Navigating Money Conversations During The Holidays

The holiday season is upon us, which for many means time with family, and potentially some interesting conversations. Are you crossing your fingers and toes that money doesn’t come up in conversation? Are you mentally preparing yourself for what could be some painful minutes? You’re not alone. 

A 2014 Wells Fargo study found that personal finance is the most challenging topic to talk about, tougher even than discussing death, politics, religion, or personal health. Our society often (and completely incorrectly) equates an individual’s wealth or earning potential with their value, so it’s no surprise that any conversation about money can be perceived as prideful or shaming. 

Your Values And Assumptions May Have Changed

Our families are often the first way in which we learned about money. As we learned how to interact with the world, we likely internalized some powerful assumptions about what money means. In our family, we might have learned to prioritize certain things, but in our personal life, this may have changed. Our goals and desires, along with their associated costs, are larger. Plus, our relationship with money isn’t grounded in assumptions and things left unsaid, right? 

Unfortunately, while many of us are hungry to talk about money, salaries, managing competing priorities – fear of judgment often stops conversations in our tracks. 

Why You Should Avoid Money Conversations During The Holidays 

Overall, money is a sensitive topic in any conversation. Most of the time we don’t understand the extent of worry a person may have in regards to their financial situation. The holidays are a time to disconnect, spend time with family and friends, and enjoy the feeling of pure joy. If you aren’t sure why talking money during the holidays is a bad idea, here are a few reasons: 

• They can be a mood killer, especially if judging is involved
• Not everyone needs to know your money business 
• If there’s drinking involved, things could take a turn for the worse
• No one wants to be reminded of their financial concerns during a holiday

Helpful Tips to Avoid The Awkward Silences 

We know during the holidays, you may have to spend time with family members or friends that you aren’t as close with. It’s really common to feel like you have nothing to talk about. What happens most of the time? We immediately jump into the “career, work, and success” conversation. If you feel awkward talking about your life status, or feel like the other party is holding back, here are some helpful tips to help shift the conversation.  

1. Talk about a happy moment. Make a positive comment on a recent personal achievement you know about. If they ran a marathon, had a new baby, got engaged, or maybe even took a nice trip. Ask them about it! 
2. Remind them of a memory. If this person was someone you were close with but not anymore, take a second to remind them of something nice you did together. 
3. Ask open questions. If your question can be answered with one or two words, you’re making the conversation harder. 
4. Movies and TV shows. Talking about your latest binge sessions is always a great (and fun) idea. Most likely, you will have one favorite show or movie in common with the person, and there’s nothing more fun than dissecting your favorite show with someone, right? 
5. Ask About New Year’s Resolutions.  By now you should know about a couple of things you want to accomplish in 2022. Even if it’s something you promised yourself in 2021 and never did. Whether it’s working out more, focussing on your passion, reading more, or visiting a place you’ve never been, there are probably a few resolutions that can spike a good conversation. 

If Money Conversations Inevitably Come Up

When you talk about money (sometimes for the first time) with someone who is there to listen, ask questions, and ultimately offer guidance, the level of comfort and harmony in the conversation is much higher. 

If money comes up during your family holiday celebration, channel your inner anthropologist. Think of yourself as uncovering the interesting and sometimes odd ways we think about and interact with money, and ask questions. Asking questions can bridge the gap between our varied assumptions and biases about money. 

We often use heuristics, mental shortcuts for making decisions, to get through life. We use them often when it comes to handling money. Some examples: “if you can’t pay your credit card off in full every month, you can’t afford to buy something”, or “I can always grow my income to meet any increasing costs”, or “if I save 20% of my income, I’m doing well”. 

Heuristics help us make decisions, rather than getting caught up in paralysis because the best path forward isn’t clear. Heuristics are helpful (since mental bandwidth is limited) but can lead to cognitive bias because new information is ignored in favor of making a quick decision. And, when someone’s actions don’t fit with our heuristics, it’s easy to judge and assume the worst. 

By coming from a place of curiosity, you can bypass some of those uncomfortable moments.

Holiday Money Conversations In Summary

When we talk about avoiding money conversations during the holiday season, we mean avoiding turning a family event into a tense and uncomfortable environment. What’s most important to take away from this article is that most of the time, we don’t know what happens behind the curtains. At a dinner table, there could be someone who got fired, made a bad investment, has high debt, or just constantly worries about money. If this person is you, do you want to be reminded of these concerns during a holiday? Probably not. 

As we enter the holiday season, be mindful when speaking to others, be sensitive to your family members, and try to focus on the happy moments that will inevitably bring joy to the table. After all, holiday gatherings only happen once a year, cherish the time you have, and make the most out of your relationships this holiday season. 

Disclosure: This blog is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.