Do You Have a Financial Confidant?

October 29, 2007 at 2:27 AM 10 comments

Everyone has their own level of comfort when it comes to the topic of finances. Take for instance, buying a new house. I have two good friends who I’ve both known for years and years. One told me the listing price of the house she wants to buy, while the other provided every detail of the house except the price. Why does one friend feel comfortable in quoting the price when the other one doesn’t? Is she uncomfortable telling me the price? Does she think it will provide insight into her finances? Does she think it’s a taboo topic that shouldn’t be discussed? Or does she simply think that no one needs to know?

I’m always amazed by how open or shut friends and family are about their finances. For instance, a few weeks ago a former co-worker and I met up for dinner. First he told me his previous salary, then his current salary, and lastly what he’s been offered at recent job interviews. I didn’t ask. He just offered.

Most of us avoid discussing our finances with others. As money remains a taboo topic few feel the urge to announce salaries or provide the details of net worth. I don’t normally discuss these topics either but I do discuss general financial issues and concepts quite frequently with quite a few people in my life. Included in the list are my husband, my parents, my in-laws and a few good friends. There are certainly some people who remain off the list including siblings. There are many reasons not to discuss money, but jealousy and sibling rivalry are probably the biggest ones.

I sometimes wonder if people would share greater details about their finances if they knew I maintained this blog. Recently I outed myself to a good friend after she discussed her financial situation in detail. She is the only person, other than my husband that I’ve ever told about this blog, and it has opened the floodgates for us to discuss financial issues. I feel as though I’ve become her financial confidant, but we’ve been good friends for years, and honestly, prior to this discussion there weren’t too many taboo topics between us.

I wonder though, as I write and read more on the topic of personal finance if I will become more open on the topic. I don’t plan on declaring my salary to the world, but as time progresses I find myself providing more and more financial details about myself. In fact, if I were buying a house I’m sure I’d mention the purchase price.

Entry filed under: blogging, family, friends. Tags: .

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10 Comments Add your own

  • 1. Anonymous  |  October 30, 2007 at 4:12 AM

    i had a semi-awkward moment when my brother and i exchanged networths a few months back…we’re both fairly fresh out of college and we already knew each other’s salaries…our numbers were similar, and i’m glad we shared…it’s nice to be able to bounce detailed financial nerd ideas off of one another…it gives our wives a temporary reprieve.

    Reply
  • 2. Anonymous  |  October 30, 2007 at 1:52 PM

    I’ve been consciously trying to be more open about money over the past couple of years.

    I grew up in a household where my parents really wanted to be more open with us about finances (they both regretted that their parents hadn’t been) but it was really hard for them, and I still don’t know a lot about their situation. I picked up a lot of their habits and views on when it is “appropriate” to discuss such a topic.

    Since then, however, I’ve gradually realized how much harm can come from such a pattern – on the few occasions where I first broke through and brought up topics with friends like “do you have retirement savings already?” or “do you pay of your credit card bill every month?” I was shocked at some of the answers – friends I had assumed were in nearly exactly the same place as I were doing very, very different things – and in almost every case, we were all just basically copying what our parents had done.

    Now, I think of this as almost a political issue – it’s frustrating that my friends and I all worked hard to make it to the educational and professional levels we’re now in, only to be re-sorted financially by the habits of our parents. I feel like the tendency for middle class people in particular not to discuss money is one of the things that keeps class lines entrenched.

    But, it can be hard to break through this pattern, too – even when I want to, I’m very, very ginger about ever putting someone in a situation where there’s much potential for a direct comparison of resources. I still try to talk mostly in terms of abstractions (eg, I’ll talk about having an IRA and why I picked a Roth, but I won’t say how much is in it!). And I still let a lot of things go, even when they worry me….

    Reply
  • 3. ashley  |  October 30, 2007 at 7:00 PM

    I talk about my money issues with all of my friends and my parents. In fact, it was after I started talking about my plan to get out of all my debt (all student loans except about 2k left on a car) they started focusing on their credit card debt. And actually, they just got rid of it recently and called to tell me so!

