Robert Leonard (00:02:14):
When it comes to personal finance, investing, and just really money in general, it can be somewhat of an awkward conversation to have with other people. So not really many people talk about it openly. Experts, gurus, they teach about money strategies to implement how to do certain things better. But there’s really not many people that are teaching about how to deal with these types of conversations around money, which is why I was so excited to have this conversation with you. Admittedly, it’s something that I haven’t really thought much about. I’ve just kind of not talked about money with people. So I’m excited for today’s conversation. And that’s where this idea of money scripts come in. What exactly is a money script?

Erin Lowry (00:02:54):
I think it depends in what way you’re looking at it. So for my third book, money scripts are literal scripts about how to like, “Hey mom and dad, do you have enough money to retire?” Type conversations. So I actually have scripts to use throughout the entire book when you’re navigating these talks. But in a broader sense, money scripts are also a term that gets used in financial therapy, specifically Dr. Brad Klontz, who’s a financial psychologist talks about money scripts in that we all have ways that we relate to money and have emotional experiences to money. And for some people, that feels a little like woo woo. Yeah okay, whatever. But truly, money is an emotional experience. And we have to acknowledge that. Because if we don’t, we’re failing ourselves for the way that we’re going to need to set up certain systems, have conversations with people, understand that the person you marry might have a completely different emotional relationship to money. So the way you want to handle money isn’t necessarily what’s best for him or her. And acknowledging all of these emotional relationships with finance is really critical to laying a foundation to our financial lives.

Robert Leonard (00:04:03):
In your newest book, your third book that you mentioned Broke Millennial Talks Money, you talk about four main money scripts. One with your friends, parents, coworkers, and your partner. Let’s walk through each of them. The first one is how to tell your friends that you can’t afford the same lifestyle they can. And I added a caveat to this by saying or what your friends think they can afford. Because it’s not always that they can actually afford it, but they think they can. And it goes back to the Keeping up with the Joneses idea of they’re in debt. They’re going into all this debt just to keep up a facade of an image. But let’s talk about the money script around telling your friends that you can’t afford what they think they can. How do we handle this situation?

Erin Lowry (00:04:44):
For one, you’re right. There’s a difference between your friend’s funding and their pretending that they can afford a lifestyle. But also, it’s a very real lived experience that we age and people get different job careers. People take different life milestones steps at different times. So the level of discretionary spending money becomes very different. And we have to be able to have conversations about all of this.

Erin Lowry (00:05:07):
And the other caveat to this is value sets. So it might be we work the same job. We make the same amount of money. We have kind of the same financial profile of hypothetically we’re both married, but no kids. We live in the same city. But if your value sets are totally different, that’s also where this can be a pressure point. And kind of a classic example of you take a trip together. One person wants to fly first and stay in this nicer hotel. The other person wants to just take a ZzzQuil, knock themselves out, fly economy, and stay at a budget hotel. Neither party is wrong, but that can be an awkward financial conversation that you have to have.

Erin Lowry (00:05:45):
Now when it comes to communicating about it, it depends on the scenario. Now if you’re the person who either doesn’t have as much or seemingly doesn’t have as much, and you have to be setting those boundaries with your friends, the first thing I encourage you to do is be honest. Because sometimes, we have this tendency to lie. And instead of having the awkward conversation of, “You know what, I really can’t afford to go to this dinner and split this bill with everybody? Because I know I’m going to have that side salad and water.” And in this classic scenario, all of a sudden I’m stuck with an $80 bill. It’s uncomfortable to say that. But if you don’t, the question is are you going to be resentful and/or embarrassed, and which emotional feeling can you tolerate for a longer period of time?

