Here’s How To Make Money Talks Less Awkward With Your Parents

Americans believe they need $1.27 million to retire adequately, according to a 2023 Northwestern Mutual survey. That estimate continues to rise, up from $1.25 million reported last year.

However, the median retirement savings for all U.S. working-age households — people 32 to 61 years old — is around $95,776, according to the Economic Policy Institute.

As a first generation American from an immigrant family, I found it really tough to talk about money with my parents as they reached retirement age because of the lack of transparency around their finances, and my lack of confidence in leading tough financial conversations.

Here are three tips to try your making money conversations less awkward — especially if you’re someone expecting to help support aging parents in conjunction with your own financial planning.

Share Your Own Money Journey And What You’re Learning Along The Way

My family often joked about how “cheap” my husband and I appeared to be because we drove a $3,000 car and didn’t eat out as often as they did. They assumed we were being overly frugal because we had well-paying jobs. But what they didn’t see was the daily stress we felt from having more than $300,000 of debt between student loans and two mortgages.

Many of my first-generation financial education students share feelings of guilt or shame for prioritizing their own decisions before their families because of the collectivist cultures they were raised in. However, when my husband and I quietly paid off $72,000 of student loans, our mortgage in our 30s and started a business, my family started asking questions about how we were accomplishing these goals.

I shared our net worth tracker, our budgeting routine and how our “cheap” choices were allowing us to achieve FIRE (financial independence, retire early) — a concept they had never heard of before. We didn’t talk about it much again until a few years later, and I learned my husband’s parents made extra mortgage payments and paid off their house. They reasoned that it made good sense to do so after seeing how our actions changed our lives for the better.

In hindsight, I wish I had spoken about our own finances with my family much sooner. But now we talk about money more openly and my in-laws feel more comfortable asking money questions because we shared details with them first.

Listen To Their Worries Before You Judge Their Money Habits

Even though I’ve been married into my husband’s family for 12 years, we never discussed our parents’ retirement plans. When my mother-in-law started contemplating retirement, I learned she was scared to retire. Her fear wasn’t without reason.

Despite having a financial planner for many years, my mother-in-law had no idea if she and her husband had enough money to retire. Federal Reserve data shows the median balance in a retirement account in 2019 for a household nearing retirement (ages 55 to 64) was just $144,000.

At first, I thought she was hiding financial information from us, but it turned out to be more about the fear of having worked hard for decades and still thinking they hadn’t saved enough money. She was also afraid to ask her financial advisor questions because she thought she should know the answers.

I also hadn’t considered that my parents were conditioned to believe that working equals worth. I witnessed my father feel a loss of identity in retirement, spending years looking for ways to still feel like he was valuable. Before you judge what may seem like irrational or illogical behavior from your parents, ask them what’s bothering them or where their money ideas came from.

You don’t have to agree with them or follow their lead. But by asking about their worries around money, it may help you empathize with how they choose to spend or save their money.

Lead Your Parents By Example And Plan Your Own Estate

The Baby Boomer generation is expected to leave more than $68 trillion to their millennial children over the next few decades. However, two out of three Americans do not have any type of estate planning document, according to a study by Caring.com.

I recently attended the funeral of a close family friend’s grandmother, and I later learned that the family really struggled to support the financial obligations that were left behind. The grandmother’s death also started to bring up conversations with the grandchildren about how they had no insight into their parents’ finances and whether they were expected to shoulder future health and living expenses.

Even though I’m relatively healthy and in my 30s, I insist that my husband and I review our estate plan annually, after my own father passed away with no documentation in place.

It’s not a fun exercise by any means, but the annual reminder to review all our assets and insurances also provides deeper review about the relationships that matter to us. It equipped me to have a more informed conversation with my mother, who still refuses to have any documentation in place.

I at least knew enough from going through my own plan to know what questions to ask, and write down the answers I received, even if they weren’t complete.

With the holidays and the new year approaching, you may not want to have full blown financial conversations with your family. But it doesn’t hurt to start opening up these kinds of discussions. Little by little, you can make money feel less awkward with your parents over time, and hopefully get the peace of mind you need to help support them and yourself in the future.