Cathy and Ben had to make a key financial decision: how much of his paycheck was he going to apportion to his 401k. Ben had been unemployed for five months, and now had a new job that would be paying him less--by about 30 percent--than his old job. How much could they put into a retirement savings account and still have enough cash to pay the their monthly bills? So when Cathy brought up the subject of the 401k while Ben was watching a baseball game with his 21-year-old son, Ben balked. "I don't want to talk about it now," he told Cathy. When she persisted, he was franker: "I don't want to talk about in front of [my son]."
"This is one of problems between me and Ben," Cathy says. "He's uncomfortable talking to his kids about family money. I think they should know. I don't see why it should be a secret."
This reluctance to discuss family money matters has been going on since Cathy and Ben's son and daughter reached young adulthood. When they were college bound, Cathy wanted to level with them about what she expected them to contribute to college costs. Ben said nothing, preferring to pick up the whole tab. A few months ago, with one child out of college and the other in his senior year, Ben lost his job. Cathy was frank with the kids: You can no longer expect any financial help from us. Ben once again evaded the issue. He didn't want his children to feel the weight of his job loss. Costs for his kids were the last thing he would trim from his budget.
Cathy sees her tell-it-like-it-is attitude as part of her midwestern heritage. She grew up in a small city at the edge of farm country. Where she comes from, she says, people were frank about everything, including money. Ben grew up in a sizeable city. His father supported the family of four boys in a style that was more than comfortable. Ben's dad never discussed finances with or around his children, and Ben is carrying on the family tradition.
He's not alone. Martin Kurtz, former president of the Financial Planning Association, says most families have trouble talking about money. "There's no way to talk about it and not have emotion involved," he says. "It reflects our personal belief system." And when young adults on the cusp of independence are involved, it's even harder to sit down and chat about family finances. "When your child is heading toward become independent, you're transitioning from the end of one thing and the beginning of another," he says. "It's difficult because parents don’t want to give up control around money."
On the question of the 401k, business was as usual in the Cathy-Ben household. Their son left the room so Cathy and Ben could make a decision. But as soon as Ben left town the next day on a business trip, Cathy talked to her son about the issue. "He--and his sister--should be more familiar with how our finances work. By hearing us talk about it, he'd have a better idea how to set up his finances when he starts a family."
Sounds like a no-brainer, but not many of us are comfortable doing it. And those of us like Cathy who are usually end up having to do it alone.