Americans generally don't like talking about money. They're more comfortable discussing things like marital issues, mental illness, drug addiction, race, politics and religion than about their household earnings, retirement savings and debt, according to a 2018 survey by the Capital Group.

Avoiding conversations with your loved ones about finances can lead to missed opportunities and serious money problems. If you and your spouse or partner aren't in sync on things such as spending, debt, savings and goals, the two of you may end up constantly beset by money headaches. If you don't help your children acquire good money habits, they may never achieve financial security in adulthood. And putting off talking with your aging parents about their retirement security only increases the risk that a crisis will catch the entire family off guard.

Don't let the money taboo keep you from connecting with your family members about finances. By taking time to do so, you can set clear expectations, prepare for emergencies and help build a firm foundation of financial wellness for everyone involved.

Plan a money date with your spouse or partner

Schedule a time when you and your other half can talk without distractions like children demanding your attention. Consider bringing home a takeout dinner for just the two of you.

Figure out where your household stands financially

Knowing what shape your finances are in today is the first step toward creating a plan for tomorrow. Assess your current situation, including your assets, debts (such as credit cards, student loans, car loans, and a mortgage) and credit scores. If the two of you are not already following a household budget, consider doing so to better monitor and control your spending.

Talk goals

Establish whether you and your spouse or partner are on the same page regarding financial goals. Talk about goals for your entire household (maybe a new home or a vacation is on your family wish list?), for your children (such as a college education) and specifically for you and your spouse or partner (for example, retirement). Once you've settled on goals, write them down in order of priority.

Stay calm and listen

You and your spouse or partner need to be open, honest and nonjudgmental in discussing money. Neither of you should do all the talking; this should be a conversation, not a monologue.

Listening and asking questions are key to learning from each other. Let's say your spouse or partner objects to increasing their 401(k) plan contributions. Ask why. Maybe they have a valid reason; for example, they might want to focus on building emergency savings right now. The two of you may each have different hopes and dreams and attitudes about spending, saving and investing. As in all aspects of a marriage or partnership, compromise may be necessary.

Money can trigger emotions, but if either of you starts getting defensive or angry, table the exchange and reschedule for another time.

Teach your children the facts of money

Regardless of your children's ages, you can prepare them for a lifetime of good money management by teaching the basics as early as possible and serving as a financially responsible role model. Here are suggested lessons for three separate age groups.

Ages 3-6: the cost of living

Take your child to the grocery store, where you can share how to choose among different brands of the same product category based on price, quality and other factors. Point to the need to make trade-offs sometimes. For example, if you have only $10 to spend on snacks, which snacks should you choose, and which should you pass on?

Ages 7-12: conscious spending and saving

Children old enough to spend money are old enough to save it. They're typically ready to understand needs vs. wants and the basic concept of saving to pay for a want.

Ages 13-19: investing 101

By this time, many young people are starting to earn money. This is a good time to teach the fundamentals of investing for goals that are a year or more away — for example, maybe a new video game console or even a first car. You can bring up the value of imagining — and saving and investing for — longer-term goals like a first-time home purchase or retirement.

Have "the talk" with your parents

It's important to discuss later-life needs with your parents – for their well-being and peace of mind as well as your own. Among other things, you need to feel reasonably assured that they won't outlive their retirement income and their health care needs will be met. And given that 70% of people over 65 will eventually require long-term care (according to the U.S. Department of Health and Human Services), you want to know your parents are prepared for the high costs of such care.

If you're uncomfortable with talking finances with your parents, consider bringing up the subject gently. For example, you might say, "I'm really focused on financial wellness these days. Is that something you've given a lot of thought to?"

Your parents may share your reluctance to talk about money. Most people don't discuss their cash flow and net worth with their children, so as parents get older, it may feel strange for them to open up about such things. Understand any hesitation on their part and reassure them that ultimate decisions on financial matters will rest with them.

Consider setting up a meeting with your parents, and if you have siblings, invite them to join in.

Things to address

Here are areas of concern you might wish to cover with your parents.

  • Will you be/are you able to afford retirement?
  • Do you each have up-to-date wills?
  • Have you created powers of attorney and living wills?
  • Do you have enough health care coverage?
  • Are you familiar with all your available health coverage options?
  • Are you OK living in your current home, or is it time to explore other options?
  • Do you have either insurance or savings to cover the potential costs of long-term care?
  • Where would I be able to find information about your financial accounts if need be?

Keep the momentum going

Financial planning isn't meant to be handled in one conversation. Family needs and preferences regarding finances will change over time. Plan on ongoing communication with your spouse or partner, your children and your parents. Sit down and have a money talk about once a year or whenever life brings a big change to your family.

Consider asking a financial planner for guidance

You don't necessarily have to tackle all this on your own. Your financial planner on the EY Navigate™ Planner Line can help you prepare for a conversation with loved ones about finances.

US SCORE no. 12103-211US_6

This material is provided solely for educational purposes; it does not take into account any specific individual facts and circumstances. It is not intended, and should not be relied upon, as tax, accounting, or legal advice.