Financial Grownup Guide: 4 Tips for Financial Grownups to Talk Money with"Broke Millennial Talks Money" author Erin Lowry
Author Erin Lowry returns to the Financial Grownup podcast for an all-new interview focusing on the best ways to talk about money. She shares her tips on how to get your parents to open up about their financial situation, how to set boundaries with friends, how to get the information you need to negotiate a raise, as well as having tough financial conversations with your romantic partner.
Erin’s Talking Money Tips
Tip #1
Find out early if you're your parent's retirement plan. Ask leading questions, talk to your siblings and consider even starting an emergency savings fund for your parents if you think you'll need to financially support them.
Tip #2
Set boundaries with your friends (and family) when it comes to your money. That means sometimes saying no and offering alternatives. You can and should be honest about your "why". Are you paying off debt, saving up for a house, planning an epic adventure, considering starting a family? Whatever the reason, it's good to explain why you're turning down an invite in order to save money so that your friends don't just assume you're ditching them.
Tip #3
Learn to ask the appropriate people what they earn in order to help you negotiate!
Tip #4
Use goal setting as a basis for having tough financial conversations with your romantic partner.
get all of Erin’s books here : https://bookshop.org/shop/bobbirebell
Episode Links:
Erin’s website - https://brokemillennial.com/
Follow Erin!
Instagram - @brokemillennialblog
Twitter - @brokemillennial
LinkedIn - https://www.linkedin.com/in/erin-lowry-49674222/
Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.
FULL EPISODE TRANSCRIPT-
Bobbi:
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Bobbi:
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Bobbi:
Go to SplitIt.com today, that's SplitIt.com. Financial grownup guide. Four tips for financial grownups to talk money with Broke Millennial Talks Money author, Erin Lowry.
Bobbi:
You're listening to financial grownup with me, certified financial planner, Bobbi Rebell author of How To Be A Financial Grownup. And you know what? Being a grownup is really hard, especially when it comes to money, but it's okay, we're going to get there together.
Bobbi:
I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi:
Hey grown-ups, I hope everyone is enjoying the holiday season. This week we have an all-new interview with one of our most popular financial grownups, the author of the Broke Millennial series of books, Erin Lowry. For those of you new to The Financial Grownup Podcast, welcome.
Bobbi:
Here on the podcast, we interview successful role models, also known as financial grownups. Sometimes they share memorable money-related stories that we can all learn from, sometimes we have them educate us with what we like to call financial grownup guides as is the case with this week's guest.
Bobbi:
Erin Lowry's latest book, Broke Millennial Talks Money has just been released. I got a sneak peek at it, and I can tell you a lot of what the book covers really doesn't get talked about, which is ironic because the book is literally about talking about money, generally with people you care about, but overall with people you may or may not realize you are financially tied to.
Bobbi:
The friend that expects you to just bust your budget for her wedding, or the parent who doesn't want to talk about money until you find out you are their retirement plan. The truth is, while we can ultimately really only control our own financial decisions, our money is tied to decisions other people make all the time, like it or not. So it's important that we talk about it.
Bobbi:
On that note, I hope you enjoy this interview with Broke Millennial Talks Money author, Erin Lowry.
Bobbi:
Why this book as your third book?
Erin:
I think about how often the pain points that people have that they bring to me now is all about talking about money. Book one is, you're getting it together. Book two is, now I need to know how to invest, but the problem is you can have perfect financial health, but if you can't set boundaries in a healthy way, if you can't talk to other people about money, it's still all going to come crumbling down.
Erin:
So really the final pain point in a lot of ways is how do we actually navigate these often awkward conversations about money?
Bobbi:
So well said, okay. So let's go to your four tips. The first one has to do with your parents.
Erin:
So you got to find out if you are your parents' retirement plan, which is a loaded statement to make.
Bobbi:
How would you even? I mean, and at what point is this coming up? Is this when your parents are over a certain age, is it when they get their first social security check?
Erin:
The earlier the better at the end of the day? So kind of regardless of what age your parents are, if you are in a position where it makes sense, usually post-college, mid 20s to early 30s, that it makes sense to start having this conversation with your parents, please do so.
