Talking about money with family members can be an awkward conversation. But to achieve a strong Return on Relationships, it helps to be open and transparent when discussing finances.
For couples, it starts with household spending. When spouses aren’t aware of what the other spouse is spending, tensions can arise. Maintaining a high level of transparency eases concerns about potential financial mismanagement. Start by creating a budget. By reviewing household income expenditures together, spouses can develop a strategy on how much income to allocate towards expenses, retirement contributions and discretionary savings.
If you’d like to provide financial assistance to family members, be clear in your intentions. An outright gift is different than a loan, so be sure your expectations are clear. Like a flight attendant will tell you: in an emergency, help yourself before helping others. If you loan money to a friend or family member with the expectation that you’ll get the money back, ask yourself if you can afford to live without the money. If you need loan payments to sustain your financial plan, it can cause large amounts of stress to all parties involved, especially if the borrower is unable to pay you back.