Listen now: Why having open conversations about money with your parents may be critical to help avoid misunderstanding and protect them as they age.
|Investment and Insurance Products are:
Hey, humans, I’m Michael Liersch, and this is the About Money Podcast, presented by Wells Fargo. I’m a behavioral scientist who loves openly discussing money to help humans better understand their money behaviors. By understanding our money behaviors, we all have the opportunity to make better money decisions.
We’re gonna have a lot of fun together, and start our first season with money taboos. For many of us, money was and still is a taboo topic to openly discuss. The question is why? We’re gonna address those taboos head on and break through money silence. So we can all get closer to our money goals.
In this episode, we’re gonna ask ourselves how do I have the money talk with my parents? What’s interesting about this question is that after I present at a conference or at a client event, I often have a line of people to ask questions about kicking off money conversations. And in that line I look at the age of people and oftentimes it’s younger people in the line, which I always find inspiring because that means that younger people want to talk about money. But the question always is who do they want to talk about money with? And what we find in that line as people are asking me questions is those younger people want to talk about money with their parents. Which gets to some interesting research that I’ll share with you quickly before getting to the bottom line.
When parents are asked where kids get their money information, oftentimes they’ll say school. My kids learn it in college, in elementary school. Wherever it is. When you go to the kids and you say where do you learn about money? The kids say why I learn it from my parents by watching them, by observing their behaviors. So there’s a bit of a disconnect there. And what I think that reveals is while parents are relying on schools to teach their kids about money, kids are really relying on their parents to help them learn about money, in particular how to have money conversations.
So I really want you to think about that, because those people in the line talking to me about kicking off those money conversations, they’re in their 30s; they’re in their 40s, they’re in their 50s. And the parents they’re talking about are human beings that they really care about that they have rarely or never had a money conversation with. So I hope you’re a bit curious, because the bottom line here is they want to know whether their parents are okay financially speaking, because they literally have no information about how much their parents made. How much money their parents have. And frankly, whether their parents are going to have enough to live a good life.
So what they’re really asking me is how do I kick off a conversation with my parents to understand if I should be worried? Because I have no information about whether I should be helping them or not. And I want you to think about this in a family dynamic. That can be a really concerning – in fact, sometimes scary thing for a child to feel. Are my parents gonna be okay? Are they gonna have enough to serve their healthcare needs? To live the life that they’ve worked so hard for? And ultimately that they provided me with as a child, whether it’s education, whether it’s that down payment for an apartment, a house, whether it’s just even that emotional support. That human being has helped made me who I am today and I want to help them.
The fact of the matter is if you’re thinking about how you want to talk to your parents about money is that that desire is real, because there are actually real risks to money silence between you and your parents.
And for those parents listening, there are real risks for you not having those conversations with your children, because research suggests that that money silence can lead to, for example, people taking advantage of you as a parent. So as an older person it can lead to financial fraud. Think of things like cognitive decline, and within that environment, are you as a parent making decisions in your best interest? Do you need help from someone else?
Your kids can also help you in a lot of other ways. They can help be that benchmark to say am I making decisions that are gonna make me solvent in my own financial life? Oftentimes children know things that we don’t know. Times are changing. New information is available. There’s a lot of new technology. A lot of new tools to manage finances, wealth. A lot of new actual products and solutions that do that too. So kids, children, especially adult children can be an enormously valuable information source to productively manage your finances. So it is really a real risk to not have that dialogue. So again, if you’re a younger person, the bottom line is that the risk is real. That money silence is real.
And I know for those younger people listening who want to open up this dialogue, one of the big concerns that I hear is – and you may relate to this – is that you may not want to bring up the conversation because you’re afraid that if you do it’s gonna make it look like you’re somehow interested in your parents’ money, either receiving it or controlling it.
And while that may not be of interest to you or at the top of your mind, empathizing with your parents, you could see how that could be perceived that way. So oftentimes that leads to that money silence. And so when you think about how to approach a dialogue so it doesn’t feel like that you as a child are looking to control or receive your parents’ money, I want you to take action or think about taking action in the following way.
The first thing I want you to consider in terms of that action is to approach your parents with positive intent and make that very clear, especially if you’re concerned about their financial situation. And the key thing in that approach is to highlight that you are there to help them should anything happen to them and that it’s less about money and it’s more about you being able to support them in the context of decision-making. In the context of if they’re not able to make decisions in their best interest, you want to be there to help. So really taking on that mindset, broaching the conversation in that way can oftentimes open up the dialogue rather than close it.
A second action I want you to consider taking, especially for those with either a partner or a spouse, or with a sibling, is to not do it alone. So call your siblings. Ask them: Are you concerned with our parents and their financial situation like I am? Do you want to make sure that everything’s okay with them so that we offer them the support and the help that they need? And get your siblings’ read on it. Perhaps your siblings actually know more information than you do. And then you can share that information about how you-you can best approach your parents and then ultimately if you’re all concerned, or you all feel the need to do so, you can do it together rather than individually. Which can oftentimes be more powerful, and highlight to your parents that there really is a need to communicate.
The third thing I’d really encourage you to do within this framework is to focus your questioning in terms of that conversation on the following topic, which is: Should anything happen to you, what would happen next? And what you’re trying to figure out there is what if anything can I do to support your intentions, your wishes when it comes to your wealth and your money? Because ultimately the message could be that you want to help support those intentions and wishes in the most deliberate productive way possible. And without that information that’s very difficult to do and to accomplish.
What we hear actually a lot – and-and this is for parents as well who are listening – from children who have something happen to a parent, either temporarily or the parent passes without any communication, they literally don’t know what to do. They don’t know what their wealth or money was for, why the will or the estate plan was constructed in the way it was, and that can be really a tough time and circumstance to try to figure it all out. So approaching the conversation in that way can maybe lead to a much more productive dialogue.
In fact, we have recent research that suggests that nearly two-thirds of parents understand that they’ve never talked to their families about their intentions for their wealth. Especially when it comes to their wealth plan, their estate plan and their will. So again, it’s normal. It’s not uncommon not to have had these conversations. So being uncomfortable, being concerned, and wanting to know how to have this money talk with parents is completely, completely normal. It happens all the time.
So all that we’re trying to do is give you some thoughts, some perspectives on how you might approach that conversation in a productive and empowering way for you, for the people you care about. And especially in the best interest of your parents, so you can help support their intentions and their wishes for their money. With that, I wish you the best of luck in your dialogue as a family.
That was it for this episode of the About Money Podcast. Please email us with ideas or topics that you’d like us to address at AboutMoney@wellsfargo.com. If you really liked the episode, share it with your family, friends, or anyone who listens to podcasts. Wells Fargo About Money is produced by Wells Fargo. I’m Michael Liersch asking you to talk about money today.
This information is provided for educational and illustrative purposes only.
|Investment and Insurance Products are:
Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company.
The Private Bank is an experience level for qualifying clients of WIM. Bank products and services are available through Wells Fargo Bank, N.A., Member FDIC.
Brokerage products and services are offered through Wells Fargo Advisors, a trade name used by Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and nonbank affiliates of Wells Fargo & Company.
Wells Fargo Bank, N.A. offers various advisory and fiduciary products and services, including discretionary portfolio management. Wells Fargo affiliates, including Financial Advisors of Wells Fargo Advisors, a separate nonbank affiliate, may be paid an ongoing or one-time referral fee in relation to clients referred to the bank. The bank is responsible for the day-to-day management of the account and for providing investment advice, investment management services, and wealth management services to clients. The role of the Financial Advisor with respect to bank products and services is limited to referral and relationship management services.
© 2021 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801 Equal Housing Lender.