Erin Lowry (00:06:29):
But the other thing is being honest, upfront. And instead of saying, “Oh no, I can’t come to your wedding because I have to work,” when that’s never been an issue before, that’s going to hurt your friend’s feelings. Now, if you say, “Listen, I love you very much. And I would love to be there to support you at your wedding. But you’re getting married in Austria, and I have six figure student loan debt. I cannot afford that plane ticket.” And I say that as an example, because it’s an actual example used in the book with a woman that I interviewed. But that woman instead of telling the truth at the time lied to her friend and said, “Oh no. No, I’m sorry. I have this big work meeting coming up at that same time. I just can’t. I can’t do it.” And it really hurt her friend’s feelings because the context wasn’t there.

Erin Lowry (00:07:12):
Now later when it came out that she had had six figures worth of student loan debt, her friend’s like, “Oh my God, why didn’t you tell me? I would’ve totally understood that.” Now will there be people in your life who don’t understand and are still being selfish? Sure. Are they going to be your long-term friends? Probably not.

Robert Leonard (00:07:28):
And that example that you just gave, the friend feels like you’re choosing work or something like that over their friendship and something that’s monumental to them. Something ideally only happens once in a lifetime, and you’re choosing work over that. And it’s not the case. It was something else. And I think that’s a really important piece. And then you mentioned two examples that hit very close to home for me, they’re very relatable. And I think it’s often not just what you can and can’t afford. I think it’s what you choose to afford. Like you said, it’s your value set. And this reminds me of what Ramit Sethi teaches in his book, which really has impacted me. It’s what do you want to spend your money on? For me, I couldn’t care less about food. When I go out to eat, your prime example, I always order an appetizer and water almost every single time, because I don’t really care that much about food. But I spend a ton of money on dirt bikes. And that’s just how I choose to spend my money.

Robert Leonard (00:08:18):
One of my best friends, my travel buddy that I traveled the most with, he’s a huge foodie. So everywhere we went, he wanted to go to all these super fancy restaurants. And for me, I just didn’t care about that. I wanted to go sightseeing and spend money on doing all these other things. So we never clashed, but there was always a little bit of tension there. And I never knew how to really handle that situation.

Erin Lowry (00:08:36):
Those are really hard because it’s very complicated to express how you value your money without it coming across like you’re somewhat condemning the other person’s choices on how they spend money. So my first recommendation is never to start with, “Well, I don’t value that.” Because it really comes across super judgy. And we don’t want that to be how our friend feels. Instead, it’s focusing more on, “I really understand that you want to go to this fancy restaurant. So when we look at the trip that we’re taking, how about I come with you to one restaurant, but you come with me to one of the events that I want to do that maybe normally wouldn’t be your thing?” So you’re each trying something that the other one likes. “But I got to be honest. I really in my budget don’t see seven nights of going to fancy restaurants working. So are you okay with us splitting up and me doing some of my things, and you doing some of your things?” So it doesn’t come across as a judgment. It acknowledges the fact that, “Hey, we like some different things. I’ll do one of yours. You do one of mine.” But whatever you do, you don’t want to be like, “Well, I don’t value that.”

Robert Leonard (00:09:40):
That’s pretty much exactly what we ended up doing. And then there was times where I would just get takeout or something super cheap. We were in Vegas. This is just an example. We were in Vegas, and I got something super cheap like a slice of pizza. And I was good. And he wanted to go to a fancy restaurant. I ate my pizza outside, and then I just sat at the table and didn’t order anything. I still hung out. I still had the experience. I just didn’t order any food and hung out with everybody else that was with us.

Erin Lowry (00:10:02):
And the other thing to consider, depending on what the moment is, what the friendship dynamic is. If you’re somebody who really wants to do something your way. So let’s just use the restaurant for example. You just got great professional news. Your favorite way to celebrate is to go out to, let’s say, you’re going to go get Omakase Sushi. It’s going to be $150 per person, but that is how you want to celebrate this. And you want your best friend to come. And you know your best friend is like eh on sushi. You pay for them. If it’s that person you want to celebrate and you are not willing to compromise on the way you’re going to do it, pick up the bill. But have that conversation ahead of time. “Hey, I got this great news. I finally got the promotion I’ve been working so hard for. I really want to go celebrate. I want it to be with you, but I want to go to this restaurant. I know it’s not your favorite thing. So I’m going to pick up the tab. I don’t want to talk about it. I don’t want to debate about it. Because I don’t want to compromise on what we’re doing and I know it’s not your jam. So let me just get this bill.”

