Some say money talks, but many people feel uncomfortable talking about money. However, talking openly about your finances with people you trust can be an important step in reaching your goals. Try building better money habits with these five conversation starters.
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1. “Have you tried loud budgeting?”
It might feel easier to cave into peer pressure to spend in order to keep up appearances, rather than stick to a budget. It’s hard to turn down going for dinner with friends, especially if everyone else is going along with the plan.
Loud budgeting can make it easier for you to stick to your budget. It means talking out loud about budgeting with your social circle. Hopefully this leads to less peer pressure to socialize in expensive ways.
Being vocal about your finances by using loud budgeting, may help you find cost effective ways to have fun. And it’s a chance to include your friends in the process. For example:
- “I’m over budget on dining out this week, but how about meeting up for a walk instead? I’ve been meaning to check out more parks in my neighbourhood.”
- “Would you be up for trying a new place for drinks? I’m looking for new places that can better fit my budget.”
- “This month I’m doing a no-spend challenge. It’s going to help me re-set my spending habits.”
By making budgeting part of the conversation, you also give others permission to do the same. It’s likely there are others in your social circle who are looking for ways to lighten their expenses. Talking about it together means you could gain a support partner or two.
Budgeting is one of the most helpful financial habits you can start. There are different budgeting methods to choose from. But it can be stressful if you’re new to it. And sticking to a budget can mean trimming some expenses, including those that involve time with friends.
It doesn’t need to be complicated, as long as you have some way to track your spending and compare it to how much money you have coming in. This can make a difference in helping you see where you could manage expenses, or what times of the week you tend to spend more.
If you’re new to budgeting, try starting by tracking your expenses for a month or two. You can use our cash flow calculator to help get started. Sometimes this step alone can raise awareness of places you can cut back or cut out certain expenses, to help balance your budget.
2. “What’s your favourite way to save money?”
People love being asked to share their favourite tips and show off what they know. If they get to highlight the ways they save money, it makes them look good, and you’ll learn something new in the process.
As inflation has made rising costs a reality, everyone is looking for new ways to manage expenses. Since everyone has different strategies, it’s good to learn from those around you.
You might also find that talking about saving money can lead to other money conversations. For example, discussing the financial goals you’re saving for, learning how they found a financial advisor they like, or sharing strategies to make filing taxes easier.
If you’re looking for new tips you can share with others, too, why not try some of these:
- Pay yourself first – automatically save some money from each paycheque before you’re tempted to spend.
- Reduce transportation costs – swap one cab/rideshare ride for a transit trip once a week.
- Make a list – every time you go shopping create a list and commit to it when in the store.
- Take a no-spend challenge – for a week or a month try to not spend any money (except for necessary living expenses), this might help break some impulse spending habits you aren’t as aware of.
- Be real about your spending excuses – this can help you look for less expensive swaps, such as trading in the online book orders for a library card.
Conversations about saving could also lead to the topic of emergency funds. It’s a good idea to start building one if you haven’t got one already. Among your circle of friends, you could encourage each other to make progress.
Finding ways to save can be a challenge, but small changes can add up over time. For example, it might not be realistic to cut all streaming services or all takeout. But cutting out one streaming service and one weekly takeout meal could add up to significant monthly savings. Try our spending habits calculator to see what you could save. And check out even more tips on how to save money.
3. “Frauds happens a lot. Let’s talk about how we can protect ourselves.”
One of the most important money conversations you can have with your family and close friends isn’t about growing money, but protecting it. Frauds and scams are becoming more sophisticated. And the cost of becoming a target of a scam can be extremely high.
The rise of AI technology means it is easier for a scammer to impersonate someone, by cloning their face or voice. Some fraudsters use grandparent scams to impersonate a grandchild or loved one in a crisis and insist they need money right away. And recovery room scammers will pretend to help someone get their money back after they’ve been defrauded — but they’re actually taking money from them again.
