Chelsea: Hi, I'm Chelsea from The Financial Diet and today we're going to be talking about the art of talking money with your friends. Now a lot of us had been raised in households where the idea of talking about money is considered really like vulgar and taboo and people think generally that if you're talking money there's something weirdly braggy or insensitive about it. In fact a lot of the reason why people are so bad with personal finance is because they're just afraid to talk about it. They're afraid to ask questions or to share their mistakes or to learn from other people. People can live for years in their bad money decisions because they're too afraid to raise the subject. But at TFD we really believe that a healthy part of any good, productive friendship is talking about money in an open and honest way. Real friends should be able to talk about money just like they talk about sex, dating, work, families, any other taboo subject that friends talk about all the time. 

So we came up with these 4 kind of essential money conversations that real friends should be having as a way to really get into the habit of bringing up these topics with your friends. The more you talk about money the more you can help each other be good with it. So the first conversation you should be having with your friends is money and work. This means that all the financial elements of your career and whatever job you may be doing at the time should be part of the conversation beyond just, you know, complaining about that person at work who annoys you. Now this can mean everything from your 401k to your negotiation strategies to a raise you might've gotten. Whatever it is that is really financially related. Now this is the time to really share strategies that might have worked for you in negotiations or to get a better idea of what's a fair salary in a given industry or even to look at things like who's got a good 401k and what a good 401k even looks like.

And really the more you inform each other, the more you're arming with the information we all need to go into a new job or a raise or whatever it may be with a really good firm understanding of the working world. For example, I didn't even know that a 401k was an option until one of my friends mentioned her 401k at her job and the fact that she just started putting into it and then I looked into it and I was like "Oh shit, I have a 401k too!" But I had never thought to look into it. And trusted friends are also the people with whom you can do things like share salaries or share percentages of raises and really get these hard numbers that few people will give you. People have the misconception that talking about money is bragging, but if talking about money is informing and empowering each other, there's no shame in it. 

The second conversation you should be having is living in your city financially. This means that everything from what you're paying in rent to where you're finding used furniture to how much you're paying for, you know, maybe one of your utilities or your cable or whatever it may be. Inform each other as much as possible about the financial elements of it so maybe you can find where you're overspending. For example, anytime I find like a great Facebook group where people are doing good rental listings or giving stuff away or selling furniture for cheap, I always invite all my friends so they can get in on the deals. And anytime someone I know is looking for an apartment, I always give them as much financial info as they want about what I'm paying and how I found my place, so that they can be more informed. Getting by in any city is tough enough as it is, you don't need to do it alone. Use your friend group as kind of like a getting by in the city support group. 

The third conversation really ties into that last one and it's the social budget. This means that everything from what your general going out budget on a given weekend is to how much you guys expect people to pay for gifts for special events or whatever it may be. Or what they expect you to bring to a party, all of these things should be talked about openly. There's nothing worse than being on a budget and having, you know, a friend event or a going out or whatever it may be coming and feeling like you can't talk to your friends about the fact that you're on a budget. So many people will just pretend to be sick or make up some reason they can't go to something rather than just be like "Hey, I'm saving up for something this week or just cutting back a little bit so I really can't go to x thing." But if you can get in the habit of having ahead of time just kind of these open ongoing conversations about what you're budget might be like for going out or for gifts or whatever it may be, it doesn't have to happen every single time.

This will mean that if, you know, one of your friends is throwing some expensive dinner at a nice restaurant, they'll know just to not invite and say "Hey, I didn't invite you because I didn't want to put you in an awkward position, I know you're on a budget this weekend." And you don't have to make up some lie about how you can't go. There's zero shame for being on any kind of budget for whatever social thing, but there is shame in lying to your friends to not seem cheap. And I bet you any amount of money, if you say to one of your friends "Hey, I'm trying to do something less expensive this weekend, how about a picnic?" The biggest sentiment you'll be met with is probably relief. Most people could use a little cutting back.

And the last conversation you should be having with your friends is money and love. Now this usually means your significant other, particularly if you're living with them, but you could also have complicated financial relationships with your family members or other people in your life. What matters is that you feel comfortable going to your friends and them to you and being like "Is this normal? Is this healthy? Do you guys do stuff like this? What is your opinion? What is your advice?" For example, if you're about to move in with someone and you're not sure how to go about that financially, the first thing you should do is talk to friends and be like "Well what was your experience? What worked, what didn't? What do you wish that you had done?" And above all, if you feel like a relationship is financially unhealthy r toxic or abusive, you need to be able to go to your friends and say "Hey, am I crazy or is this really unhealthy?"

I've been in relationships before with partners that were not financially abusive, but with whom I had an unhealthy financial relationship because there was a huge power imbalance financially and they definitely used it to their advantage. And if I had been able or been comfortable going to my friends at that time and just kind of laid the facts out. I would have had a friend kind of slap me in the face metaphorically and be like "Are you crazy girl?! Get away from that! Like that's a dangerous situation to be in because you have zero bargaining chips in this relationship and this person can control you financially." There isn't always a clear cut good and bad guy when it comes to the financial dynamics of relationships, but there are often behaviors or habits that are just unhealthy and need to be changed. And we don't realize them until we say them out loud to a friend and either see the look of shock on their face or hear ourselves really say the details of the situation.

You can't just talk to your friends over brunch about your sex life, you also have to talk about your financially romantic life. There are obviously plenty more financial topics to cover with your friends, but these 4 are a great place to start and remember that there's nothing worse when it comes to money than remaining totally silent because that's how we remain totally ignorant. I promise you, once you get over the fear of talking money with your friends, it'll seem just as natural as talking about anything else. So as always, thanks for watching and don't forget to hit the subscribe button and to go to thefinancialdiet.com for more. Bye!