It seems most families don’t like talking about money. In most cultures money seems to be a taboo topic. Talking about money is perceived as being greedy. In this article, I will discuss why we feel uncomfortable talking about money and how this is contributing to our collective financial problems. Then I will explain why we should discuss money openly and honestly with family.
In hunter gatherer societies and remote farming communities, ownership was communal rather than individual and the community’s resources were shared by all members. The community would hunt together, cook together and eat together. Wealth was communal. This model does not work in modern societies. In our world, everyone around the globe is connected by money. You don’t know the name of the Brazilian who harvested Cocoa but a tiny fraction of the money you spent on buying the chocolate is the reason he works in the plantation. You don’t know the Bangladeshi girl who sewed your shirt but a tiny fraction of the money you spent on the shirt is the reason she is in that profession. We are connected to other human beings around the globe through money.
We live in a capitalistic world. In a capitalistic environment, we are rewarded for creating something of value for others. Google search engine provides enormous value to all of us. So much so that all of us use it everyday. The reward for creating this search engine is that Google has grown enormously rich and still derives the majority of its profit from its search engine. The promise of a financial reward is the primary motivation for most inventions. If it weren’t for this model, most of the products and services in the world would not exist. Unless you are living in North Korea or similar state, you are a member of the global economy. Also note that capitalism might be a new term but it has existed around the world for thousands of years.
We are not living in a communal society anymore. We live in a capitalistic world. These are two different worlds with a different set of rules.
Is it possible to win a game of chess without knowing the rules and moves each piece can make? Can you win without learning the various strategies? No. Similarly, we all participate in the game call capitalism. Those who understand this game and strategies to win end up taking a bigger piece of the economic pie. If you don’t discuss money, don’t understand money, don’t understand how to carve a bigger piece for yourself, then of course you will end up poor and financially miserable. It is just cause and effect. You need to educate yourself about money and then discuss your ideas with family members so that you can grow together.
What happens when you lose the money game. You end up working harder and harder for less and less money. You have no safety net. You have difficulty making ends meet. All this comes with enormous stress and loss of self-esteem. This impacts not only you but also your family. The single most significant reason for divorces is financial problems. Financial problems have a very detrimental impact on your health. These are only a few major problems associated with financial problems. Unlike ebola, financial problems are curable and preventable. The cure and the prevention is knowledge. Actionable knowledge about money.
All wealthy families around the world discuss money. They are not ashamed of money. They understand its power and want to continue harnessing its power to their benefit. There is nothing evil about this. Is there anything wrong with someone figuring out how to invest his savings so that it can generate enough cash flow for that person to retire? Is there anything wrong with someone running a successful business that is profitable enough to hire several employees?
People talk about things they spent money on with pride but not about making money. Why is that? People flaunt latest gadgets, expensive clothes, jewelry, cars, and other things. Yet, the don’t like talking about money. Rich people are rich because they focus on earning money rather than spending money. Their source of pride is not the latest gadgets but their cash flow producing assets and wise business decisions.
Suppose you are wise with your money but your family is not. Can you succeed financially if your spouse does not have financial discipline? It would be difficult. How can you make your understand your point of view by not discussing your rationale and reasons with your life partner? How can you teach your kids any financial discipline without talking about money? What will happen if your kids don’t grow up money smart. They will slide into financial problems and you would be the one who would need to bail them out.
Family discussions are a form of education. Money should be part of your discussions because it impacts every aspect of your life and the lives of your loved ones. Furthermore, it is the primary reason behind family fights and breakups.
