It can be sensitive and uncomfortable to talk about money stuff, even among friends. But having open discussions with people close to you about money can be a valuable tactic to support better financial decisions.
For example, ‘loud budgeting’ is becoming a very popular way for people to be much more open with their friends about their financial goals and challenges and overcome the temptation to stay silent about your financial life. It involves sharing budgeting strategies and financial goals, as well as supporting and holding each other accountable to reach those objectives. Here’s how to talk about finances with friends, using many of the key principles of loud budgeting.
1. Break the taboo
Money has long been considered a taboo subject in social settings, but breaking this stigma can be very empowering. Start by acknowledging that talking about finances is a great way to support each other and make informed decisions.
– How to bring it up: Use casual and gentle conversation starters. For example, say something like, ‘I’ve been trying out a new budgeting app, and it’s really helped me save. Have you ever tried something like that?’ This approach helps make the topic feel more natural and approachable.
2. Practice loud budgeting
Loud budgeting is all about openly discussing your budgeting efforts, savings goals, and financial challenges (including debt). By sharing your financial experiences, you can demystify money management and encourage your friends to do the same.
– Share strategies: Discuss specific strategies that work for you, like using a budgeting app, setting spending limits, or planning for big expenses. For example, ‘I set aside 20% of my income for savings every month, and it’s been really effective. How do you manage your savings?’
3. Set boundaries
While openness is important, it’s equally critical to set boundaries to make sure everyone involved is comfortable. Make it clear that sharing is voluntary, and respect each person’s level of comfort with revealing personal financial information.
– Respect privacy: If a friend is uncomfortable sharing certain details, don’t press them. Instead, focus on general strategies and tips that don’t require disclosing sensitive information.
4. Create a supportive environment
Make sure that all conversations are supportive and never judgmental. The goal is to learn from each other and offer mutual support, not to criticize or compare financial situations.
– Encourage and validate: Praise efforts and achievements, no matter how small. For example, ‘That’s great that you’re saving for a vacation! Do you have any tips on how to save more efficiently?’
5. Discuss financial goals
Talking about financial goals can be a great way to inspire and motivate each other. Share your short-term and long-term financial objectives and discuss how you plan to achieve them.
– Goal sharing: ‘Right now, I’m saving for a down payment on a house. What about you? Do you have any big financial goals you’re working toward?’
6. Share resources
Exchange resources like articles, books, podcasts, and apps that have helped you improve your financial literacy. Sharing valuable resources can be helpful to everyone involved.
– Resource examples: ‘I found this cool podcast about personal finance. It’s totally helped me understand investing better. You should check it out—I’ll send you the link!’
7. Discuss common financial challenges
Openly discussing common financial challenges can help normalize the conversation and reduce the stigma around financial struggles. Whether it’s dealing with debt, unexpected expenses, or saving for future goals, sharing these experiences can build a sense of solidarity and mutual support.
– Problem-solving together: ‘I’ve been struggling with credit card debt. Do you have any good strategies for managing or paying off debt?’
8. Encourage financial accountability
Hold each other accountable for financial goals and budgeting practices. You can do that through regular check-ins or informal updates on each other’s progress.
– Accountability partner: ‘Let’s check in every month on our savings goals. It might help us stay on track to stay accountable to each other.’
