Six reasons why talking about money matters

Some say money is the last taboo. When we asked people how they felt about discussing money, just one fifth said they’d feel comfortable talking to a friend about their bank balance. People were far happier discussing just about anything else: mental and physical health, weight, age, sex life and political beliefs, according to the findings, which we published in 2018.

Today, being open about money is more important than ever, especially with everything that businesses and individuals have faced this year. It may help reduce stress around your finances. It can also help you build stronger personal relationships and make better financial decisions.

1. Support your mental wellbeing

“Money is part of everyday life but when we don’t speak about it, we turn money into this mystery,” says Timi Merriman-Johnson, founder of financial education platform Mr MoneyJar. “If you keep everything to yourself, that can start a vicious spiral downwards. Financial issues cause mental health problems and mental health problems cause financial issues.”

Timi, 30, started Mr MoneyJar to combat financial jargon, drawing on his experience in Financial PR and communications. “People in my generation were being shut out of money conversations,” he says. “I saw people going to university not understanding student loans and then worrying about them. If we felt able to talk about it, we’d realise that a student ‘loan’, functions more like a 9% ‘tax’ for people earning over a certain threshold. I thought this lack of financial understanding was a problem worth solving.”

Sade Taiwo also started her financial information platform The Penny Pal to help young people and millennials learn about money management. Of course, talking about money is important for all generations - whatever age you are, conversations about money can make it feel more manageable.

“The simple act of talking about money can increase awareness and understanding of money matters, which could be the difference between someone staying in debt and someone getting out of debt,” says Sade, 25. “With the FCA stating that 12 million people are struggling with bills or debt… there really is no better time than now to open up these conversations.”

Remember that if you don’t feel able to talk to a friend or partner about debt or financial difficulties, you can always speak to StepChange or Money Advice Service.

2. Learn from your friends

One of the best things about discussing money with friends is the amount you can learn from them. The more you know, the better financial decisions you can make. “Before starting Mr MoneyJar, I was the friend always recommending this app or that deal,” says Timi. “Now, I spend most of my time listening. My friends and family have inspired some of my best posts.”

To start the money conversation, certified financial advisor Julie Flynn recommends asking friends about buying Christmas presents or why they prefer paying for their own coffee, rather than splitting the bill evenly. “Slot it into something that feels natural,” says Julie, 46. “Everyone’s financial circumstances will have been impacted by the coronavirus and it’s important to talk things through.”

Talking to a friend about money can also give you a more realistic picture of who they are. “Very few people, myself included, are perfect with money,” Timi says. “If we talked about it more, we would realise that the person we thought was really good with money went on the odd Amazon binge, or the person you thought earned loads more than you didn’t make as much as you thought.”

3. Strengthen personal relationships

Julie has lots of advice on starting conversations about money, especially when it comes to relationships: “My first tip is to acknowledge that the conversation is awkward. Pick the right time and the right place - make sure that you’re both relaxed and neither of you are feeling defensive - and start by sharing your first memories of money. Then ask more practical questions: How do you feel about giving to charity or helping out friends and family? How do you feel about debt? What lifestyle do you want to have in five years?”

She adds: “The longer you leave an assumption or expectation around money, the stronger it becomes. And the more you feel you’ve got no power to change it, which can sow seeds of resentment further down the line.”

4. Exchange key lessons with your children

Julie learns a lot about money from the women she supports through her financial planning business, Ebb & Flow. She also learns from conversations with her son. “If you ask, ‘what do you think about money?’ whatever they come back with is usually a reflection of your own behaviour, which can be an eye opener,” she says. “As parents, we pass habits on to our kids. Listen to what they say and recognise when you need to change your own relationship with money - doing that can end up helping your kids.”

Earlier this year we launched Kite, a debit card for children. Kite is a great way to help prompt conversations about money between adults and kids. Every time your child spends money, the adult receives a notification. By making money more transparent in families, we hope to encourage conversations about money and promote learning.

5. Help fight unequal pay

Talking about money can lead to change both on a personal level and in wider society. “We have a gender pay gap and an ethnicity pay gap partly because people don’t talk about how much they earn, even though the 2010 Equality Act says that you can legally discuss your salaries with your colleagues,” says Timi.

If you never discuss what you earn - either as an employee or as a freelancer - you’ll never know if your salary or rate is fair or equal. “Years of tradition and taboo can create a sense of fear around conversations about salaries,” says Sade. “But change and destruction (for the better) is not something that scares me. I believe that politeness can be dangerous - organisations can get away with not paying people their worth - and that pay transparency would benefit the masses.”

Sade discovered a discrepancy in her own salary at a previous job after a conversation with a colleague. “If you find yourself in this situation, look at it from an outsider’s perspective: Does your colleague have the same experience as you? Are they more proactive? Do they have additional qualifications? Do they track their progress and achievements better? If the answers are ‘no’ to most of these questions then you probably have the grounds to ask for a pay rise,” she says.

“If the answers to those questions are ‘yes’ then it might be time to ask yourself how you can become a more valuable employee. Once you have the evidence to back yourself up - you can approach your manager for a pay rise.”

Timi adds: “Treat your colleague’s transparency on their salary as a positive thing. They have helped you to highlight a discrepancy, which you can raise with your employer. Remember to give the situation the benefit of the doubt - your colleague may have negotiated that little bit more at interview, or received a salary based upon their previous job’s pay.”

“Either way, raise the issue with your employer. And if you then find that a resolution isn’t possible and feel you are dealing with a genuine pay discrimination, speak to the Acas advice service, who provide free and impartial advice on workplace relations and employment law.”

6. Value yourself differently

Timi, Julie and Sade all see a connection between self-worth and financial honesty. “The day we demystify money is the day we began to value people based on the people we help and the things we create, not the amount in our bank accounts,” says Timi. He set up his Starling business account last year. He chose Starling on account of our Financial Services Compensation Scheme (FSCS) protection and easy sign up.

Julie also banks with Starling, both for personal and business banking. She adds: “Really delving into my own relationship with money made me realise that I didn’t value myself. But recognising that has led to my big transformation of the year - it’s made my life better, my family’s life better and helped me be more open and vulnerable with my clients. As I’m a financial expert, they often think I have everything under control. But… I still have lots to learn.”

All three are on a mission to improve financial confidence, partly by increasing financial knowledge. Sade says: “The more knowledge you have about money the more confident you become.”

To learn more about how money works, have a look at our Money Explained series, where we cover topics such as the pros and cons of pocket money and weighing up needs vs wants.