ILLUSTRATED BY TRISTAN OFFITT.
From Refinery29, 11/2016
Some of us have talked to our families about money since early childhood. How much allowance can I get? Will you buy me this toy? Why do you pack our lunches? Why do you have to go to work? Are you paying for my college?Then one day, when we’ve supposedly grown up and are on our own, we get out of practice. It becomes as taboo as our sex lives. We suddenly remember how family money conversations are the crux of every fictional family drama from Jane Austen to Gilmore Girls, and we’d like to avoid all that, thank you very much.
Then again, what’s money for, if not to help your loved ones?
So, deep breaths, you might just have to step into this minefield. Whether you’re the one in need of a little cash bailout, or you find yourself in a position to help others, broaching the subject with family won’t be easy, but it can be done. The holiday season is as good a time as any to do it — especially if you’re all feeling warm and fuzzy about each other (with or without some liquid courage). With the advice of Refinery29’s financial expert and founding partner of StashWealth Priya Malani, we’ve got some guidance to make it all just a little less awkward.
My debt is overwhelming. Can you help?
Since so many of us start our adult lives already swimming in student-loan debt, let’s start with this one. If it is, in fact, a student loan that has you gasping for air, Priya first recommends looking into refinancing before you go to your family for help, since interest rates are at an all-time low. During the refinancing process, you’ll have the option to pick a loan with a longer term (more time to pay it off), which usually means the payment will be smaller. She advises her StashWealth clients to dedicate up to 20% of their net paycheck toward paying down debts. Keep that in mind as a benchmark when determining your monthly payment for loans and credit cards.
This is where things get tricky: Credit-card debt is usually the result of spending more than you make. Expect your parents (or other familial lender) to question your lifestyle choices when you go to them for help. That said, if you’re turning over a new leaf and really determined to get yourself out of this situation for good, you can remain one step ahead of any potential criticism. Begin with a game plan, perhaps one that involves transferring your balance to a zero- or low-interest card and paying it back before the teaser rate ends. If your monthly budget won’t cover that whole amount in the given time, you might ask if they’d be willing to make up the difference by providing a temporary loan (that you also have a plan for paying back).
May I have a loan?
Once you’ve managed to dig yourself out of debt and land a job that actually pays all your bills, you could find that you’re on the other side of this money-talk equation. Try not to let requests for help take you by surprise. Have a plan in place for how you’d handle such a situation, and talk it over with your significant other if you’re in a serious relationship with shared finances.
Keep in mind that it takes a lot of guts for someone to come to you for money, so compassion is in order. That doesn’t mean you need to waive the right to ask important questions about why the loan is needed and when you’ll be paid back (politely). Also, remember that you can say no — even to your parents. Anyone who puts pressure on you after you’ve already refused doesn’t show signs of being a reliable borrower.
One heads up: A loan can put a strain on the relationship. Though it may seem cold or formal, having a simple document (even an email) to point back to can save you from many disagreements about what the original terms, conditions, or promises were.
Would you help me pay for school or a house?
Even after you’ve been on your own for years, you sometimes come across these big items and find yourself in need all over again. Of course, you’d only ask for this kind of cash from someone you know has the financial means to do so. In which case, you can approach this the same way we’ve outlined for when someone might ask you for a loan: Set a proposed dollar amount, time frame, and payback schedule.
Then consider this ask a form of what Priya calls “good debt,” as in, the kind that costs you money today but pays for itself in the long run. If you can position what you’re asking for as an investment, i.e. a house that will appreciate in value or school that may lead to a bigger salary down the road, your potential lender may feel better about saying yes. Avoid future awkwardness: Don’t let the question of whether this is a loan or a gift remain vague.
I know you’re having money trouble. How can I help?
Some of us have parents, siblings, and other loved ones who will never, ever ask for help, even when the situation is dire. We get it. A lot of adults tie their financial success to their intelligence or ability to make good decisions, so admitting failure is devastating. If you choose to reach out, be aware of how humiliated they might feel, and how condescending you might seem, no matter your good intentions.
Priya suggests coming up with a little script for yourself to begin the conversation, like, “Hey mom and dad, you did a lot for us growing up and now we’d like to help give back.” Then ask how you can help rather than determining that on your own. Allowing them to provide a specific area of assistance lets them retain control and dignity.
Will you invest in my new business?
This one can be super scary, because it’s not just about your financial vulnerability but about the validity of your dreams and ideas as well. Before you ask, gain strength from the knowledge that “the friends and family round” is quite common among startup businesses.
The first rule of thumb is to have a formal business plan to present to them and to treat them as you would any other investor. Be able to articulate your idea, explain your strategy, the business model, and timeframe within which they can expect their investment back, along with a projected profit as well as potential risks. If possible, make sure they know you have your own skin in the game too. People are a lot more comfortable investing when they know you have as much, if not more, to lose.
If they agree to invest, make sure you have a formal contract. Warning: One thing contracts and business plans can’t necessarily protect you from is unsolicited advice your family members might feel entitled to give you now that they’ve got a stake in your success. Think long and hard about whether that’s a price you’re willing to pay.
What are you doing to help yourself?
