How do I discuss plans with my family?

Transcript:

Hey, humans. I’m Michael Liersch. This is the About Money podcast, presented by Wells Fargo. I’m a behavioral scientist with a PhD in cognitive psychology who loves openly talking about money to help humans better understand their money behaviors.

In Season 4, we’re going to get real by sharing money situations and scenarios that happen all the time to millions of us. Real stories. Relatable and usable. We’ll also be sharing valuable life hacks you can use to stay on track, or get back on track, with your finances. So let’s get into it.

In this episode, we’re going to ask ourselves, when it comes to money, how do I set up the right plans for my family? This is one that comes up all the time, and we’ve even done research about it at Wells Fargo. And in fact, what’s interesting, and for most of you listening, you may relate to this, in that research we found that some people said they would just rather put off the conversation and wait till the family members that may or may not be giving them money or may or may not be having a problem with money pass away rather than talk about it.

And so when you think about this idea of people just not wanting to talk about money at all in families, it often leads to a really challenging situation, which is when someone passes away then everyone’s surprised. They’re surprised about how the money was organized, how it was set up, who gets what and when, and you need to ask yourself, is that a fun surprise or is that a surprise that can lead to conflict.

So there’s a family I’m thinking of in particular that I was working with and they had no conversations about money in their family, and I mean none. And a parent passed away, and it was the sole living parent. And again, everyone was literally opening drawers and trying to find the will, the estate plan. No one had access to it, and it took two years to finally resolve all the money situation. Two years to get everything settled when it could have been settled in a matter of months, should they have had that money conversation and should things have been organized in a very procedural way.

The last story I want to tell you is a family that I worked with where there wasn’t a lot of money involved. It was really about things. And so this was a situation where it wasn’t parents passing away, it was a grandparent who passed away and the family all started fighting over a particular family heirloom. It was a necklace that everyone remembered the grandmother wearing, so it was really about her and it was about their memories. And they didn’t know who she wanted to give it to, who she wanted to leave it to.

And so ultimately, the family literally stopped speaking with one another because they didn’t know where that necklace was supposed to go, who it was supposed to go to. And it was really a disruptive, upsetting situation. And if it had been done in a very purposeful way with a conversation, then perhaps it could have avoided all that family disruption.

So what do you do to avoid it? Well, let’s give you a few life hacks so that you can think about what you might do in your family to get ahead of this, to really take advantage of the opportunity to have conversations in your family right now about how you’re thinking about money in your family.

So when you think about this life hack, I really want you to focus. I want you to imagine if you have parents that are still living or you have children that are, you know, that you’re really involved with. I want you to think about how you’d have that conversation. And I want you to think about why you’ve been avoiding it if you’ve been avoiding the conversation.

So the first life hack is simple. A gentleman named Daniel Kahneman, won the Nobel Prize in 2002 around this concept of behavioral finance and how much language, especially when it comes to money, matters. So this first life hack is about reframing money conversations in your mind.

A lot of people say it’s never too late to do something. It’s never too late to learn something. It’s never too late to do something. I want you to reframe it to it’s never too early. It’s never too early to get started now, especially when it comes to money conversations. And then just look around at all the things you’re delaying in your life.

Instead of saying it’s never too late, just move it to it’s never too early. And so three other hacks that I would highlight for you is first, think about the money conversation you want to have and why.

So you can write it down, you know, is it about an aging parent? Are you concerned with their financial situation? Do they feel safe to spend their money? Are they going to run out? You know what’s on your mind? What’s concerning you? Maybe you have a child. Maybe you’re concerned about their situation. Maybe they’re overspending. Maybe they’re underspending and not enjoying their life.

So write it down. What is on your mind when it comes to money about someone in your family?

The second thing I would encourage you to do is write down all the people that should be involved in that conversation. So is it a spouse or a partner? You know, is it a child? Is it a parent? Who are all the family members that should be involved in this discussion?

The last thing I would highlight for you is then just simply organize the conversation and the discussion. Set it up. It can be Zoom. It can be in-person, depending on your family circumstances and situation. Organize the conversation.

I want to highlight, perhaps you’re the one in need. Be honest about that. Be authentic. Reach out to people. Say, I need help. I need your advice. I need your guidance. And let’s talk about it. And it’s really that simple.

When we think about conversations around money and families and the stat that I provided in terms of, you know, people being more likely to wait sometimes until someone passes away to have these conversations, what also comes up is these conversations are just a real downer. I really would highlight that some families have reported back to us actually the opposite, that when they have these open conversations, it actually brings immense joy to the family, because what it does is it creates a level of openness, authenticity, vulnerability that actually come across as a gift, a gift of information, a gift of sharing what works and what doesn’t.

And it ultimately can get a family to a better place. Think about it as being a gift to you and the people you care about.

That’s it for this episode. If you really like the episode, please share it with your family and friends. If you have a topic you’d like us to address, email us at AboutMoney@wellsfargo.com. The About Money podcast is produced by Wells Fargo.

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