Conversations about finances are happening regularly within most Australian households, however, the focus is overwhelmingly on short-term issues rather than long-term planning, according to new research from Findex.

With the cost of living rising rapidly, it's understandable that families are focused on making ends meet and finding ways to cut costs in the short-term. But failing to also discuss longer-term goals and plans misses a valuable opportunity to set future generations up for financial security.

While short-term saving strategies dominate financial discussions, complex wealth planning is usually avoided which can be very detrimental for long-term success. So, how can families broaden the conversation?

What Aussies do or don’t discuss

The research revealed the most common financial topics family members discuss are saving and budgeting (65%) and navigating the increasing cost of living (52%).

Other frequent discussion points include insurance (35%), tax (34%), debt (34%) and superannuation (34%). These conversations provide helpful education and perspective as households look to tighten belts and find ways to offset rising prices.

But the study found more complex topics are discussed less frequently. Just 15% of Australians discuss estate planning and inheritance with their families. This represents a missed opportunity for families to ensure assets are preserved and transferred between generations in line with their values.

Meanwhile, around a quarter discuss retirement plans (24%) and investing (26%). Without focusing on issues like preparing adequately for retirement and smart investment strategies, families may lose out on the chance to ensure longer-term security.

How often Aussies have money talks

The research shows money is a common topic of conversation within most Australian homes. Nearly nine in ten people (88%) said they typically talk finances with their close family members, and 43% discuss it at least weekly.

Gen Z and Millennials were the most likely to frequently have financial talks with parents and siblings, with 43% and 34% respectively saying they do so weekly or more. This highlights the importance of financial literacy for younger Aussies facing challenging economic conditions.

But the study also found those who engage their family regularly around money matters are more likely to get help from a financial adviser. Of Australians who have financial conversations with family at least once a week, 46% have received financial advice compared to 40% of those who have money talks less frequently.

What different generations are discussing

There are some notable generational differences in the types of money matters families tend to discuss. Gen Z are the most likely generation to discuss saving and budgeting with their parents and siblings, with 71% citing this as a common conversation topic.

Meanwhile 58% of Baby Boomers have financial conversations about navigating the rising cost of living. This reflects the fact that many Boomers are now retired and living on fixed incomes, making them particularly vulnerable to inflation.

But starkly, just 11% of Gen Z and 14% of Baby Boomers are discussing estate planning and inheritance. Without planning adequately for the transfer of wealth between generations, families risk disputes and losing assets.

How to improve household financial conversations

While it's positive to see money being discussed regularly within families, the narrow focus on short-term issues means opportunities are being missed.

Here are some tips to broaden financial conversations:

• Set time aside specifically to discuss long-term plans, away from the stresses of weekly budgeting.

• Consider seeking financial advice to bring expertise and guidance to the conversation. Their perspective as a neutral third-party can help families align on goals.

• Look beyond day-to-day money matters and include values, intentions and priorities for wealth transferral between generations in your financial discussions.

• Discuss retirement plans, estate planning, wills, trusts and tax implications to find the most effective strategies for preserving wealth.

• Involve the whole family - grandparents, parents, children - to understand every perspective. Different generations often have diverse views on finances.

• Make financial conversations ongoing rather than one-off so plans can evolve as circumstances and priorities change.

Key takeaways

While financial conversations are common in Australian households, the focus tends to be on short-term budgeting rather than long-term planning. To build and preserve wealth across generations, families need to broaden discussions to include estate planning, retirement strategies, and investments.

Seeking input from a financial adviser can provide expert guidance for you and your family members and help you work towards improving your financial security. Additionally, taking a more holistic and long-term view of finances, families can put strategies in place to grow and protect wealth for generations to come.

Findex's new research provides valuable insights into how Australian families are currently communicating about money. For more findings and advice, download the full report here.

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