Why It Matters To Have Conversations About Money With Friends

Two female friends talking at a coffee shop.
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There is a promising trend emerging where people are starting to speak up about money. In an economy marked by inflation and where women hold nearly two-thirds of the outstanding U.S. student loan debt, friends are discussing shared financial expectations with one another.

Read More: 10 Tips To Talk to Your Significant Other About Money
And Related: How to Start Turning Around Your Finances in a Week

It can be a bit intimidating to talk to your friends about money. However, if you use a thoughtful approach there’s an incredible opportunity to share experiences with one another where you can learn what to do and what not to do.

Why Do Money Conversations With Friends Matter?

The media bombards us with messages about money. Money is connected to power and desirability. We learn from these messages that we need to compare ourselves to others. As a result, we often wind up experiencing feelings of inadequacy, fear or self-loathing. Or, it can go in the reverse direction with feelings of superiority and entitlement.

Building Wealth

Who stands to “win” when we have feelings like these, especially when we are among trusted friends?

Sandi Bragar, chief client officer at Aspiriant, said to reframe money conversations with productivity in mind. What can you learn from your friends about money? In return, what lessons can they share regarding finances?

“When talking about money, especially with friends, we can share and unpack the lessons we’ve learned directly and indirectly about our money attitudes and behaviors, which play into our relationship with money,” Bragar said. “We can learn from each other’s experiences, which increases our confidence and allows us to find our money mojo.”

Learn: If You Can’t Pay Off All Your Bills, Which Should You Pay First?

Tips for Talking to Friends About Money

Everyone stands to benefit when we have productive money conversations. Use these strategies to start a discussion with friends.

Start Slow

Don’t push a friend to start sharing too many details or ask intrusive questions. Take a slow approach where you focus on building a supportive, natural and safe foundation.

Building Wealth

“Create a strong foundation that serves as a safe environment for ongoing money conversations, and then build on that foundation, over time, as you establish the trust and understanding needed for deeper and more meaningful money discussions,” Bragar said.

Create a Relaxing Environment

Don’t have your first money conservation in a noisy, crowded space. Bragar said to create a relaxing environment that is the most conducive, comfortable and distraction-free for discussion. You might meet in one another’s living room or head out on a hiking trail together. 

Make Sure Your Friend Is Comfortable

You may want to talk about money with your friends, but there’s always a chance they might not be comfortable about having this kind of discussion. Bragar said you may consider providing some context for the discussion or ask their permission to talk about money in advance.

Building Wealth

Be Honest

Once you provide some context, open up with your friends and speak from a place of honesty. 

Lorna Kapusta, head of women investors and customer engagement at Fidelity Investments, said that you don’t need to disclose every detail about your personal finances in this conversation. However, you should be open about what you are willing to discuss and talk about it in a way that is genuine and helpful to the conversation.

While you and your friends don’t need to see eye-to-eye on every financial topic, Kapusta said that doesn’t necessarily mean you should keep quiet if you have concerns.

“Whether it’s something that your friend shared or something that you have had on your mind, finding an appropriate way to raise those concerns could help serve you and your friend better in the long run – and not leave you or your friend feeling upset at the end of the conversation,” Kapusta said.

Find Out: 7 Fastest Ways To Save $20K, According To Experts

Why Financial Transparency Helps Us Advocate for Our Worth

Kapusta said that having productive money conversations is key to helping clear up misconceptions, providing new opportunities for you to learn about managing your finances and building confidence around your own financial picture. 

A productive money conversation allows us to keep expanding our knowledge and overall benchmark understanding of finance, particularly for topics like earnings and negotiating. 

“When it comes to income specifically, these conversations can be an eye opener to what is possible and what you may be leaving out on the table,” Kapusta said. “Women in particular are ready to take action when it comes to their finances – with nine in 10 women planning to take steps within the next 12 months to help their money work harder. That could be a spark to lead you to have that conversation with your manager or make that job change you might have been thinking about.”

Bobbi Rebell, CFP and personal finance expert at Tally, said a supportive circle that holds you accountable to your financial goals can be a powerful asset. Good friends will set each other up to win, not fail. 

“Good friends will build up each other’s self-worth and encourage each other to strive for what they think they deserve,” Bragar said. “The road to clarity begins with creating more opportunities to talk about money with others. These conversations allow us to develop thoughtful vocabulary as well as approaches that lead to natural, non-judgmental and productive personal financial discussions.”

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About the Author

Heather Taylor is a senior finance writer for GOBankingRates. She is also the head writer and brand mascot enthusiast for PopIcon, Advertising Week’s blog dedicated to brand mascots. She has been published on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global, and more media outlets. 

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