Why Do We Hate to Talk About Money?

If you’re ever having trouble sleeping, spend some time researching financial goal setting online and you’re sure to be snoozing in no time. It’s not that advice you’ll find is bad per se, it’s just that it is fundamentally disconnected from an understanding of how people behave. Most resources will give you some great meat and potatoes stuff about setting specific, attainable and timely goals. You will nod your head, go home, and forget all about it, doing what you’ve always done before. But saying that talking about financial goals is “boring” fails to account for some of the deeper reasons why we may be averse to personalizing the investment and financial planning process. There are at least three significant reasons why we are loathe to talk about our personal financial goals: it can be stress-inducing, we dislike numbers, and it is socially taboo. Let’s examine each of these in further detail below.

STRESS TEST

A 2004 survey conducted by the American Psychological Association says that 73% of Americans name money as the number one factor that affects their stress level. Number one. The New York Times reports that couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced than couples who reported disagreements a few times a month. So, in addition to being stress-inducing public enemy number one, money is also highly implicated in whether or not we stay married. No wonder we tread lightly!

There are a couple of ways in which we attempt to manage the anxiety brought about by financial concerns, neither of which ultimately helps our cause. First, we may ignore them entirely and fail to set any specific financial goals. After all, we erroneously suppose, “if I ignore it maybe it will go away.” As anyone who has ever put off a project can attest, it never goes away and anxiety is only compounded as a deadline approaches. In college this may have been as inconsequential as pulling an all-nighter and receiving a subpar grade. In our financial lives, ignoring appropriate planning and financial goal setting can have far more damning consequences.

$%*@ING MATH!

Computer scientist Dougla Hofstadter first originated the term “innumeracy” which he defines as “a person’s inability to make sense of the numbers that run their lives.” Notice that Mr. Hofstadter is not advocating that each of us understand math at his level or that each of us strive to be a mathematician. Rather, he suggests that there is level of facility with math that is required to successfully navigate the tasks of daily living, including planning for a personal financial future. Just as one can benefit from literacy without aspiring to be Faulkner, one can benefit from numeracy without aspiring to be Einstein.

While illiteracy primarily impacts low socio-economic status individuals in the US, innumeracy is far more widespread and impacts a greater percentage of middle class and even upper middle class people. The United States, the biggest economic engine in the world, lags behind in math. The US ranked 11th in fourth grade math and 9th in eighth grade math in the most recent “Trends in International Mathematics and Science Study" with only 7 percent of US students reaching the “advanced” level, compared to 48 percent in Singapore. Myriad studies have shown that the tendency toward socializing girls away from math and science is especially pronounced. They are, formally and informally, taught that science and math are the purview of boys and men, and as a result show decreasing interest and scores beginning in early middle school.

Whatever the sociological or educational roots of our distaste for numbers, the impact of innumeracy on our ability to create meaningful financial goals cannot be overstated. We avoid what we don’t understand, instead falling back on what we are fed by the financial news outlets, who often care more about sensationalism than substance. After all, their motive is to sell ad space, not give you meaningful data from which to build a financial roadmap.

"IT'S JUST NOT DONE"

One needn’t look any further than the last Presidential election to witness the sloughing off of some historical conversational taboos. In the not too distant past, topics such as race, religion and politics would have been considered impolite. In an era of increasing transparency and acceptance, however, old mores are being replaced by new standards. But despite our increased fluency in the language of what once was verboten, one topic remains touchy and awkward, especially within families. Indeed, in an era when sex is discussed freely on the nightly news, we still don’t know how to talk to one another about money. If you demand further proof of the matter, remember that some organizations legally compel their employees to keep quiet about their salary at the risk of losing their jobs.

A recent study by the American Institute of CPAs found that speaking to children about money to children was among parents’ lowest priorities. In fact, money issues were trumped by good manners, sound eating habits, the need for good grades, the dangers of drugs and the risks of smoking in terms of perceived importance. Our reticence to talk about money is certainly not out of lack of need. An Accenture report states that Baby Boomers will leave $30 trillion to their children in the next 30 years. This doesn’t even take into account the almost $12 trillion that MetLife predicts that Boomers will receive from their parents. The fact is, money will be changing hands within families at an unprecedented rate in the years to come and we are ill equipped to make the exchange.

There are a number of reasons why talking about money may be so difficult. One is that there has been a vitriolic reaction against the wealthy in the wake of the Occupy movement and the global financial crisis. This sentiment was illustrated quite vividly in the September 24 Fortune magazine cover article, “Is It Still OK To Be Rich In America?” Another reason for this taboo may have a higher source.

By my count, the Bible, the best-selling book of all time and a foundational text for a majority of Americans, mentions money no less than 250 times. While not all Biblical references to money are negative, there are certainly enough references to “filthy lucre” to give pause. Not to mention verses such as Matthew 19:24 that says, “And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” To a nation founded on Protestant ideals about work and morality, the notion of wealth as potentially corrosive is one that is deeply embedded in the collective American consciousness. But social taboos around money are not strictly religious. Sigmund Freud, an avowed atheist, identified money with feces and connected it with an anal retentive personality.

Dr. Richard Trachtman, a psychotherapist and money counselor has some fascinating thoughts on his blog, www.moneyworkandlove.com, that center on wealth as it relates to another social taboo: sex. Trachtman observes that in some ways, money is very much a part of our social every day. We commiserate with our friends about not having enough money, we let out collective groans about the burdens of taxes and dream together about how to spend fictional lottery winnings. But in terms of the more quotidian, serious matters that form the basis of our actual financial lives, we are conditioned toward silence. As Trachtman says of the sex vs. money taboo, “It is rare for a couple to marry without having had at least some sexual contact, but it is not rare at all for couples to marry without discussing financial matters.”

John Levy, a counselor to people who have recently inherited money found the following reasons for the money taboo among his clientele (as cited in O’Neil, 1993):

 · Good taste – “It’s just not done.”

· Fear of manipulation – “It will give them power over me.”

· Concern for spoiling children – “They will never make anything of themselves.”

· Embarrassment – “I don’t deserve to be so much better off than others.”

· Fear of being judged – “All they can see is my money.”

Whatever the causes of our awkwardness around conversations about money, an increased dialogue around the subject is a necessity. Passing on wealth to subsequent generations will only be as productive as they are well educated. Without the proper financial grounding, they may be ill equipped to handle their newfound assets and may actually do themselves harm with what ought to have been a great gift.

Perhaps some of the reasons above are resonant with your personal situation and perhaps not, but it seems difficult to deny that money is a subject that puts us all on eggshells. Consider a handful of your best friends. No doubt you could tell me much about their lives; joys and struggles, highs and lows. But I doubt if you could tell me their exact salary, savings or other relevant financial indicators, because we simply don’t talk about them. While this is fine in polite company, this tendency toward silence can extend beyond the cocktail party circuit. When we bring this same shame to our personal planning lives, we tend not to take a deep look at our own goals and motivations and instead tend to become enthralled in the larger financial conversation, which may have very little to do with our own circumstances at all.

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