It can be an uncomfortable subject to discuss with others, but as the cost of living continues to rise, there has never been a better time to spark the conversation about money with friends and family.
Finances impact more areas of our lives than ever, despite continual readjustment of budgets in an effort to afford everyday living. Opening up a conversation about money not only enables you to save more efficiently long-term, but ensures your relationships with both your bank balance and friends remain healthy. Here are four ways to achieve that.
- Set the tone
Having a conversation about money with your friends may feel unnatural at first. Start the conversation with an open mind and without any judgement.
The purpose of a money conversation is to gain a mutual understanding of your financial situations and identify ways in which you can support each other.
Come prepared to discuss how money management decisions you’ve made might impact your social dynamic with that person so they can better understand how to support you, and vice versa.
2. Be considerate of others’ financial obligations
Do you know if your friends have loved ones they financially support? Perhaps they help pay for their overseas family’s housing costs, or contribute to their medical bills. WorldRemit found that a fifth of Brits who regularly send money to another country feel increased pressure from loved ones to send even more as the cost of living rises all over the world.
As a result of this, many Brits are making changes to their lifestyle. For example, 23% have started using public transport more instead of driving, and 49% find various ways to save more on daily expenses to ensure that they can keep sending a portion of their earnings to friends and family abroad.
Expenses have significantly increased for British parents in 2022, which saw the average cost of shopping for a new school term in the UK rise by 8.5% when compared with 2021, according to WorldRemit’s ‘Cost of School’ study.
It might be worth bearing this in mind if you find yourself wondering why they are more inclined to meet for budget-friendly activities, or less able to contribute to group gifts.
3. Be transparent about your goals
Be conscious of your friends’ financial goals, it shouldn’t be a source of conflict! A ‘no thank you’ response to a social invite is not necessarily because they don’t want to join in, they may just be on a strict money-saving programme.
If you are saving for a house, a wedding, or to welcome a new addition to the family, telling your friends why you need to watch the pennies can deflect the pressure we may feel from others to take part in expensive social activities, like throwing a lavish birthday party.
Being transparent with your friends about what you are both saving for will help you understand each others’ priorities, and could even allow you to share tips, resources, and support to help you both reach your goals sooner.
4. Be flexible with your social outings – and say ‘no’
Accepting an invitation to a big birthday, wedding, or anniversary celebration is exciting, but can be fiscally draining and demanding. Almost a third (30%) of those who regularly send money abroad have declined social gatherings or occasions, and over half (55%) go out to eat less to save money
Money is an emotionally-charged topic, but with a little empathy, flexibility, and clear communication, talking about personal finance can be empowering and bring you closer to your friends.
By Karen Jordaan, Head of UK, WorldRemit
