Married couples tell each other a thousand things without even saying anything. So many families stay together under the same roof not realizing how missing out on daily conversations has refrained many to share their life’s details with their loved ones.
There are so many matters that must be discussed, there are so many issues left ignored – so much so that it feels like we are living among strangers. This behavior can be attributed to a deep aversion to discussing money matters in many Indian families. Labeled commonly as the “Money Taboo”, the disinclination to share investments, financial successes, and problems seems deeply rooted in Indian culture.
It is not enough to dine together. It is more important to take out the time much needed to boost your loved ones’ confidence in you so that they feel free to discuss their financial decisions and worries with you.
The “International Families Day 2023” observed on May 15 every year reminds one and all of the importance of being one with the family. The concept of “family” must not be relegated to paper alone. “Regular conversation” is the key to continue finding value in relationships.
To corroborate the idea of both family and finances, Sripbox, a digital wealth management company carried out a survey of 1000 Indian families to understand their levels of financial engagement and where they lack in the same. The survey report shared how only 70 percent of the respondents, aged above 35, discussed their money matters with their families.
There can be lots of reasons attributed to many people not being willing to discuss their finances within their families. The survey results outlined how roughly 24 and 23 per cent of the people surveyed kept mum on their finances owing to fear of judgment or criticism and lack of financial literacy, respectively. That ignorance and fear can impede financial discussions in family circles are facts that cannot and must not be disregarded and paid attention to.
While discussing how family and financial discussions go hand in hand, Atul Shinghal, Founder & CEO, Scripbox said, “In times of crisis, while our general tendency is to refrain from sharing, I would always advise making the family aware and letting them participate as family expenses are borne by all. While one or two people might be earning, making sure that the family is aware and in agreement with financial decisions helps us be better prepared for the future.”
When it comes to budgeting and expenses or making big purchases and putting money into new investments, not all like to participate. Survey results highlight how only 65 per cent discuss their monthly budgeting and expenses, 50 per cent of the families come together to make big purchases, and only 49 per cent of the families put their heads together while deciding on new investments.
However, many families today now realize the importance of increased co-participation while working on a financial plan. There is a better understanding of current finances among at least 56 per cent of the families surveyed, 54 per cent has shown more ability to meet financial goals while 51 per cent realize that discussing money matters promotes trust among family members.
While participating in financial discussions helps further knowledge about money matters concerning investments, 78 per cent of the respondents feel that mere discussions and co-participation may not help in weathering an unforeseen storm or tackling financial problems.
Interestingly, around 60 per cent of those surveyed, confirmed that their families are privy to details about their investments accounts, passwords, bank accounts, and insurance policies. This hints at how the Covid-19 pandemic has helped people realize their mortality and made them understand the importance of offering alternative access to financial information.
To this, Shinghal added, “What’s truly positive is the increased understanding among 40-year-olds on the importance of discussing finances with their families, and it’s translating into a better preparedness for volatility. But there is also the need to address financial literacy and the stigma that is still hindering families from making better financial decisions.”
The realization that nothing serves better than the family has dawned upon many people to date. Around 90 per cent of the respondents admitted to being impacted as a family in more than one way, by the overall economic uncertainty. Roughly, 27 per cent revealed how discussing with the family impacted their family expenses, whereas 30 per cent admitted how financial discussions made them more conscious about their savings.
“One must share their financial details with their family members as life is full of uncertainty. Just to give how much the situation may turn horrific, the unclaimed deposit with the bank is around ₹48,000 crores. The same is the situation with insurance, stocks, and mutual funds. In fact, many family members are unaware of the life insurance a family head is holding. Hence, if someone does not share such vital information with the family, the family may suffer huge financial trauma. Considering all these aspects, I strongly suggest all must share their financial details with their family”, says Basavaraj Tonagatti, a SEBI-registered investment advisor and founder of Basu Nivesh.
On a positive note, approximately 80 per cent of the respondents believe they are well-equipped to ensure their family’s well-being, thus, hinting at their confidence in dealing with money matters, a skill limited to only a few people or families to date due to lack of financial literacy.
No matter how high a tree goes up, you will find its fallen leaves on the ground. The truth of mortality may hurt, but it serves best to realize the need to keep your family members in the loop when it comes to your earnings and decisions surrounding your savings and investments in the long run. After all, your home is where the heart is.
