Part I of Girlfriend to Girlfriend Money Chat looks at some of the reasons women generally refrain from talking about personal finances with those they’re close with. Then, I share some of the internal struggles I’ve been experiencing, my vision for my girlfriends (and other women around the globe) as related to their financial confidence and sense of empowerment, and a plan of actions so that my behaviors align better with what matter to me.
In the same Money Fit Women Study I referenced to in a previous post, the survey also revealed that despite a substantial percentage of women having expressed the desire to become more engaged with their finances, many felt uncomfortable discussing money topics with their friends. Let’s take a look at the statics below:
After reading the survey results, the psychologist in me immediately got to work and started examining the dynamics within my circle of friends.
My Circle of Friends
It’s true that my friends and I rarely discuss our financial situations with each other. I’ve never thought about it this way prior to having read the survey results.
So what did my girlfriends and I typically chat about? Discussion topics usually varied from tips on styling our hair, shopping for a pair of over-the-knee boots, which dentist to go to, who to hire to remodel our kitchen, which tailor to use, how to shop for our significant others, what to wear for a first date, how to cook quinoa, which Netflix show to watch next, how to create a pivot table on Excel, what to wear with a pencil skirt, which bakery offers the best scones, and the list can go on and on. However, our conversations rarely centered around discussing personal finance topics. As most of my girlfriends are currently between the ages of 25 and 40, many of our recent discussion topics revolved around parenting, in-laws, the workplace, health and nutrition, wedding planning, baby showers, personal styles, romantic relationships, career changes, entertainments and leisure travels. We are like a team of experts on those aforementioned topics. Everyone always had something to share and we could all relate one way or another.
Were money concerns just something that didn’t come up? A 2013 Wells Fargo Financial Health Study reported that money is the biggest stress in life for 39% of Americans (survey sampled 1,004 adults, ages 25-75). In the same survey, a third of Americans said they lose sleep worrying about money and 49% expressed regrets about saving and spending in the past five years.
So why don’t we discuss our finances? During all those get-together times, I thought my friends and I didn’t hold back…or at least I thought so until I read about people’s relationships with money and started examining my own life and those around me.
It turns out that in general nearly half of Americans (44%) said the most challenging topic to discuss with others is personal finances, whereas death (38%), politics (35%), religion (32%), and personal health (20%) ranked as less difficult (source).
Sure, my girlfriends and I loved texting each other when we found double coupons or alerting each other when an item had a price reduction. Yet, we had no idea how much each of us were spending on clothes, bags and shoes each year. We’ve causally shared how much we spent on the wedding photographer, our hospital bills for labor, the amount we spend on daycare, or the price we paid for a single bag. But these numbers were readily available. Money was certainly involved, but there was nothing too personal about this kind of sharing. We recommended which CPA to use filing tax returns, but we didn’t share how much tax we owed or how much money we were getting back. We shared how much we spent going on a helicopter ride while visiting Hawaii, but we left out that we also purchased a timeshare during the trip. We shared that we own a house and a rental, but left out that we only paid 20% down payment on each and that we were still struggling to pay off over $50,000 student loans. We bragged that we didn’t have debt, and left out that we were living paycheck to paycheck. We shared that we had health insurance, but left out that we were paying over $700 to insure a family of 4 each month.
Yes, we talked about money, but we always felt hesitant and/or reluctant to fully expose our financial situations. At the same time, very few of us felt comfortable asking another person where the money was coming from or questioned motivations and reasoning behind her financial decisions. Those of us who were listening might have shared a “look” with each other by raising our eyebrows, and the topic of discussion quickly got changed.
My Internal Struggles
I, too, feel uncomfortable discussing my financial situation with my closest girlfriends. Just thinking about it gives me goosebumps. This has nothing to do with how financially savvy I am.
The Money Fit Women survey tried to shed some insights as to why women generally refrain from talking about personal finances with those they’re close with:
The first three reasons, (1) “It’s too personal”, (2) “I don’t want those I’m close with to know this information”, and (3) “It’s uncomfortable”, basically summed up explaining my hesitation. I don’t want to compete with my friends as to who is earning more than who, who has a higher net worth than who, or whose husband/boyfriend earning more than whose. I would feel very uncomfortable being involved in a conversation where friends are talking about their earnings, even if the message is supposed to be “motivational” and encouraging. Moreover, I don’t want to talk about how well (or not well) I’m doing financially. My money is my household’s business.
However, these thoughts and fears don’t align with what I want to inspire and encourage on Ms. Financial Literacy. In putting forth efforts to raise financial awareness and education among women, in hopes to promote financial literacy and empowerment, I need to take a different approach and think differently. If I want to accomplish my goals and inspire others, I need to be a leader by example. I’d have to overcome my fears of talking about money and be open and willing to share. I’d have to get vulnerable.
