Money can be a taboo subject. It’s not always easy to talk about. That’s one of the reasons why, according to the Independent, money is the main cause of arguments between couples.

Open and honest communication is key, but it’s not just your partner you need to talk to.

Whether you’re planning your estate or opening the Bank of Mum and Dad to help a child onto the property ladder, discussing financial decisions can be invaluable.

It’s one of the main reasons why we are here – and will always be here – if you need us.

Our decades of experience make us best placed to help you make those difficult financial decisions but be sure not to cut your family out.

Candid conversations about money can make a huge difference. Here are three reasons why communication is key.

1. “Joint finances” doesn’t mean splitting everything

There is no single solution to how to organise finances as a couple.

You’ll likely have entered the relationship with different levels of savings and income and been exposed to different attitudes to money growing up. With different starting points, timescales, and ultimate goals your financial plans could be wildly different.

While this could lead to differences of opinion, as with other areas of a relationship, compromise and collaboration are called for. And that means having difficult conversations.

The Money and Pension Service confirms that people who talk about money:

• Make better, less risky decisions
• Have stronger relationships
• Feel less stressed and more in control.

Talking about money might not come naturally. Consider setting time aside to discuss your finances like you would keep time free for a date night. Be honest, especially around the most taboo financial topics, like debt, for example.

2. Death and inheritance are highly emotive

Which? reports that the number of contested wills is on the rise. One law firm saw a 111% increase in disputes in the six months to April 2021, compared to the six months previous.

The Telegraph, meanwhile, reports that more than 2,300 will disputes have been heard by the High Court in the last decade. The majority of disputes don’t make it this far, which means the number that were settled outside of court will likely be much higher.

A will is designed to make your wishes known. It gives you a sense of control over your estate. You’ll know that your loved ones are provided for and that you’ve minimised their stress at an already difficult time.

Disputing a will can cost upward of £75,000, according to Which?, but involving your family from the outset could avoid any issues.

Frank discussions explaining your wishes, and the reasons behind them, means everyone involved knows where you stand.

This could be especially important if you plan to split your wealth unevenly.

Back in February, you might have read our blog ‘Do you plan to split your estate evenly between your children on death? 45% of UK adults don’t’, in which we discussed the “sibling minefield”.

If you are planning an uneven split, you’ll no doubt have valid reasons for doing so. But make sure these are conveyed to the interested parties to avoid unnecessary unpleasantness once you are gone.

3. Discussing your options can lead to better decision-making

A recent report published by Morningstar confirmed the important part family and friends can play, specifically regarding investment decisions.

Morningstar suggests that more than half (58%) of 18- to 29-year-olds go to family and friends for investment advice. With investment scams on the rise and the influence of social media increasing, this is good news.

Last year, the Independent reported that 10% of investors get their investment “advice” from social media while 20% of those under-35 saw social media as their most important source of information. This is despite Action Fraud confirming that victims lost a massive £63 million to investment fraud via social media in 2020.

Talking to your children about money from a young age can help to instil good habits that can last a lifetime. Understanding the key concepts of investment is vital if they are to invest successfully.

If you plan to open the Bank of Mum and Dad to help your children through higher education or onto the property ladder, you’ll want to know the money you hand over is in safe hands. That starts with good communication and an openness to discuss difficult topics.

Get in touch

Talking about money isn’t always easy, but our Chartered Financial Planners have decades of experience in doing just that. We also have the expertise to help you make the right financial decisions for you, whatever your long-term goals.

If you have questions or anything you’d like to discuss, please get in touch and speak to us today.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.