Why talking about money with your family and friends should not be taboo

Earvin Famarin was 17 when he started asking his parents questions about money, something that landed him in trouble.

"I used to get scolded by them when I asked how much things cost etcetera," says the 34-year-old design draftsman, who lives in Dubai’s Discovery Gardens with his wife and two-year-old son. "Some people are raised and believe that discussing money openly is frowned upon, without logic."

Typically, he says, Filipinos are not comfortable discussing money.

"Even with friends and colleagues, most are reluctant to talk about investing, business ideas, financing, economics. As I grew older, I came to realise that that is nonsense," he says. "Discussing money creates awareness and clears confusion.”

While Mr Famarin's experience is very much in line with his Filipino culture, talking about money is still the last taboo for many nationalities around the world. However, with many families across the globe now affected financially by Covid-19, there has never been a greater need to open up to others.

In her 2019 book Open Up, author Alex Holder says while talking about money with her friends after university was the norm, offering insights into what to expect salary-wise in a chosen industry and at a certain level, this changed over time.

"As we slowly peeled away from each other and into different industries, some of us earning more, some earning less, money became a shameful subject," she says.

"Perhaps it’s because people can literally be placed in a pecking order of highest earner to lowest that we stopped sharing what we earned. No one wanted to feel that they were in a league table with their friend and subject themselves to that kind of direct comparison, so money became a subject to skirt around. The more complicated our lives got, the more it solidified into a taboo subject.”

A third of Americans say it's taboo to talk about money in social settings, according to a 2018 Harris Poll of over 1,000 US adults commissioned by online broker TD Ameritrade.

Thirty-six per cent of respondents named student loan debt the most uncomfortable financial topic to discuss, followed by childcare expenses and living pay cheque to pay cheque.

“The fear of being perceived as a failure is the number one reason millennials don't openly discuss the topic," TD Ameritrade says in the report.

Mr Famarin says despite receiving a 35 per cent reduction in his April salary due to Covid-19, he feels he can cope because he has six months’ worth of emergency funds stashed away.

“I openly discuss this with my family and am also open with friends, as some can use it to open up and it could be a means to cope with the situation," he says.  "I am open to people about how much I earn, my savings and the investments I have."

Mr Famarin says talking about money has also allowed him to learn more about investing, stock trading, passive income, protecting assets and living below your means.

“I always talk about money and planning with my spouse and siblings and am very happy that they are receptive,” he says. “I have a niece who recently joined the workforce and was able to save sizeable amounts last year. She asks for my advice once in a while."

Mr Famarin hopes to teach his son about the concept of money in the future because it was "something my parents did not talk about with me as a child".

However, while Mr Famarin has thrown off his societal norms in his 14 years in the UAE. His attitude is not standard either here or elsewhere: some married couples may not know a number as simple as each other’s salary.

Only about one in 10 Americans would feel comfortable talking about how much they earn at a dinner party, according to a 2018 poll by US credit repair company Lexington Law of some 3,000 adults. Only one in five say they would ask a friend their salary.

Deno Chapman, a 51-year-old British airline maintenance manager who lives in Dubai Silicon Oasis with his wife, says he has “complete transparency” with his spouse and three adult children, particularly when it comes to his will, investments and retirement planning.

He is also “completely open” with the friends he has made in his 10 years in Dubai, about investments, pension provisions and “even debt”.

However, he is reticent to talk money with friends or family at home in the UK. “It’s situational for everyone,” he says. “Some of my family, absolutely. Others? No."

While Mr Chapman has been given a three-month, 50 per cent pay cut due to the coronavirus outbreak, he says it hasn't impacted him financially.

"A pillar of financial planning is an emergency fund located away from the domiciled country," he says. "Luckily I did do that so am hoping I can ride this out without delaying rent payments. Again, I have been 100 per cent transparent about this with my kids and parents"

He also shares details of his salary and bonuses with his mother, a 75-year-old retiree, but retirement provisions are “complex issues”. “I keep it to a framework that someone working from the sixties to the nineties can relate to,” he says.

With his siblings, three brothers and a sister, Mr Chapman says he would feel uncomfortable discussing his salary outside of ballpark figures.

"It would feel vulgar to me. Living in Dubai seems to compound this. Despite me working very hard and long hours, people back home do sometimes think it’s a rock star lifestyle," he says.

“If asked by them, ‘What do you earn?’ or ‘How much do you save?’, obviously I’d be truthful – but I wouldn’t volunteer the information, for modesty’s sake.”

Demos Kyprianou, a board member of SimplyFI, a non-profit community of personal finance and investing enthusiasts in Dubai, says money problems such as differing financial goals or "bad" spending habits are one of the main causes of divorce – and leave children “susceptible to replicating their parents’ mistakes".

“A family that discusses and thereby aligns their goals is much better off,” he says. “In regard to friends, one can only respect their boundaries. It also depends on the subject. It also depends on the culture, as to what is socially acceptable."

Showing off what you earn, however, is "crass", says Mr Kyprianou. "But if you have a friend who got into a horrific savings plan, one might share their opinion and try to help,” he adds.

Likewise, Mr Chapman says he would never discuss wages with colleagues but says it is “startling” how many are over 40 but have not made provisions for a pension. He adds: “I regularly encourage discussion on investment and retirement planning, in the hope I can help them avoid some of the pitfalls I fell for, arriving in Dubai.”

British personal finance author Ms Holder says that money is just one currency in life and that the social code dictating that we should not talk about it was “invented by the richest of society” as the “privilege of the wealthy”.

Before she began discussing financial issues with friends, she says, conversations felt “inauthentic” because the “money-related parts of the story were missing” and she found she knew more about celebrities’ wealth than, for instance, her sister’s salary – which you might need to know when planning a holiday together.

With the wealth gap between richest and poorest increasing, she says, talking about money and spending could be an “important start” to fixing the inequality, as well as breaking the money habits and beliefs learnt from our parents and the world we grew up in, which otherwise remain “unchallenged”.

She now even publishes her annual income on her Instagram feed: £101,000 (Dh459,700) last year, more than 60 per cent coming from advertising work and the rest editorial, podcasting, speaking, social media and her book advance.

Mr Chapman says conversations with his three children – an 18-year-old son studying at university and two daughters, aged 25 and 27, have not been “too in-depth so far”.

“It’s hard engaging young people on financial issues,” he says. “I know I wasn’t over-interested at their ages but, as each gets older they’re more receptive to discussion.

"I think, with the girls, they’re more concerned for my financial welfare than theirs after three divorces. More like a, ‘Dad, are you going to be able to retire?’ conversation," he adds. "But as long as we are talking about it, that’s good.”