Updated on 01.29.07

Financial Independence Week: Talking With Parents About Money

Trent Hamm

Earlier today, I discussed methods for parents of young adults to talk to their children about money. Now, I’m going to tackle the opposite direction: how can a young adult (a college student or a young professional) discuss financial matters with their parents?

Many college students dread talking to their parents, mostly because they believe they’ll be perceived as failures and let their parents down. Thus, when a major talk comes, they go in with a combative attitude and things don’t go very smoothly at all. It’s a scenario I’ve seen repeat itself time and time again, and it’s one that is easily avoidable.

Here are several things that you can focus on in order to make a financial discussion with your parents go much easier.

Don’t be angry. Quite often, parents will make statements and suggestions that provoke a sense of anger in the child, even if that’s not their intention. If you find yourself getting angry during this talk, look like you’re thinking, count to ten, and then ask yourself why exactly you got angry. Usually, it’s defensiveness, so ask yourself what you’re defending and why. In many cases, you’re defending a paper castle, something that you’d be better off revealing than hiding.

If their attitude makes you uncomfortable, ask questions. If they appear superior and condescending, ask them calmly if they’ve ever been in an awkward money situation before and how they dealt with it. Ask them how they would deal with your situation given that the past can’t be changed. Do it calmly and rationally above all, because anger is the one element that will cause this conversation to collapse.

Be completely open. If you are hiding things, you will only make things worse. Your life doesn’t have to be an open book, but if something is relevant to the topic, be open about it rather than hiding it. Not only will this answer more of your questions, it will encourage your parents to be more open as well.

Don’t be combative. Don’t enter into a financial conversation perceiving it to be a war, with ground gained and lost. Instead, look at it as a situation to personally improve yourself. The only way people win in conversation is if they gain a greater understanding of the issues discussed, not if they “win” or “lose.” Thus, quite often there’s nothing to argue or feel resentment about.

Ask lots of questions. The most valuable thing you can gain from a conversation is a resolution to the questions inside of you, so ask every question that comes to mind. Not only will you receive answers, giving others the chance to talk and say what’s on their mind will make them more calm and collected as well.

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  1. r says:

    This post was interesting – in part because it was not at all what I was expecting!

    As a young professional, I worry about how to properly talk to my parents about money – but, I think, not for quite the reasons you’re discussing here. I worry that my family isn’t always very open about money, and that I have trouble knowing just what financial position my parents are themselves in – and, as a consequence, I have trouble knowing what to expect in the future in terms of what resources I should plan to be able to provide for them should they need them. My parents have given me significant advantages in terms of education and life skills, and I want to make sure I’m in a position to help them should they ever need it. But, how do I find out what their situation really is and what they might need (and when) without seeming prying, or condescending myself?

  2. Trent Hamm Trent says:

    R, that’s an excellent question, and I should point out that you are the exception rather than the norm in our generation. Your best bet is to preface the whole thing with love. Tell your parents honestly that you love them very much and you want to be sure that they’re in good financial shape for the rest of their lives. I had a similar talk with my own parents not too long ago, and this technique made them calmly open up much easier than I ever would have believed.

  3. Mission Debt Freedom says:

    My parents have always been a financial wreck waiting to happen. I tried to talk to them a while back over a cup of coffee and they told me that all these fads like “Dave Ramsey” and the other extremists were just that…extreme. “Everyone has a car payment, everyone uses credit cards…it’s just part of life.”

    Hard to convince someone otherwise when their mind is that made up!

  4. Angela says:

    I would add, if you’re discussing your own poor financial situation, it probably helps to have an overall goal in mind. Not what you want them to do for you, but where you want to be, and then explain that to them.

    Also, resist the temptation to let them micro-manage your finances. In the long run it will make things worse.

  5. Clever Dude says:

    My parents have been coming to me more for financial advice recently, but more for my Gram’s sake. My gram has so much debt, and my parents are going to need my help figuring it all out when God comes calling for my gram.

    Also, I think my parents realize I’m getting my own life in order and it’s provoking them to make steps in their own. It’s quite satisfying to be a silent influence on your own parents.

  6. Jeff from LA says:

    Interestingly enough, like the other posters, my problem is the opposite of the one you pose. My parents are the one whose finances I worry about. I have great credit, no credit card debt, and no loans except school loans. They on the other hand seem to have little ability to control their finances. I really wonder sometimes how I could get them to listen more to me.

  7. Serena says:

    Trent, I think you are overestimating the financial skills of our parents – generally they may have less of mortgage and “big” debt – but they may have little or no retirement savings, no pensions, rising health insurance costs, and face the realization that they may never ever get to retire.

  8. Margaret says:

    I just asked my mom if I was going to have to support her in her old age, and she did a little run down of her income sources as a senior and said no. If she weren’t so extremely competent and frugal, I might have pressed for a few more details, saying something like “I am trying to make a plan for my financial future, and I really need to know if I am going to have to help support you. Do you want me to help you figure out what your finances are going to be like in retirement, or do you have a financial planner?” And then, if they do accept help/advice, DON’T BE JUDGEMENTAL!!! That is, if they have some stupid debt, you can say hey, if you get it paid off in 3 years, this is how it will affect you, but if you take 10 years, this is how it will affect you, but it is UP TO THEM TO CHOOSE.

    Also, I HOPE my kids do better than I did financially. Your parents might not be set up to be as well off as you expect to be, but that might not bother them so much.

  9. K says:

    I am currently in a situation where I’m taking care of a parent, and thinking I will need to take care of the other parent as well. It is extra stress with me wondering what if I lose my job, and all of that while my job is quite secure. It’s not easy.

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