Family finance: How to talk about money

Insights from the Ameriprise Financial Family Wealth Checkup study that could help ease family tension and improve your financial confidence.

Key Points

  • While many families discuss day-to-day finances, deeper discussions are often neglected.
  • Estate planning matters can be particularly difficult to initiate, but the effort pays off.
  • A financial advisor can help ease discussions by providing a neutral third-party perspective.

Do you feel uncomfortable discussing topics such as life insurance needs, health care costs and education financing with your parents, your kids or even your siblings?

If so, you’re not alone. According to a new Ameriprise Financial study, the majority of Americans approach family money talks with a similar sense of apprehension. But many of them forge ahead and talk things out anyway. The result? Increased financial confidence and improved family relationships, according to our research.


Conversation starter checklist

  1. Start discussions early and don’t wait for a life altering event
    9 in 10 adult children who have discussed estate planning say a life altering incident triggered the talk with their parents. Don’t wait until a family tragedy to bring up finance.
  2. Have an estate plan in place
    It’s important to have written instructions of your wishes, such as a will or trust, and be sure your beneficiaries are up to date across all accounts.
  3. Tell loved ones where to find important documents
    Family members should know where important documents are located, including how to access online accounts.
  4. Work with a financial professional
    A financial advisor can help families understand their full financial picture with a customized approach to fit their unique needs.

What we talk about when we talk about money  

Families tend to avoid complex or uncomfortable financial planning topics in favor of more immediate issues. That’s particularly evident when it comes to parent-child relationships.

Adult children talk to their parents about:

infograph on what children talk to their parents about

Parents talk to their adult children about:

infograph on what parents talk to their children about

Communication and confidence: What’s the link?

A total 63% of respondents report feeling extremely or very confident about their family’s financial futures. And those people are more likely to have frequent family conversations about:

  • Long-term financial goals
  • Retirement planning
  • Inheritance/estate planning

Where do they get their confidence?

A healthy balance sheet certainly helps. The most confident respondents are Baby Boomers with between $500,000 and $5 million in investable assets. (By contrast, the least confident are Gen Xers with less than $500,000.) But there are other factors. Those self-assured Boomers also tend to have financial advisors and formal financial plans. What’s more, they’ve taken tangible steps to prepare for their futures:

  • 68% have completed a formal will or estate plan
  • 71% have identified a third party to execute their will and/or administer their estate
  • 65% have completed a living will or health care directive

Legacy matters

It’s no surprise that estate plans can boost financial confidence. Having one in place can wipe out a huge burden of worry — for parents and children alike. It also can help families navigate some of their most challenging money talks. According to the survey, 33% of adult children haven’t discussed inheritance or estate issues with their parents. As for why, respondents’ top reasons are telling:

  • 34% don’t believe it’s their place to raise the issue
  • 21% say it might be uncomfortable or lead to tension
  • 18% don’t want to think about losing their parents

In short, it simply feels like an awkward and even upsetting topic to bring up. But as the survey also reveals, that perception is off the mark. Parents and children who have discussed estate planning overwhelmingly report the experience was positive. Here’s how respondents described the conversation:

  • Straightforward (adult children: 87%; parents: 71%)
  • Comfortable (adult children: 86%; parents: 69%)
  • Easy (adult children: 84%; parents: 69%)
“As these results indicate, many of our conversational barriers are self-imposed,” says Marcy Keckler, CRPC®, CFP®, vice president, financial advice strategy at Ameriprise Financial. “Kicking off a talk might seem difficult and even intimidating. But if you approach matters in the right way, it can turn into a constructive experience for everyone involved.”

Work with an advisor

When it comes to dealing with the unexpected, a financial advisor can help navigate the complexities at hand. And as the study found, that assistance can prove particularly effective if family members all work with the same advisor. “Respondents say that a shared advisor can understand the full scope of the family’s issues,” Keckler says. “On one hand, it allows an advisor to customize a strategy with the family. Just as importantly, however, it also can provide family members with a common, neutral starting point for money discussions.”   

An Ameriprise financial advisor can help ease the way for multi-generational money talks by providing a neutral third-party perspective and offering tangible, attainable solutions.