Erin:
Now obviously, a lot of parents are not just going to offer up this information. There's a few reasons. One, they might be embarrassed, two, they might feel it's none of your business or three, it kind of fundamentally shifts the natural parent child relationship paradigm, because it kind of feels like you're trying to parent your parents. So you have to be really careful about how you go about this.
Erin:
One of the easiest ways to ease in, is asking for their advice. Let's be honest, parents love to give advice. So in a way that feels authentic and natural to you and the relationship. Things like, "Oh, I recently got married and we're trying to figure out how to set up a will. What did you guys do?" Or, "Oh, I just started this new job and I'm trying to figure out how to plan and pick investments in my 401k. How did you guys handle that?"
Erin:
I mean, obviously they either work a job or they know that you know more about money than they do. Don't go that route. But using context of friends or family, Jackie's parents just moved down to Florida for their retirement, what are you guys thinking about doing? Just laying groundwork for general conversation to get some context clues early on is the best way to just start it.
Bobbi:
Is this better to do, and we're recording this obviously during the pandemic, is it better to do in person if you're living with them, or if you're not living with them, is it better to do it on a phone or on something that has like a Zoom call, where you can see the expression? Is it easier if you're not on camera sometimes?
Erin:
I think for some people it can be. I would be more encourage you to try to have it in some version of in-person, whether that's remotely in Zoom or whether that actually is in person, if it's safe, because you get a lot from facial expressions.
Erin:
And so you might not realize the potential, either anxiety or pain that certain questions could cause your parents, if you're just asking them over the phone without seeing their face. So I would encourage you to try to have it face to face. But if you get to a point where you can't, I always feel it's effective as well to write out how you feel. So that's writing a letter, writing an email and also expressing like, this is causing me a level of stress and duress. So this isn't just about, I'm not trying to upset you. I'm not trying to make you feel bad, but I'm never going to let you flounder.
Erin:
So it is going to impact my life. So I just want to be able to make a plan and it would make me feel better and more comfortable if we could talk about it.
Bobbi:
Okay. I have a lot more questions about that, but we have to move on, so everyone can get more about that in the book obviously. The second tip is about setting boundaries with your friends and family when it comes to your money.
Erin:
A big thing here is learning how to say no well, because we know we can't always keep up with every friend or every family member. And sometimes that's because, hey, they're earning more. And sometimes that's because our values are shifting, our life milestones are a little bit different, so we just don't have the same level of discretionary spending.
Erin:
But one thing that I always like to talk about is that if you just say no and let it hang, you're allowing that person to fill in a reason by themselves. We're naturally very self-centered creatures, they're probably going to think it's about them, not anything to do with you. So give them a reason.
Erin:
No, because I'm trying to pay off a student loan by the end of the year. And it's great to acknowledge the existence of debt with your friends. You don't have to say the number, just tell them that it's there. Or no, I'm saving up to go on this adventure. 2020 sucked and I'm trying to take an around the world trip in 2021.
Erin:
No, we're trying to save up for a home. No, we're trying to start a family, all of the things. But give them a reason. I also think it's great to do the classic kind of compliment sandwich counter. You know, "I love you. I want to spend time with you, but I don't want to spend $60 on bottomless brunch, can we get a big [inaudible 00:08:10] and go for a walk in the park?
Erin:
So saying no to something, but also offering an alternative, another great healthy way to set a boundary with your money.
Bobbi:
I love that and I always talk about the value of going for walks with people, because I think that's a wonderful way to connect. Even if now you have to do it six feet apart with masks on. Your third tip. This one I have a really hard time with, and I always have such an awkward conversation and you have some great advice in the book. The third tip is to learn to ask the appropriate people what they earn in order to help you negotiate. I mean, that's a hard one, Erin.
Erin:
It is so hard, especially because asking face to face, this is where I think email is great. Asking face to face could be really uncomfortable. And you might not feel comfortable in your job, in your actual office asking people, if you're a traditional employee, it might not feel like a safe move. So this is one of those times that we can turn to social media, especially something like LinkedIn, and just start emailing anybody that would be remotely relevant. Give them an example-
Bobbi:
Strangers?