    As for my friends I’m the “financial guru” and they’ll often ask me about car purchases and such. They all know (or at least have some idea) how much student loan debt I have. They don’t all tell me their whole financial picture, but I think they know they can talk about it with me if they need to.

    I guess money just isn’t awkward for me.

    Reply
  • 4. One Frugal Girl  |  October 31, 2007 at 1:43 AM

    One thing to keep in mind if you do discuss finances is that everyone makes different choices in their lives. Some of my friends and family members have settled down earlier in life to marry and have children. There money has been spent on various activities related to their families.

    Although they don’t have as much money in the bank as my husband and I, their lives are certainly no less rich, in fact in some ways they may be much richer. You certainly don’t want to ‘compare resources’ as the second anonymous commenter said, even dollar for dollar the comparisons surely can’t be equal.

    Reply
  • 5. dong  |  October 31, 2007 at 6:17 PM

    I was open before my blog, and I continue to open after it. Most of my friends are pretty open with everything. While I think discussing salary with coworkers is taboo, I think amongst friends there’s no reason not to discuss. I mean they’re your friends and help you make better informed decisions.

    I also find that it’s somewhat broken down along gender lines. I’m a guy and most of my friends are guy and we’re pretty open. While my gf and her friends seems less apt to discuss salary and the details of purchases. It could just be my friends too.

    Reply
  • 6. Living Off Dividends  |  November 1, 2007 at 3:27 AM

    One of my friends just hired me to be his financial consultant.

    I’ll be looking at his entire portfolio of investments and bank accounts and suggest ways to optimize it it.

    He gets to opimitise his investments and I get some extra income!

    Reply
  • 7. Girl in the Know  |  November 1, 2007 at 5:21 AM

    I must admit that I am not open about sharing my financial information. I have had to do some soul searching and analyzing to understand why this is. I am my own worse critic. I feel that I should be in a better place financially than I am currently, and so I think others would feel the same way if I was to tell them my situation. Also most of my friends are not open about how much they make so I figure why broach the subject.

    However, since I work in a small company everybody knows what everybody makes. I also have two financial confidants who not only know how much I make down to the last dime but also how much debt i have. I have found it extremely helpful to have people, who’s opinion you value because you know they are being honest, who you can bounce off ideas. We can’t go it alone.

    Reply
  • 8. YeaYuh  |  November 1, 2007 at 10:03 PM

    I talk to my parents about money all the time but they were very open with me about money when I was young.

    Mom/Step-dad work on the envelope system so my step-dad would always show me the budget and how things worked. They didn’t even have a debit card until last year.

    Dad/Step-mom taught me alot about investing and getting me started on 401k and roth.

    Among my friends (most of them are co-workers) we don’t talk specifics, however if someone did ask me I would fell comfortable talking about it.

    Reply
  • 9. Jerry  |  November 2, 2007 at 2:09 PM

    Interesting post. For me, there are different levels of comfort in discussing different financial topics. I don’t talk salary with people, for some reason it seems rude to me (maybe my parents were like this? I dunno, it will lead to some introspection, anyway…). I have no problem discussing business costs and the like with my close friends, but would not think to broach the topic with casual acquaintances. Also, I will certainly talk about insurance issues or taxes with people, if only to have someone to share the misery!
    Jerry
    http://www.leads4insurance.com

    Reply
  • 10. One Frugal Girl  |  November 2, 2007 at 2:45 PM

    Thanks for all the great comments. I wonder how much of a role age plays in talking openly about your finances. In my experience there definitely seem to be generational gaps.

    Salaries are a tricky one. Although I’ve mentioned it in this blog in the past, I do try to refrain from the discussion. I think people base too much emphasis on their salaries, and if you’ve read the Millionaire Next Door you know you can save a whole lot of money on a very tiny salary if you’re disciplined enough to do it. So to me the salary discussion doesn’t buy you much in terms of knowledge or understanding. If it does come up I prefer steering the conversation toward general financial topics that can broaden your mind and your portfolio.

    I did write a post awhile back on how to answer the age old… how much do you make question… you can check it out here.

    Reply

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