In reading a post today over at Prime Time Money, I began to think about this question; “Do you talk to your extended family about money? Is it a good thing to share your financial situation with others, and if you do, what complications does it bring up?
My wife and I have been very candid with my in-laws about our money situation. My mother and father in-law are wonderful people, and I completely trust their discretion on the matter of our finances. I also value their advice and input as they've been very successful in business and have given us a lot of insight that has been very useful to us.
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Being Open About Money
My wife is their only daughter and they have always wanted to know that she is “well taken care of”. There have been a few occasions that they've helped us out financially, the biggest one of them being when we bought our first house. At the time we weren't yet married (and were living separately), and my wife was buying a townhouse that we would move into once we were married. They helped her out with a down payment on the home, and told her that she would not have to pay them back. This gave us a huge step-up as a young married couple, and we could not have been more thankful.
Downsides To Sharing About Money
We have been very blessed to have such generous parents helping us with our finances, but there have also been the downsides of sharing our financial situation with them.
A Change In The Relationship
Because they have helped us financially, and because we've accepted their help, we feel indebted to them. We feel that we can never say no to them when it comes to small requests like coming over to give them computer help, coming over for dinner, or going on vacation with them. If we do say no, we feel always feel a little guilty.
Expectations Of Openness At All Times
They also expect us to always be very open about our finances, even when I don't really feel comfortable sharing. Because they've helped us a couple of times, now they're always asking us if we need help, even when we don't. It can be tempting to take them up on their offers of help, even when we don't really need it and could do it on our own.
Competition Between Family Members
When dealing with family, I also think finances can become a bit of a competition. My wife's family are all very successful, and because of that I think that sometimes it can get into a bit of the “who's more successful than who” game. I tend to shy away from sharing with those competitive family members because I don't want to get into the comparison game and start hearing the “if you did this you could be as successful as me” monologues.
My wife and I are doing pretty well for ourselves, we have no debt beyond our mortgage, and we've been able to save a nice emergency fund and some retirement savings. Still, unless you're making at least six figures, some people will always think you're struggling to get by.
With that said, here are some pros and cons of sharing about money that I've found in my own family:
Pros To Sharing About Money
1. Sharing with family about money can bring some good advice.
2. Sometimes family can help you out of a bad money situation.
3. Good to be open with your loved ones.
4. Others in family might be able to learn from your money decisions.
Cons To Sharing About Money
1. Once you start sharing about finances, it can become expected, even when you don't want to.
2. People will start the comparison games and people can be judged by how much they make.
3. People you've shared with will sometimes tell others about your finances, even when you don't want them to.
For me, there are positives and negatives on both sides of the issue. I think in our family my wife and I have come to a consensus that we can share some general information with our loved ones, but that we don't need or want to get into too many details. We want to keep it general, tell them if we're doing ok or not, and not get into a lot of the specifics. We've also been a lot better about refusing help when we didn't need it.
So how do you feel about sharing your financial situation with your family?