Erin:
Yeah, absolute strangers, but they have to be relevant to similar cost of living, if not the same city, similar job title, similar type of company. Just emailing them to basically, "Hey, I'm either up for a promotion I'm trying to negotiate or I'm trying to look for another job. I feel like I'm being underpaid for X,Y,Z reason, if you want to answer. It would be really helpful for me if you could tell me how much you earn. And just shoot out a ton of those cold pitches, you'd be surprised, people get interested, and will probably respond. So, that's a good one.
Erin:
Another one too, is if you feel comfortable asking a coworker again, giving that groundwork of, "I'm coming in for a raise. I have a suspicion that either I might be underpaid or I'm trying to make sure that I ask for what I actually deserve. I think it would be really helpful for me in that process if you could tell me how much you earn."
Erin:
If they're uncomfortable with it, you can always go the over-under route. Could you just tell me if it's over under $50,000. And that's a way that they can tell you without expressly telling you.
Bobbi:
Let's say you do have this conversation with someone who's truly your peer at your job and started the same day and all that stuff everything's equal or our peer is equal. And you discover that one of you makes significantly more than the other. How do you handle that? I mean, you might be the higher earner or the lower earner.
Erin:
Well you have to think of a couple of factors. One, try to get a bigger sample size of just that one person, because are you on unearthing something systemic is the more nefarious option. Like, is there a reason that that person is making more? Is it a gender wage gap or racial wage gap? So being sure you're asking a bunch of other people for sample size.
Erin:
The experts that I spoke to for the book recommended three men and three women to try to control for at least the gender wage gap. And if you're a person of color, being sure to also speak to people of color, as well as white people too, to see if you can unearth a racial wage gap.
Erin:
The other thing is talking to your manager about ... I personally wouldn't necessarily name names, but it's come to my attention that I am not earning as much as other people who work here and I'm trying to get an understanding of why that might be, when it seems to me that we work the same job, same managerial roles, whatever it is.
Erin:
It could be stuff like, they negotiated harder when they came, it could be things like, they have a really tough client that we compensate them more for, or it could be, they have a particular skillset that they picked up, or it might be like, I don't know, let's find out.
Erin:
So you have to advocate for yourself. The other thing to consider, and this is going to play into another millennial stereotype, you usually make more when you hop to a different company, as opposed of trying to negotiate within your own.
Bobbi:
So true. I have found that always. I did hop a bit at the beginning of my career before settling for many years at Reuters. And I think it did help me make jumps in salary, so I think that's really good advice. The last one is something that kind of makes my stomach churn, because it's been really hard for me and that is having tough financial conversations with your romantic partner, because my husband and I have very similar values, but getting there, we have different ideas about how to get there sometimes.
Erin:
Oh, it's so hard and there's no one perfect answer. But one of the things that I really liked that almost everybody I spoke to to the book kept coming back to is this idea of going back to what your goals are when you're especially having a fight about money. And it's great that you guys have the same values because I do think that's also a big part of the problem for a lot of couples, is not only do we want different things, we value things in different ways.
Erin:
And so that really, you're very really fighting about the money, you're more fighting about the underlying value that could be taking types of trips and how we take it. It could be buying certain types of property or assets, it could be whether or not to have another kid. There's just so many other, that money is a part of it, but the underlying thing has to do with the value.
Erin:
I do think coming back to what is our goal as a couple and try to focus back on that and maybe that goal needs to be shifting and that's part of this conversation. But that's a great way to center these conversations.
Bobbi:
Do you recommend doing the money date that we always hear about with people, where you take out the wine and you sit down and you pretend it's a date that and you're having fun, but we know what's really going on?
Erin:
Listen, I get temptation bundling. Sure. Order from your favorite takeout place, open a bottle of wine, if that's what makes you feel good. I wouldn't drink too much if you're about to have like a heated money conversation, like maybe a glass. But personally, I think this just needs to be a natural part of your dynamic. Like at least once a quarter, if not once a month, you two need to sit down and just have a frank conversation about how things are going financially. And it doesn't always have to be this long involved conversation.