It’s hard to keep up with all the types of fraud. But one simple way to protect yourself is to talk to your family and close friends about a code word or ‘safe word’ that only you and they know. Perhaps a whole phrase, or more than one.
If a loved one suddenly calls you, or texts you, asking for immediate financial help, you can use the code word to verify it’s really them. Ask them to say the code word. If the person can’t answer, then you’ll know you’re dealing with a fraudster. Hang up and phone your friend or family member back using a number you have that you know belongs to them.
It’s hard to stay on top of every kind of scam. Fraudsters will change their tactics often. Learn the ways a fraudster might approach you. And keep your personal information safe by following these steps.
4. “When was the last time you checked your credit report?”
Your credit score and credit reports are an important part of your financial identity. The information in your credit report summarizes your credit history and helps potential lenders decide whether to lend you money. This is important when you need to, for example, take out a loan to buy a car or take on a mortgage to buy a house. And your credit score is part of the information contained in your credit report.
The only way to know what your credit report says is to request a copy of it, either from Equifax or TransUnion, or both. It’s a good idea to check your credit report once a year so that you know your standing. And, if there are any fraudulent accounts open in your name, you should take steps to report them.
By starting the conversation about checking your credit report, you might help others learn how to check it too. Many people first learn about credit reports when they’re asked to share a copy of it — by a potential lender or employer, for example. If your credit score turns out to be lower than you’d like, you’ll have time to work on improving it before you’re required to share it.
It might also help you compare strategies on how you can help improve your credit score. This can include steps like:
- Developing strategies to make sure your bills are paid on time.
- Making a plan to repay what you owe, beyond just making minimum monthly payments.
- Finding ways to avoid over-using your credit, like building an emergency fund for surprise expenses.
You can check your credit report for free once a year, from each of the two agencies. You can check them six months apart for an even more up to date picture. Both Equifax and TransUnion offer free credit reports online or by mail.
5. “How are you doing lately?”
A great way to talk about money without talking about money, is to simply check in and find out how someone is doing. This is especially true if it’s someone who is more socially isolated, or who has recently experienced some kind of hardship or loss.
It’s always good to keep in touch with friends and family, but even more so if it’s been a while since you’ve heard from them. If they are having a hard time personally, it can impact their finances or a financial hardship might be causing stress. Consider what kind of financial lifeline you might be able to offer them, even if it’s just to come sit with them while they review their household budget.
Something else to watch for is whether they have recently gained any online friends or romances, seemingly out of the blue. While online friendships aren’t suspicious on their own, it would be concerning if it was someone who they hadn’t met in person and who was suddenly offering advice on investments. This could be a sign of a long-haul investment scammer, who pretends to make contact by a friendly accident and then keeps up the relationship long enough to gain the person’s trust.
There are many good reasons to keep in touch with folks, and you never know where the conversation might lead. You could open the door to talking about:
- Ensuring your loved one(s) have named a trusted contact person.
- Talking about appointing a power of attorney who can make legal decisions in the event that your loved one needs someone to act in their interest.
Remember that you don’t need to have all the answers yourself. These conversations can be a good first step towards getting the professional support or specialized financial advice that the person needs.
Caution
Having money conversations with friends and family is important for many reasons. But it shouldn’t take the place of getting professional advice when you need it. Working with a financial advisor can offer specialized advice on the types of investments that are right for your goals and situation.
Check out resources for investors — it has helpful websites and tools to begin finding answers to your questions and to connect with community supports.
Summary
Try building better money habits with these five conversation starters:
- Talking about your budgeting plans out loud to reinforce your goals and enlist the support of trusted friends and family.
- Sharing money saving tips.
- Talking about frauds and having a special code word to confirm the identity of friends or family who contact you.
- Reminding others about the importance of regularly checking credit scores.
- Asking those around you how they are — a simple but effective way to make sure those you love are okay, financially, and otherwise.
