Have you ever found yourself in an awkward social situation because of a conversation about money? For example, you make a new acquaintance, and this person tells you about the new $1 million house they bought. Then they shift to the trouble they are having with their $200,000 high-end Italian sports car. You may have cringed and thought “Too Much Information!” Even worse is the situation where you are being interrogated (or so it feels) about how much you paid for your shoes, your new sofa, or your kids school tuition, etc.

So, what are best practices for conversations about money, today? Renowned etiquette expert Emily Post would roll over in her grave if she knew how much was overshared about money today. Her basic approach was that conversations about money were gauche and were to be avoided. One never discussed money—ever! In some circles that no longer seems true.

People who insist on talking about money fall into four categories: Bragger, Gossip, Competitor and Curious.

1. The Bragger

The Bragger is the person described earlier.  They want you to know about all their purchases so you will consider them worthy of your friendship. They make sure everything is posted on social media, and they are hoping that you ask for more details, preferably in the public chat section. They want you to think they are wealthy and running with an elite crowd.

2. The Gossip

The Gossip is the one to beware. They generally pummel you with questions about your situation. They consider knowledge to be power. These conversations can be unsettling. They might ask how much you inherited when your grandmother died or if your kids got scholarships to college. While it is fine to say, “That’s not an appropriate topic,” you may just discretely change the subject. Asking, “How is your yard handling this two-month drought?” sends a clear message. The firmer your reply, the more likely you’ll cut off further inquiry.

3. The Competitor

The Competitor typically wants you to make as many bad decisions as they have. They are the ones that would like to see you jump into crypto currency, invest in rental houses, or buy into a stock mentioned on MSNBC.  Get them to tell you about their best financial decision that turned out well. Then ask about the decisions they wish they could “do over.”

4. The Curious

The Curious is like the Gossip, but they usually have different motives. They are simply trying to measure themselves against your situation – not necessarily you personally. The graceful responses might include phrases like “not enough,” or “too much.”  The more nebulous, the better.

Safe Money Discussions

There are a few safe money discussions. These include the following three types.

• Micro-economic discussions can work as an ice breaker at parties or if some small talk is in order.  For example, “Do you know where to get the cheapest gas in town? Or “Are you going to that big sale at Dillard’s next week?” Discussing a victory may be fine here – such as, “Have you seen the gas war between Sam’s and Costco?” They key is that the topic should be a small purchase price and something that everyone can participate in or benefit from.

• Counseling takes place when someone is legitimately asking your opinion of something. Counseling typically happens within families or close friends. The example of a counselor may be a parent that is asked specific advice from a child. For example, “Hey Mom/Dad, we want to buy a new house, what do you think?” In that case, you are free to ask questions such as, “What is your household income level? How much house are you considering? What are your current debts? When are you getting married?” When you are being asked for specific advice from a friend or relative, it is fine to ask probing questions. Be prepared for the time you may be required to spend to provide sound advice. Don’t be disappointed if they decide not to take your advice!

• Investment Advisors are no longer scarce or unique in Arkansas. There has been a dramatic increase in colleges and universities adding Financial Planning courses. Just as you would seek advice with an important medical issue, most people would be better off seeing professional advice for major financial challenges. CFP® Professionals are trained to ask detailed questions to model financial situations and provide objective guidance.  They are like money physicians; in that they see a broad range of financial situations and if registered as Investment Advisors with the S.E.C. are bound by the duty of a fiduciary. This duty also demands confidentiality. If they are also fee-only, they don’t have the temptation to push your friend to invest in something that may not be in your friend’s best interest.

We recognize that financial discussions can be tricky, but sometimes people just want your insight and wisdom. Ask yourself, “How can I help them and point them in the right direction?” We would hope that you are able to manage those conversations and provide assistance that perhaps even Emily Post would approve.

Kristina Bolhouse, CPA/PFS, CFP®

Vice President/Shareholder

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