulate it.
This self-analysis also helps you separate the beliefs and behaviors you can justify from those you can’t. It may reveal habits you’ve learned for the wrong reasons and should probably leave behind.
Have Regular Discussions Aimed at Understanding
Once you have a good grasp of your own financial experiences and perspective, the best next step is to start having money talks with your partner or family member. At this stage, your primary goal is to understand each other.
Here are some tips to make those conversations as beneficial as possible:
- Practice active listening: Learn to listen to the other party without planning what you’ll say in response. Ask clarifying questions when appropriate, but don’t interrupt. Focus on putting yourself in their shoes and empathizing with their experience and perspective.
- Practice being vulnerable: When it’s your turn to talk, share the results of your previous introspection. Go beyond what your beliefs and behaviors are and dig into the reasoning behind them. Try to get out of your comfort zone and share some of the things you’re not proud of.
- Set a positive precedent: One of the main issues people struggle with when discussing money is that the topic produces anxiety. Try to establish early that these conversations aren’t something to fear. For example, you might consider having them over a nice dinner or while going for a drive in a pretty neighborhood.
It’s best not to try to resolve any differences of opinion during this process. If the other person makes a statement that you have an issue with, you can make a note of it but don’t try to contest it just yet.
Not only does having these discussions help you understand the other party’s perspective, but it also builds trust and healthy communication habits. All of that will be incredibly helpful when you need to negotiate with each other.
Negotiate Solutions to Shared Issues
During your early discussions, both parties should develop an understanding of each other’s financial perspectives. At the same time, you’ll build confidence in your ability to talk about money together in a healthy and productive way.
Once you’ve had some practice and feel well-equipped to tackle the disagreements you need to address, shift the focus of your conversations to resolving those conflicts. Here are some tips to keep in mind during this stage in the process:
- Set specific goals: Measurable goals make it much easier to reach practical solutions. For example, instead of saying you’d like your partner to save more money for your shared retirement, say that you’d like them to reduce their spending by $500 per month and redirect those savings to the mortgage.
- Be willing to change your mind: Many of us can be stubborn about money, myself included, but that’s often unproductive. If the other person makes a reasonable argument, be open to changing your financial beliefs. Listen to their feedback with a level head and be willing to adjust to sensible criticism.
- Look for ways to compromise: Always try to find a way to satisfy both parties. It’s not always possible to make both people happy, but that should be the goal. Don’t approach financial discussions looking to win or get your way. Instead, work together to solve whatever problems you’re facing.
You probably won’t solve all your disagreements with a single conversation, so don’t rush the process. Pace yourself and discuss your issues regularly until you reach a solution you both approve of.
Even after you’ve implemented your plan, schedule regular check-ins to make sure both parties are happy with how things are playing out. Make sure everyone feels comfortable voicing their dissatisfaction if it doesn’t go as well as you hope.
Consider Consulting a Financial Advisor or Therapist
Hiring an objective third party to help you navigate financial negotiations can be highly beneficial. If you’re struggling to reach solutions on your own, consider involving a financial advisor or therapist.
They can provide a safe space, help enforce each party’s boundaries, and provide the kind of insight that only comes with experience and expertise. That can be especially valuable to partners or families who’ve already made mistakes that damaged their relationship.
📗 Learn More: What Is Financial Therapy and How Can It Help You?
Have Financial Discussions Early
The best way to avoid financial conflict is to address issues early and resolve differences of opinion before they devolve into full-blown arguments. As is the case in most areas of personal finance, the more proactive you are, the better.
When you get ahead of the problem, people tend to have cooler heads, which is essential. Nothing makes financial negotiations more difficult than anger and resentment between the parties involved.
Starting early also means you can take your time and do things correctly. When neither side feels pressured, you can spend however long you need learning about each other’s perspectives, setting good precedents, and building trust.
If you’re in a serious romantic relationship or have financial disagreements to resolve with a family member, don’t wait. Start addressing the issue today.
