Ask the Readers: How Can I Talk to My Parents about Money?
In many families, money is a taboo subject. It's not something that's discussed openly. But this weekend, as people gather to celebrate Christmas, there will be lots of opportunities to bring up the topic with parents — and other loved ones. But how do you do it? That's what Sean wants to know.
He feels it's important to understand his parents' finances, but they're not willing to share. What should he do? Here's Sean's question:
I'm a sophomore in college. My father sold a company several years ago and now has a small business selling things online. Because of my father's previous income, I don't qualify for any financial aid, including loans. However, I know that he no longer makes much money anymore. I'm worried that all of my father's income is going to paying to my tuition and living expenses (about $50,000 a year). I have a strong suspicion that he's drawing from his savings to pay for my tuition, and it's only going to get worse because my brother will be attending college next year.
My parents tell me not to worry and have kept a strict policy of not telling me how much my father earns. My father is financially responsible, but his focus is on increasing income rather than on decreasing expenses. My worry is that I'm being a drain on my family's savings.
How can I ask my parents and get a straight answer about their financial situation?
There are actually two issues here.
- The first is Sean's concern that he's a financial burden on his family. That's worth an entire column itself, but for today I'll simply encourage Sean to do what he can to actively decrease this burden by applying for scholarships and earning as much money as he can on his own. (It can be done. My parents couldn't afford to send me to school, so I funded my entire college education through scholarships and lots of off-campus work.)
- Today, though, I want to talk about Sean's second question: How can he get his parents to discuss their financial situation?
My own family has always been relatively open about money. When I was growing up, my parents weren't shy about letting us know there wasn't much of it. I can remember looking at their tax returns when I was in high school (though they didn't make much sense at the time). Before my father died in 1995, he explained how he was structuring the business and the income stream for my mother. That said, there was still a mess to untangle when I took over my mother's finances while she was in the hospital this summer. (Now, though, I have them running like clockwork!)
My wife's family is a little less open. It's not that they're secretive, but until recently, they just didn't share details. After the crisis with my mother this summer, though, Kris and her sister sat down and point-blank asked their parents for the information they felt they needed. Over the past several months, the entire family has been swapping account numbers and balances so that if anything happens, somebody can step in to take care of things.
Really, though, Sean isn't asking about the mechanics of sharing. He's asking how to get people to talk about money in the first place. How can you get your parents to open up when they steadfastly refuse to do so?
I think it's important to approach this in an almost clinical manner — not an emotional one. This is business, and it's important business. If I were in his shoes, I might forward the recent reader story from Jody, whose father involved her in the entire estate-planning process. That story demonstrates the advantages of being open about your financial situation, and the advantages of involving the family in the process.
Have you introduced the subject of money with your parents? How do you get them to talk plainly about their financial situation? Or did you? What advice can you give Sean for talking about money in a way that won't make his parents feel threatened? If you were in his shoes, what would you do?