Erin:
For instance, most couples have one person that kind of operates as the chief financial officer. It's not a gender thing necessarily, it often has to do more with like, who's a bit more interested? And people might split. One person might handle bills, the other person handles investments, what have you?
Erin:
But you need to have a conversation, at least a check-in like, "Hey, here's how we are. We're on track for this goal and this goal, we're a bit off track for this one. What do you think?" Or, "Hey, I've been thinking about it. I kind of want to modify how we're putting money towards this goal. What are your feelings?" Just having those kind of check-ins.
Erin:
Everybody's a little different. If it works better for the two of you to open that bottle of wine or have that craft beer or whatever, bud light, if that's your thing, sure. But honestly, mine is usually just like a very frank 15 minute conversation after I've done a monthly net worth update. It's like, "Here's where we stand. Here's what we're doing. How do you feel?"
Bobbi:
Yeah and even with little things like one thing that was happening early in our marriage was that I would look for promo codes, whenever I bought something on the internet and my husband basically didn't really understand how important they were, and thought it was just a hassle. And once I showed him, like literally the receipts, it'd be like, "Look how much we saved."
Bobbi:
He got on board and now he'll proudly tell me when he finds a promo code, and then he also, the other thing that became fun that he got really into was he will put something if it's not on sale and he really wants it, he puts it, he makes sure he's signed in and then he puts it in the basket, and saves it and he waits for the coupon.
Erin:
Heck yeah.
Bobbi:
And he'll literally tell me, "Waiting for the coupon, honey." And I'm like "Good job." So I think that there's a lot of progress to be made and he's a champ now. So the conversations definitely can pay off.
Erin:
They can and I also really liked, one of the pieces of advice I got in the book was this idea of, it doesn't always have to be about a compromise. Sometimes one person can just "win", which sounds kind of like a bad way to put it. But the example given was if one wants to spend $1,000 on a couch and the other wants to spend $3,000 on a couch, you don't have to spend two, you could spend three. But then at another point, the person who wanted to spend $1,000 gets a win in another way.
Erin:
And I think that that's also a great way to think about this, is that it doesn't have to be constant compromise, it can also be like sometimes one person gets to take the win and then another time someone else does.
Bobbi:
Very well said. So the book is out December 29th.
Erin:
You can buy the book, all of my books. Now there are three of the Broke Millennials series, wherever books are sold. And please support small businesses right now. I Do want to kind of plug that out there? And you can also find them at your library and if you can't please request them. You can find me Erin Lowry at Broke Millennial Blog on Instagram, Broke Millennial on Twitter and brokemillennial.com is the website. And you can also sign up for my newsletter where you will hear from me more frequently.
Bobbi:
Thank you so much for coming back.
Erin:
Thanks for having me, always so fun to have these chats.
Bobbi:
Hey grown-ups, I had such a great time talking with Erin. I hope you guys liked the interview too. The stuff about setting boundaries really resonated with me. I'm curious what stood out to you? DM me, let me know. On Instagram, I am at bobbirebell1.
Bobbi:
Also, big announcement here, I am going to start doing a lot of giveaways in 2021. Books from authors that we have on, merchandise that we're going to be creating just for the Financial Grownup community and a lot of products that are on the Grownup list.
Bobbi:
Now to be eligible, you need to be on the Grownup list. Just go to my website, bobbirebell.com to sign up for free so you don't miss out. Again, the website just my name Bobbirebell.com and sign up for the grownup list. Big thanks to Erin Lowry for once again, helping us all be financial grownups.
Bobbi:
Financial grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.
get all of Erin’s books here : https://bookshop.org/shop/bobbirebell
Episode Links:
Erin’s website - https://brokemillennial.com/
Follow Erin!
Instagram - @brokemillennialblog
Twitter - @brokemillennial
LinkedIn - https://www.linkedin.com/in/erin-lowry-49674222/
Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.