3 good reasons to talk about money with your friends

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Open and honest communication can improve your life in many ways.

Key points

• An April 2022 poll showed that 56% of adults surveyed think talking about money with others is “taboo”.
• Your friends can be a source of financial advice and cheerleading.
• They can also be an attentive ear to evacuate financial mistakes and mishaps.

Talking openly about money can be uncomfortable or even scary, even now in 2022. A study by Questis and OnePoll earlier this year of 2,000 adults found that 56% of respondents thought talking about money with others was “taboo”. Additionally, 58% admitted to faking their financial situation on social media in order to appear more financially stable. Ouch!

I’m a big believer in open communication, and as I got better with money and paying off debt this year, I’ve also become a proponent of talking about personal finances with the important people in your life, whether it’s whether it’s your family or friends. Read on to find out why it pays to overcome your financial blockages and share your financial gains and losses.

1. You can get or give advice for free!

If money is something you can feel more comfortable with, you can ask a knowledgeable friend for financial advice. A little warning here: Unless you’re lucky enough to be friends with financial professionals, it’s best to take all free financial advice with a grain of salt. Social media is full of people who have a free platform and as a result there is some really terrible financial advice out there. So if your friends advise you to apply for a particular credit card or use a certain brokerage firm, it’s a good idea to do your own research first, to see if that product is really right for you. On that note, consulting a financial advisor is also a great idea.

That said, if you’re on the hunt for a new credit card and you know you’ll be doing a lot of your grocery shopping, it’s a good idea to ask around in your circle of friends and see if someone has a great recommendation for a card that offers cash back for groceries. It’s good to get a real user’s opinion from someone you know and trust. Likewise, if you’ve never invested before, you probably have a few questions about how 401(k)s and IRAs work, and your investment-savvy friend might be willing to give you a quick rundown.

If you’re more open about money, you might also become the person others turn to. I’ll share an example: A few months ago, a dear friend was having trouble with her banking situation and had to pay a pile of accumulated overdraft fees. Knowing that I work in personal finance content, she asked me about personal loans and how to get one. I was happy to point her to helpful resources. It feels good to help a friend.

2. You can find allies

Just as it’s important to have financially knowledgeable friends in your life, it can also be great to have cheerleaders for money. If you feel comfortable talking about money, you can share your financial gains and maybe get some encouragement to pursue your money dreams. No one wants to be nagged about money, but if you can be honest with your friends about your intention to spend less on eating out or buying clothes, they might be willing to help you achieve that goal (or some unless not actively working against you). If you normally go shopping and then have lunch on an odd Saturday, you can all work together to find another, less expensive way to spend time together. And unless you hang out exclusively with the wealthy, chances are your friends would also appreciate being encouraged to save money at a time when inflation is so high and the cost of daily living has soared. arrow.

3. You can ventilate in a safe environment

Again, unless all of your friends are wealthy (and sometimes even if they are!), chances are they’ve experienced financial frustrations from time to time. If you apply and get denied a credit card you really wanted, or get in a car accident and need to scrounge up your car insurance deductible so you can fix your car, that’s fine. have people you can let off steam with. Sometimes you have a bad financial day (or week, or month…), and a sympathetic ear can make all the difference, even if that friend cannot help you concretely.

Let’s end the taboo against talking about money. Being open and honest with your friends about your financial situation can help you improve, help them improve, and even strengthen your friendships. For all these reasons and more, it can be very good for your finances.