In thinking about the moral and physical support my girlfriends and I’ve given each other over the years, the milestones we’ve celebrated together, the heartbreaks we helped each other overcame and the countless memories we’ve created and shared together, these girls are as much my family as my husband is! When I begin to think of my friends this way, the wall of fear and silence also begins to melt. My girlfriends and I’ve been through so many ups and downs together. Why should I create a barrier between us on personal finance topics? Why should I allow these topics of discussions to feel any more vulnerable to bring up among us than our physical health concerns or having an unfaithful boyfriend or getting laid off from work? The more I think about opening up with my closest girlfriends and talking about my financial situations, the more I see the benefits of choosing to share.
Despite giving myself these self-encouraging talks, choosing to be financially naked with my girlfriends is still a big leap. When I voiced my concerns with Mr. FL, he suggested I take a similar approach that men typically do when discussing financial topics. Mr. FL gave the example of him and his colleagues. It has always been natural for him to bring up 401k discussions with his colleagues. He would find out what kind of stocks/funds his colleagues are invested in, what percentage they allocated their contributions to each, and ask why. From there, it would be easy to transition to discussions on the stock market and investing in general. Within this short amount of time, Mr. FL would be able to get a good feel which colleague has more experiences in the stock market, who is more enthusiastic talking about investing, and etc. During this process, Mr. FL would also get a good feel of his colleagues’ investment knowledge, investment strategies and investment styles. Once this rapport is formed, follow up conversations on financial topics with certain colleagues would become even more natural. As Mr. FL pointed out to me, the key is to find a common ground. In his case, all his colleagues have access to the same 401k through their shared employer.
So how can I apply Mr. FL’s example to my circle of friends? All my friends have jobs that come with a compensation package. I can share with them (1) the resources I used to help me understand my compensations, (2) my salary negotiation experiences, (3) how much I set aside for FSA and (4) how much disability insurance I purchased through work and the resources I used to help me arrive at that number.
Sharing information about the compensation package is personal, yet not too personal at the same time. I feel this is a safe start. There’re so many opportunities for financial teaching and learning. And the compensation package should be a big part of our financial planning. It affects our short- and long-term income, our medical and/or childcare savings and our asset protection (in terms of disability insurance, that’s our human capital). During the sharing process, in addition to learning about what to do with what’s available to us through work, my friends and I can also learn about what is possible (e.g., I should work for an employer that offers me paid family leave).
Encouraging and supporting financial literacy among women is something I’m very passionate about at this point in my life, and I need to let my girlfriends know what matters to me. In the process, I hope to inspire and encourage my friends to pursue financial literacy, too. I want them to feel empowered!
When women were asked what would motivate them to become encouraged in their finances within the next 12 months, 27% reported that they wanted to talk with others who have made similar decisions, 25% wanted to be invited to an event with friends where they could learn more about finances, and 13% reported wanting to talk about money with friends.
In general, women actually want to have girlfriend to girlfriend money talks and/or learn about financial topics with their girlfriends. These statistics give me hope!
My Vision for Women
I can’t help but think about the hundreds of thousands of other “circles of girlfriends” around the globe. What would happen when there’s a leader in each of those circles leading discussions on personal finance and financial literacy? How powerful can this get? The circle of friends can be very small. I suggest we first experiment this with our closest friends. For me, there’re 6 of us.
Readers, will you join me on this mission?
If you’re already financially savvy, help your friends. If you’re not so financially confident, ask a question. Either way, you can lead the way and break the wall of fear and vulnerability. Don’t let personal finance topics create a barrier between yourself and your dear friends. Our close circles of friends have profound influence on us. The sisterhood we’ve built is not something that comes easily, and that’s why they’re our best friends. Such bonding exemplifies trust, unconditional acceptance and loyalty. These girls are our confidants! Let’s get this movement started. Help yourself. Help your friends.
I will keep you updated on my journey. Along the way, I hope you’ll share yours, too.
In part II, I’ll explore and discuss additional strategies we can follow to spread financial awareness and education, and support women’s financial empowerment. Let us all pay it forward. We can all benefit and be inspired when we work to overcome our fears and make the effort to connect with our girlfriends on deeper levels. In this case, it means opening up and getting vulnerable discussing personal finance topics. Our true friends will stay and listen.
Are you open to discussing money topics with your close friends? Do you have a good strategy for bringing up money topics with your friends?
How do your friends typically react when you bring up money topics with them?