How much do you have in savings? How are you planning for retirement? What types of insurance do you have?
These are probably not the questions you bring up at the dinner table or a cocktail party. Americans are rarely comfortable talking frankly about money—and that should change.
For too long, people have suffered financially because they’re not having these difficult, sometimes awkward, conversations. Many are left figuring out their finances on their own, often quietly, without the support or collective knowledge of people they love. Having open and honest conversations about how they’re paying for things like housing, education, and health care—or simply sharing anecdotes about how to handle certain financial situations—can go a long way in helping people navigate their financial lives.
It’s time to leave behind an outdated cultural taboo that holds people back from economic peace of mind: 2020 should be the year Americans remove the barriers and start having transparent discussions about finances.
These conversations can be vital for those making first-time, life-changing financial decisions. Buying your first home, upgrading to a new car, or growing your family should be an exciting time, but these moments are often shrouded in stress as people struggle to plan effectively. According to a Motley Fool study, about eight in 10 Americans felt uncomfortable discussing both home loan debt and auto loan debt at the dinner table. Without being able to turn to those closest to them, Americans step into these major life milestones or large purchases unprepared, confused, and uncertain how everything fits together.
Many are also missing out on their full earning potential because they are not having conversations with their employer. According to a Glassdoor survey, 69% of employed adults “wish they had a better understanding of what fair pay is for their position and skillset at their company and in their local market.” Another recent study by Glassdoor found that 40% of job seekers did not negotiate their salaries in their current or most recent job.
When approaching salary negotiations in the interview process or a current position, it’s important to have this conversation with the appropriate person, such as a recruiter or direct manager. When preparing for salary discussions, people can set themselves up for success by conducting research on their role to understand its salary range. A scheduled review should provide a setting to discuss accomplishments, professional development plans, and compensation.
Don’t be afraid to talk about your financial stressors with those closest to you. You may already talk to family about other worries such as health, kids, or your home. Your finances shouldn’t be off the table. Conversations can start simple, such as chatting about personal experience or trading advice. Eventually, discussions should become more concrete and include interconnected familial finances.
These conversations today may deepen bonds and strengthen relationships down the road. Many people in today’s sandwich generation—those caring for both children and aging parents—are especially underprepared for helping their parents live out their desired future. Ask your elder loved ones about their short- and long-term goals and about the plans they’ve made for a sudden disability, a long-term care diagnosis, or another important life event. Make sure you understand the kind of role they hope you’ll play. Our population is living longer, making caregiving a reality for many families.
After you talk with family and friends, tap into another resource: a professional who can advise you. (I’m the head of a company that offers financial planning products and services.) Just as you seek out a doctor for medical advice, getting expert insight for your financial health is critical. It’s never too early—or late—to get started, no matter what your age, financial situation, or goals may be.
Financial planning is about more than positioning yourself for eventual financial success. It’s really about being financially secure today so you can live life to the fullest now. By discussing finances and asking difficult questions, Americans will be empowered and better prepared to make the right choices to live the life they want, rather than leaving life to chance.
John Schlifske is chairman, president, and CEO of Northwestern Mutual and a member of the company’s board of trustees.
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