Let’s Talk About Money, Baby

Last week I dreamed about my private student loans. In my dream–or rather my nightmare–I received a call to inform me I still had $5000 remaining on the private student loans I paid off last year. I was absolutely distraught in my dream, as I would have been in real life.

Those two private loans hung around for about 8 years longer than they needed to. Before I got serious about eliminating debt and working toward financial independence, paying the minimum was fine with me because I saw these two loans as “good debt.” When I slowly began my Financial Independence (FI) journey at the beginning of 2018, paying off those loans appeared at the top of my “to-do” list, next to getting rid of my credit card debt and building a real emergency savings account. Once I finally paid off those loans in December, I celebrated the victory as a culmination of my hard work and rewarded my attempts to shift my priorities to reflect the behaviors of someone who is “good with money.”

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It made sense I would dream about money. Thinking about money and, now with this blog, writing about money have become part of my daily routines. And talking about money in real life isn’t always easy. Since money is often on the forefront of my mind, I find myself slipping references to retirement accounts, high-yield savings, budgeting, or credit card hacking in casual conversation, but those references have not always been warmly embraced.

Gaining control of my finances has been an empowering experience for me and I love to share the things I’ve learned. However, broaching the subject of money doesn’t always win you friends. Money is a topic laden with emotions and I try to take notice when friends are not as receptive to money talk. Because money can represent status or a measure of one’s intelligence, talent, or determination to some, talking about money can trigger deeply personal reactions.

I’ve noticed the little ways friends close the money conversation quickly. A casual conversation with a friend at the pool last summer about why I wasn’t shopping much led to me sharing my new budgeting priorities and clothes buying ban. My friend gave me a puzzled look and responded, “Why worry about money? We’re all going to die and can’t take it with us anyway.”

I have a difficult time with holding a poker face, so I probably looked mortified. Instead of trying to evangelize her on the possibilities of the FIRE movement, I simply changed the subject. It’s easier to talk about sex, politics, or other “impolite” subjects with friends before bringing up money. Many people do not like to discuss their vulnerabilities with others, and money history can be rife with memories of failures (as mine is). Acknowledging shortcomings and mistakes related to money is difficult to do openly, so I had to begin with my own self-reflection when I started down the path to FI.

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I grew up in a lower middle class household with loving parents who didn’t really teach me much directly about money. Although they never sat me down for money lessons, I learned by observing. My parents, who took pride in their high credit scores, seemed to be in a cycle of small debts. Buying a new couch with “no interest financing” or charging Christmas gifts on their Kohl’s card was the norm. Every time I stood in front of the fridge, I saw their calendar hanging front and center–a calendar filled with bill due dates almost every other day. Debt was a way of life for my parents and I ascribed to the message that “good debt” was acceptable and normal.

Many personal finance books have a section near the beginning that asks readers to think or write about their money history. What did we learn about money? What have we internalized about money? What is money worth to us? I start with an activity like this with my students. It’s a completely anonymous stream of consciousness writing activity I do not collect or grade. Integrating this activity in the classroom helps me frame the way students may approach money within their budgets and personal finance lessons in general.

When I completed this activity for myself, I realized the ways I rationalized my debt to find justifications for all kinds of spending. It was for my college education. I had to book that once-in-a-lifetime trip to Europe. And then that other once-in-a-lifetime trip to Europe. I needed to make my friend’s wedding extra special. A balance of a few thousand dollars on a credit card isn’t a big deal.  At least I don’t have a problem buying designer shoes and bags.

I remember when I felt entitled to a new mattress but didn’t have the money upfront, so I put about $900 on a “no interest financing for one year” credit card through the mattress store. Because I set up direct payments, I completely forgot about the mattress and was hit with a $200 charge for the interest a year later. This episode still triggers intense feelings of disappointment for me. If I waited only two months before purchasing the mattress, I could have easily focused my efforts on saving the full amount instead of charging it. My spending and savings priorities were detrimental to my overall financial health.

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Being honest with yourself can be hard, especially when you must come face-to-face with failure. I failed to be an adult who managed money responsibly. I failed to plan adequately for big purchases and have a clear plan for my financial future. I failed to be a conscious consumer who spent in line with my values.

Although I now have an emergency savings account and maintain a more mindful budget, I still wrestle with the shame and guilt of past debts. When I see my remaining federal student loan balance It’s not just $38000. It’s my lack of planning in high school. My decision not to take extra shifts at my part time job in college. A reflection of the wages of my parents who couldn’t pay more for my school up front. My irresponsible 20s – the time when I should have been tackling my debt head on.

I also don’t want to appear whiney about my debt. I know I willingly signed up for it (although I didn’t fully grasp the weight of it, but that’s for another post I guess) and I am incredibly privileged to have a steady job with a salary that is above the median household income. I know many others face challenges when it comes to their health, families, discrimination, or a whole host of other potential struggles that can make financial stability difficult or even next to impossible.

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For me, thinking about my past money mistakes represents the “should haves.” My friend who closed the money conversation at the pool exhibited a defensiveness I believe is rooted in regret or shame. I think that because I feel it too with the issue of my still lingering student loan. I am delicate in approaching the topic of money with this friend specifically. She recently bought a house with money borrowed from a relative. Her mortgage will be sizably more than her current rent and she admitted she has next to nothing in her savings account. She volunteered all of this information without my asking because I am trying to avoid being judgemental about her decisions. However, if she ever wants to talk about money, I’ll be the first to listen.

One of my goals with students is to foster an openness when talking about money. I’m nowhere near perfect when it comes to my finances, but I share some of my lessons, hurdles, and bad decisions in the hopes that they can avoid them, or at least recognize some common problems. I want money talk to be normal and natural — hopefully I can be open about discussing money so my subconscious doesn’t weave my money fears into my dream.

Do you talk about money with friends or family members? Why or why not? How do you bring up the sensitive subject — if at all?