Whether you’re worried about your parents, a sibling, or another family member, you need to come from a place of respect, not condescension, when expressing concern over their financial health. Ask questions before you spout advice, but do your homework first, so you can have concrete suggestions rather than vague judgment. Ask if your parents are taking advantage of catch-up contributions to their retirement accounts, for instance.
Also, be willing to help if you find out they need it, or don’t open this can of worms at all. If they seem resistant to your guidance, you could bring in a neutral third party by helping them make an appointment with a financial advisor.
Do you want to buy [blank] from me?
Your cousin is heavily pushing their skincare line/jewelry line/workout routine. Whatever it is, you’re not interested. Instead of saying you have anything against the product or her method of doing business, just blame your budget.
If it’s not entirely true, think of it as a white lie for the greater good: I’d love to but it’s not really in my budget right now. Thanks anyway!
What’s your retirement plan?
It’s hard to think about the fact that your parents are getting older, but their future can have a huge impact on your own. According to a study last year, 20% of millennials are already providing financial support to their parents.
Do your parents have enough saved? What happens if they become disabled? Knowing their plans is important for less concrete financial considerations too: You may be planning to rely on your parents to help with childcare down the road, but if they have plans to move to Florida for their golden years, it’s time to think about nannies and daycare.
What’s your estate plan?
No one wants to think about death. But this question isn’t inappropriate, and it can save a lot of extra heartache if the worst happens.
Priya encourages her clients to initiate these delicate conversations with their parents by explaining that they’re in the middle of their own planning process. Say something like, “Our finance pro mentioned that most people create a will but never tell family where it’s kept, which got me thinking I don’t know where yours is, or if you even have one.” This isn’t about being greedy for your inheritance, by the way. When someone dies without a will, even with little or no assets to pass down, they leave behind a painful bureaucratic headache for everyone else.
Can I pay for us to go on vacation together?
Your parents or siblings could be struggling to make ends meet, but you really want to spend some special time with them and you have the means. A good way of making this happen without letting anyone lose face is to frame it as a holiday gift. It’s up to you to judge how much your family will resist such a generous gift and how much convincing they’ll need to take you up on it.
You may want to downplay your spending by joking that this is their only gift for the next year, or by telling a white lie about a big bonus or a raffle prize. We don’t condone lying, but in an effort to make your recipients less uncomfortable, maybe a little white lie is okay.
Would you please give me cash instead of presents?
When you’re trying to save money or get out of debt, it’s frustrating to get an unneeded new wallet or scarf when you really could have used the cash your family spent on those things. The thing is, gift-giving is just as much for the giver as it is for the receiver, and a lot of people don’t find the sentiment behind giving money as satisfying as giving a present that requires thought.
But again, if you frame your request the right way, they could see things differently. Tell your folks that you’re working on building an emergency fund and that you’d really appreciate a monetary gift to go toward your financial security. Manage your expectations, though. Families with a strong culture of gift-giving won’t move away from it overnight.
I can’t afford to visit for the holidays this year.
Guilt is nearly unavoidable during the holiday season, but honesty is a good way to ward it off. Even though your parents want you to visit them, they probably also want you to be financially stable. You might want to say something along the lines of, “While I can’t afford to visit you, I have a plan to save up so that I can visit in the next three months.” They’ll appreciate knowing that you’d really like to see them.
And then the ball is in their court. They may be able to swing the trip in lieu of another gift. Or together you can set up a Skype date to celebrate the holiday and make sure to prioritize saving for a visit for a few months down the road.
How much money do you make in that field?
Don’t want to talk shop? You don’t have to. Some easy shut downs: Half of what I’m worth. Whatever it is, it’s never enough. Enough to pay the bills, which is a good thing.
Or if you want to segue into what, exactly, you do, change the topic by saying, hopefully more soon, I’m up for a promotion, so fingers crossed. And then talk more about your day-to-day duties.
How much do you pay in rent?
When you live in an expensive city, relatives who live in a more affordable place may be shocked by the amount of cash you splash out on your pad. And while you’re fine commiserating on rent with your friends, you don’t want a lecture from Uncle Charlie. So what do you say? A few bland comments are all you need to bore the asker into another topic of conversation, says Priya.
Her best suggestions: Say, “Too much,” “It’s not bad,” or “Ugh, you don’t even want to know.”
Really? You’re spending money on that?
Ugh. This is the worst. But before you retaliate and explain that, yes, of course you’re spending money on your favorite boutique fitness class/designer brand/Seamless splurge, suss out where and who the advice is coming from, says Priya.
Instead of jumping into a defensive position, start by asking a question like “Why do you ask?” That way you can frame your response in context of why they are asking. Maybe the person asking has a suggestion, additional information that might help you, a personal example that you can learn from, or they may just cause you to rethink what you’re spending on — for example, perhaps they have a tip on an amazing sale site where you can get incredible designer purchases for a fraction of the price (we can dream, right?).
But if someone’s asking when it’s really none of their business to have an opinion about what you’re spending on — especially if it’s a want not a need), feel free to shut them down. One of the lines that we say a lot around the office is, “Yup! Everyone has their thing!”
No one has the right to tell you how to spend your money. However, if you’re not great with money, it’s self-defeating to ignore smart advice, even if it’s delivered in a judge-y sort of way. Try to ignore the delivery and focus on the advice. If you can manage to do that, the only person that benefits is you! That’s a good thing!
