Talking about money in the UK is often seen as uncomfortable, and families rarely discuss finances openly. It’s not something that comes naturally, but the truth is, having these conversations can not only increase your financial security, but also significantly boost your wealth as a family.
Why Is Talking About Money Such a Taboo?
The reluctance to talk about money in the UK can be traced back to the early 20th century. During this time, property ownership was relatively scarce, and owning a home was a clear symbol of wealth and status. There was little need to discuss finances openly because property ownership itself spoke volumes. This attitude contrasts with the United States, where land ownership was more accessible due to the country’s vast size. In the US, wealth had to be signaled in other ways, and money discussions were much more common.
I was reminded of this difference during a visit to North America, where I attended a family barbecue. I quickly learned the salaries of everyone there, as people spoke openly about how much they earned and how they managed their finances. While it might have been a little overwhelming, I found it refreshing to see how candidly people talked about money—how they made it, saved it, and passed on these lessons to their children. It’s a mindset that could benefit us all.
Why Should You Start Talking About Money?
I often speak to married couples who have been together for years yet have no idea how much the other person earns or how much they have saved. While this secrecy might have some fun advantages—like keeping surprise birthday presents a secret—there are very few benefits when it comes to financial planning. In reality, having open discussions about finances can help you grow your wealth, especially when you’re able to maximize tax allowances together.
For example, I recently worked with a couple where one partner earned more than the other, and both were managing their finances separately. The higher earner was contributing the maximum amount to their ISA and investing in a general investment account on top of that. Meanwhile, the lower earner wasn’t using an ISA at all. After they began talking openly about their finances, they realized they could double their annual tax-free savings by making full use of both ISA allowances. This simple change allowed them to save more and invest more efficiently.
Pensions and Tax Efficiency
In a situation where one partner earns significantly more, there is also great potential in using pensions effectively. For example, the higher earner could fund the lower earner’s pension, which would reduce their taxable income today and help both of them retire earlier. It’s a smart way to boost wealth for the family while saving on taxes.
Insurance and Estate Planning
One topic that many couples avoid discussing is insurance. Few couples know exactly what insurance coverage the other has, or what would happen financially if one of them were to pass away. I know it’s a difficult conversation to have, but it’s crucial for your peace of mind. Being prepared emotionally and financially if something were to happen is invaluable. I’ve seen situations where families get into financial difficulty because they couldn’t access funds in a partner’s account after death due to poor planning. Make sure you both know what insurance and estate planning you have in place.
Educating Your Children About Money
Another important aspect of talking about money is educating your children. Many people spend a lot of money on complex tax strategies to ensure their children don’t waste their inheritance. But if your children aren’t even aware that the money exists, how will they ever learn to value it? Educating your children about money and involving them in decision-making can help them understand the impact of financial choices. We often suggest setting up a small investment fund or charitable trust for children, so they can experience saving and investing firsthand.
Final Thoughts
I understand that talking about money can feel uncomfortable—it’s not something we’re traditionally taught to do. But I’m not suggesting you start wearing flashy suits and gold chains. I’m simply encouraging you to sit down, start a conversation, and discuss money openly with your family. The truth is, having these discussions will ultimately make you and your loved ones wealthier and better prepared for the future.
