How to talk to family about money over Christmas

Whether you're discussing budgeting, inheritance, or debt, having open and honest financial conversations can strengthen relationships and create the supportive environment to make informed decisions.

With Christmas coming up, you'll be spending lots of quality time with loved ones and the informal setting and lack of work and school distractions could be the perfect time to broach a difficult conversation.

In this blog, we'll explore practical tips and strategies for approaching the money talk with your family, ensuring these discussions are constructive, empathetic, and ultimately beneficial for everyone involved.

In summary our top tips for talking about money with your family are:

1. The right time and place

We said Christmas could be the right time to talk about money because there should be a time when you're all feeling relaxed, have time and you can sit somewhere comfortable.

If people are sensitive about financial chats, consider scheduling a time to talk rather than springing it on your family unexpectedly.

2. Be honest and transparent

When raising your own financial goals and concerns, consider explaining the reasons behind any decisions or changes.

This will allow the other person to see things from your side and understand your motivations better.

Vicky Parry, of MoneyMagpie, says advises people to ensure they have their facts straight before jumping into a conversation to be able to look at things logically.

She told the Mirror: "For example, if you’re in debt, be honest about what you owe and how you ended up in this position. If you want to talk to a partner who you think is in debt, approach them with the facts you have and plenty of compassion.

"Either way, have a plan to tackle the debt together before you speak: having practical steps to hand will help everyone feel supported and avoid negative emotions like blame."

3. Speak simply and listen with empathy

Ms Parry's advice above supports this next point as well.

Different family members may have different levels of knowledge when it comes to finance so using simple and clear language will mean they don't get lost, frustrated and disengaged.

When it comes to talking to your partner, if they don't want to speak about money, MoneyHelper suggests three tips:

Make it easier for your partner. MoneyHelper says: "If your partner feels budgeting is too much work or is worried they won’t be able to stick to it, you won’t be able to sell the idea to them. Perhaps come up with a basic budget that covers all the main things, then talk about how you’ll spend the rest of your money. Don’t forget to include some items that both you and your partner can enjoy. Show your partner that budgeting isn’t about going without everything you enjoy."

Put your discretionary spending money into cash. MoneyHelper says: "When it’s gone, it’s gone, and there’s no nagging involved."

Avoid the blame game. MoneyHelper says: "Try to tell your partner that this conversation isn’t about who’s good and bad with money, but how you can achieve your goals together. This is particularly important if you don’t want your partner to feel judged for their spending habits. Feeling judged can leads to defensiveness, which won’t help you get the most from the conversation."

4. Create a plan for the future - together

If someone is in debt, the worst thing you can do is make them feel alone.

And if you're wanting families to make a sacrifice, or come up with what could happen with inheritance, getting everyone involved in the same room will mean no one feels left out or blindsided when the plan needs implementing.

If you're likely to be a beneficiary and want to discuss estate planning, remember that what they choose to do with their money is their choice. Inheritance is not a right. But it's important to know they do have a plan in place. Consider starting a conversation around wanting to ensure their wishes are carried out, and leaving them with the space and time to think about what you've discussed rather than putting pressure on them.

When it comes to saving for big expenses you know will be coming, like Christmas, "the solution lies in the planning" according to Antonia Medlicott, managing director of Investing Insiders.

She told NimbleFins: "Christmas should be woven into your annual budget, regardless of the type of budget you use.

"For example, families following the 50/30/20 rule (50% needs, 30% wants, and 20% savings) should have an amount allocated for Christmas in advance which should come out of the 30% wants category.

"What’s important is to ensure that you sit down and plan this together, so everyone is on the same page. I would recommend getting this agreed prior to the Christmas period to avoid arguments.

"It’s important that children understand that Christmas is more than just a retail glut and that January will be much improved if you don’t overspend in December."

5. Discuss financial responsibilities

After your transparent discussion, you can now assign roles to people within the household.

Perhaps someone is going to look at comparing utilities providers for a cheaper deal, or another is going to open a joint account to save money for your holiday fund.

Whatever it is, consider scheduling regular check-ins to review the family budget and progress.

6. Seek professional advice if needed

If you have complicated matters to deal with a financial advisor could help.

For those in debt, you can talk to Citizens Advice, National Debtline or Stepchange for support.

Approaching the conversation with openness, patience, and understanding can help ease the stress and make the discussion more productive. Remember, the goal is to foster a supportive environment where everyone feels comfortable talking about money.

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