Why learning to talk about money will improve your finances

You don’t need to be obnoxious. But you should be honest

OK, we’ve heard it before: it’s rude to talk about money. Don’t ask how much someone paid for a big purchase. Avoid talking about your salary. And definitely don’t ask how much others earn.

Really? While we don’t want to be obnoxious about the subject, having open and honest conversations about money has benefits – including improved financial literacy, which leads to making better decisions with our money.

NAIT Accounting instructor Stacey Cooper says that money shouldn’t be taboo, especially since our financial health is so connected with our mental health. Indeed, discussing money can make people emotional, because we attach our own sense of self-worth to it. Here are her thoughts on why it pays off to get past that, and how to do it.

The real meaning of money

Cooper jokes that it was a lot easier talking about money when we were all students because none of us had any.

Now, it’s much more fraught because more money means more questions, like, “How do I start to invest?” or “How do I pay off my debt?”

The answers will come with introspection. Cooper advises that we need to figure out what money means to us personally.

Does money mean security? Freedom? Power?

“When you figure out what money means to you, that will also impact how you use it and the decisions you make.” Cooper says.

“If you don’t understand that about yourself, it’s going to be hard to figure out.”

The value of advice

Open conversations about money will invite a lot of advice, much of it conflicting. Friends and family will have differing opinions, and these will differ again from the results of your own research.

The Chartered Professional Accountants and the Government of Canada offer free financial literacy resources, says Cooper.

Her personal favourite is The Wealthy Barber, a classic, accessible read written by David Chilton, a successful businessperson from Waterloo, Ont.

That’s an important distinction: when looking at advice, make sure it comes from qualified people and that it is Canadian.

Think of all of this as a starting point, says Cooper.

It will help raise questions you can then take to a qualified financial adviser, which you can speak to for free through your bank.

There are no wrong answers – or even right ones

This might not give you every piece of the puzzle, Cooper adds. Other people’s opinions may not fit your financial circumstances or goals.

For example, say you’ve been saving money to buy a car. Do you buy an older car outright that is within your budget? Or do you finance a new car with a low interest rate instead, and keep what you saved in a tax-free savings account that has a higher interest rate?

Does money mean security? Freedom? Power?

Sometimes, the answer depends on how you feel about money, not just number crunching. If your goal is to invest your money, the second option is right for you. If you don’t like making monthly payments, however, then the first option is better. Both decisions are valid.

There are no stupid questions either

Here’s another big reason why talking about money is so hard: “Frankly, people are scared of looking stupid,” says Cooper.

“And if we’re scared of looking stupid, then we won’t ask questions.”

Questions will always be a key part of financial literacy, because the advice is always evolving. Tax rules change, interest rates change, life situations change.

Because of that, our strategies relating to money will also change over time.

What can’t change, however, is our ongoing openness to talking about those strategies.

"We have to remind ourselves that learning about money is a lifelong skill,” says Cooper.