Finances Are Straining Relationships, CFP Board Says. Advisors Are Stepping in to Help

Can we change the subject?

Some 83% of Americans say they’re comfortable talking about money with at least one person. However, most remain silent when it comes to admitting financial struggles to the people closest to them, which can ultimately lead to plenty of relationship strains, according to a new report from the CFP Board. “Too many Americans are carrying financial stress alone,” K. Dane Snowden, CFP Board CEO, said in a statement. “That quiet burden can affect relationships, confidence and the ability to fully show up.”

While advised clients are less likely to deal with financial strain than the DIY crowd, wealth managers are paramount in helping clients navigate money conversations with their loved ones. “The important thing to understand in these discussions is how to frame questions that open clients up, or at least give clues in body language or tone of underlying issues,” said Andrew Fincher, a CFP with VLP Financial Advisors. Any deviation from financial goals including significant cash flow deficits can open the door to understanding tensions or omission of financial struggles, he told Advisor Upside.

The Root of Problems

Some Americans choose to be homebodies, (are you binging the new season of The Pitt on HBO, too?) but others feel stuck at home because of their financial situations.

The CFP Board report found:

• Just over two-thirds of people have declined social events in the past two years primarily due to costs.
• Some 30% turned down trips with friends, 23% missed family holiday gatherings and 13% have skipped weddings to save money.

More than half never told their loved ones the real reason why they’ve missed important life events.

Let’s Chit Chat. Even when people try to have uncomfortable, honest conversations about money with their loved ones, things can go south pretty easily without a professional advisor. About 30% of Americans said the conversations significantly strengthened a relationship, while 12% said it actually made things worse, the report found.

“Some money taboos are cultural rather than generational, meaning they won’t disappear on their own,” Kevin Roth, managing director of research at CFP Board, said in a statement. “Comfort discussing money doesn’t guarantee skill in navigating these conversations.” He added that professional financial guidance can provide the structure, neutrality and long-term perspective to help turn potential conflict and uncertainty into productive planning that strengthens relationships.