All about investments, personal finance and well-being! But almost always based on academic research.
Let me ask you something: Do you talk, in detail, about money with your family or close people? If the answer is "yes", then, according to research, you are one of the fewest group of people in the world who speaks about these topic. For those who answered "no" or "not much", well you are not alone, believe it or not, talking about money is a taboo that extends across many countries. Let us study this in detail from the academic perspective.
Talking about money (specifically how much you earn, how much you spend or how much you own) is a widely avoided topic in the lives of people around the world. Talking about money is considered embarrassing, inappropriate, classless, confusing, intimidating, immoral, boring, etc. This transcends many world cultures. There is a good amount of academic research that has studied in detail this behavior of people, let's study them.
The study "Couples and Money: The Last Taboo” (Joan D, 2012) concluded that many couples prefer to talk about infidelities than how finances are managed and how much money they earn. In addition, it was explained how many children around the world grow up with no idea how much money their parents make or spend (personally, I can relate a lot to that last point).
Marriage in the nineteenth century involved an economic dimension where men's greatest power in the relationship came from their status as breadwinner, responsible for financially supporting the entire family. At the same time, wives were raised as financially dependent
on husbands and were mostly responsible for the unpaid household tasks and caring for the family. This caused a hierarchy in marriage because men were seen as having the right to control the money more than their wives (Vogler, 2005).
It was found that this taboo has its origin in several factors: gender, upbringing received, social context in a marriage, money management styles, etc.
In the study "Lack of Money tops list of American's financial worries" (Magali R, 2011), its author found that talking about money is the most stressful factor in the lives of Americans, even more than death, politics and religion . Can you believe it? No topic of conversation has raised respondents' stress levels higher than talking about how much money they make, how much they spend, and how much they own.
Finally, the article "Why Do We Hate to Talk About Money?", written by Daniel Crosby in 2016, explains that the 3 main reasons why talking about money is a taboo are: It is stressful (fear of being exposed and to face a feeling of inferiority), it is a social taboo (subject that, since childhood, is avoided and dismissed as negative in most countries of the world) and, most people, do not handle numbers well (fear of not being able to carry on or understand the conversation, this is again a fear of feeling inferior).
As you can see, we have a big problem in front of us. If what we are looking for is to form a serious financial and investment plan, either with our close people or with a financial advisor, then most likely, sooner or later you will feel the stress that this taboo will generate for you. It is vitally important that we put this aside and force ourselves to be more transparent when it comes to discussing our finances, especially in the context of working with a financial advisor.
The good news is that since this is just a taboo, it can be easily removed. It will be up to us to start talking more about money with our close people and thus, little by little, eliminate the stress and discomfort that this subject causes in the vast majority of people in the world.
Clear and transparent communication about personal finances is one of the first steps in forming a serious investment plan.
To finish, from my own personal experience I can say that this taboo has been and continues to be very present in my own life (especially in my family), talking about money is a subject that has always bothered me a lot, even when I talk about it with people I trust the most. Fortunately, when I realized that this taboo existed, I have started to force myself to be more open and transparent with this topic and I can affirm that, since I forced myself to be more open, the discomfort has reduced a lot (and really fast).
I hope you find it useful and you liked my article. Stay tuned as I will be posting more consistently a lot of information about the world of investments, personal finance and wellness. Everything (or almost) will be based on serious and recognized academic research.
© 2022 Nicolas Hidalgo