Wealth Management

The role of shame in discussing finances with family

Matthew Swieconek
11 October 2023
6 min read

Shame, a complex and deeply ingrained emotion, can shape our attitude towards discussing finances with family. In Australia, societal norms emphasise self-reliance and financial independence, and acknowledging financial struggles can feel like admitting failure.

When family members don't communicate openly about their financial situations, planning effectively for the future becomes nearly impossible. The reasons for this silence are numerous and complex. Understanding the role of shame in discussing finances with family is the first step towards breaking free from its grip.

Differences in concerns and challenges across generations

As the saying goes, "Different strokes for different folks," each generation approaches these discussions with unique worries and hurdles.

Baby Boomers

Baby Boomers are the least likely to find financial conversations awkward, with only 14% expressing discomfort. However, they are more likely to fear conflict (26%) regarding financial discussions.

Interestingly, Baby Boomers are more inclined to view finances as a private matter not meant for family discussions, with 24% stating that it's simply not a topic they discuss. This viewpoint aligns with traditional notions of privacy and self-sufficiency, where discussing money matters might be considered intrusive.

Millennials and Gen X

Millennials and Gen X share some commonalities but differ in their financial concerns. Both generations are less likely to find financial conversations awkward than Gen Z, with 16% and 14% expressing discomfort. However, Millennials are less concerned about being judged (7%) but are more likely to feel that these conversations lack value (10%).

On the other hand, Gen X is slightly more concerned about being judged (10%) but is less likely to find the conversations lacking value. This generation may feel caught between the financial attitudes of their parents (Baby Boomers) and the younger generations.

Gen Z

For Gen Z, financial conversations can be a minefield of awkwardness. This generation is born into a digital age and may be more comfortable discussing their personal lives on social media than with their families. Unsurprisingly, 31% of Gen Z respondents feel uncomfortable or awkward discussing finances with family.

32% of Gen Z respondents cite fear of being judged as their top barrier. This fear of judgement may stem from the pressure to live up to the standards of an increasingly materialistic society.

In addition, 23% of Gen Z respondents express concerns about not seeing the benefit or value of discussing finances with their family. It could be because many of them are just starting their financial journeys and may not yet grasp the long-term benefits of these conversations.

2023_Findex_Conversations that count_insight article-03Comfort level discussing finances within the family unit

The comfort level of discussing finances within the family unit in Australia is contradictory. On one hand, 90% of Australians feel comfortable talking about money with their immediate family members.

On the other hand, they also admit to facing barriers and concerns that hinder them from speaking openly about their money matters. Gen Z will likely face challenges or concerns that stop them from openly having financial discussions with family members. More than 7 in 10 Gen Z respondents indicate that something will prevent them from engaging in these conversations.

2023_Findex_Conversations that count_insight article-02The role of shame in financial conversations

Whether struggling with debt, feeling inadequate compared to peers, or making perceived financial mistakes, these experiences can all lead to feelings of shame. When individuals carry this shame into discussing finances with family it can stifle open communication and prevent family members from seeking the support and guidance they may need.

Parents play a pivotal role in breaking down the barriers of shame associated with financial conversations. By fostering empathy, providing education, normalising conversations, and seeking professional help, families can create a safe and supportive space for financial discussions.

2023_Findex_Conversations that count_insight article-01How to stop shame from hampering meaningful conversations

Shame can cast long shadows, especially when discussing finances with family. These are ways to normalise financial discussions in a family:

  • Normalise open conversations. Actively communicate that having financial discussions is a natural and essential aspect of responsible money management.

  • Lead by example. Parents can share their financial experiences, including successes and challenges, to create a safe space to discuss finances.

  • Focus on learning and growth. Emphasise that financial conversations are about opportunities for learning and growth.

  • Set clear objectives. Define the goals of financial conversations, such as improving financial literacy or planning for long-term wealth. These objectives help shift the focus away from personal judgements.

  • Find neutral ground. Opt for neutral settings for financial discussions, such as during a walk, meal, or family outing. It can help ease tension and create a more relaxed atmosphere.

  • Acknowledge emotions. Encourage open expression of feelings, while ensuring these emotions do not hinder productive discussions.

  • Offer support. Assure that financial struggles are common and that family members are a source of support.

By recognising the role of shame and actively working to address it, families can transform what might have been a source of discomfort into a powerful tool for growth, understanding, and support.

Empower your family to have financial conversations

Different age groups experience shame differently in financial discussions, with Gen Z often facing the most challenges. Shame can be a barrier, but parents can normalise these conversations.

One way to help facilitate constructive and open conversations about family finances, is by seeking financial advice from an experienced financial adviser who can work with you and your family to overcome any barriers.

At Findex, our extensive expertise in wealth management and commitment to financial well-being, enables us to provide valuable resources and support to elevate financial conversations and steer them toward productive outcomes.

For more information on the role of shame in discussing finances with family, read our full research report, Conversations That Count and download our guide to Navigating Financial Conversations Across Generations.

To explore how we can work together to secure you and your family’s financial future, get in touch with us today.

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Author: Matthew Swieconek | Head of Investment Relations