Erin Lowry (00:10:56):
That’s also a way to have that conversation without your friend feeling like, “I can’t afford it.” Or it also doesn’t come across like I know you can’t afford it, so I’m going to pick it up. It’s like no, I’m doing this just because I don’t want to compromise. So I’m going to pay for it.

Robert Leonard (00:11:14):
And also just make sure that you tell them that there’s no expectation for them to pay you back. You’re not going to hold it against them. You never expect them to repay you for it. It’s just something that you want to do because it’s something that you truly care about.

Erin Lowry (00:11:26):
Right. And you want to celebrate with that person for what have you reasons.

Robert Leonard (00:11:31):
Potentially one of the most awkward out of the four main concepts you talk about is the one with your parents. Or at least that’s the way I think about it. I might consider the fourth one to be a tie with this one. And we’ll get to number four in just a minute. But this one with your parents is certainly tough. How do we ask our parents if they can afford retirement and if they’ll need our support as they age?

Erin Lowry (00:11:54):
The first step is not to ask like that. Which is I love for the fact that that’s really what the chapters are titled. It’s not like, “Hey mom and dad, can you afford to retire?” Because that is not a tactful way to go about this. It depends a lot on what your relationship with money is, what your parents’ dynamic with you is. And I say that because if they know that you are somebody who’s listening to these kinds of podcasts, consuming personal finance books, you have your money on lock. You talk about it all the time. This piece of advice I’m about to give you is not going to work. The best way to start is to ask your parents for advice. Parents love giving advice.

Erin Lowry (00:12:29):
So something simple like, “Hey, I just got a new job. I’m setting up my 401(k). I’m feeling a little stressed about which investments to pick. How did you guys figure that stuff out?” They say something like, “Here’s what we picked,” or, “I don’t have one of those,” or, “I don’t worry about that. I have a pension. I didn’t have to think about it.” You get context clues from their answers. But it’s going to ring really untrue in and authentic if they know that you definitely know what investments to pick. So that’s not the way you want to handle it if that’s your scenario.

Erin Lowry (00:12:57):
Another way to do it is just start a general conversation. “Hey mom and dad, my friend Jackie’s parents just retired, and they’re moving into a retirement community. And I was just curious if you guys have even thought about what you want to do in retirement.” Just a general conversation opener.

Erin Lowry (00:13:12):
I do want to put out the disclaimer. For every conversation that we talk about today, none of them have to reach a resolution immediately in that first time you bring up the conversation. These all can be evolving conversations. So the first time you try to figure out if your parents financially are set to retire, you do not need to leave with an itemized checklist of here’s all their estate planning paperwork. Here’s how much they have. Here’s where all that paperwork actually exists. That’s going to stress everybody out. It’s okay if the first talk is just, “You know what, we really haven’t thought much about retirement. I don’t really know what we’re going to be able to afford.” Or, “Yeah, we know we for sure want to move to this smaller house in this community, but we’re still close enough to you guys and the grandkids. So we can kind of have our own fun little life in retirement, but still be close enough.” Or maybe, “It’s none of your business.” And that’s the big, scary thing is if you keep trying, and trying, and trying, and it keeps being it’s none of your business.

Robert Leonard (00:14:05):
That first one, I think is a great point. But like you said, it would not work for me. I host a podcast. I also worked at a credit union for three years. So my dad reaches out to me all the time almost every single day with banking questions. So I certainly could not get away with that strategy. So I know exactly what you’re talking about.

Erin Lowry (00:14:23):
Now if you’re in the situation where either it’s a none of your business or it’s just the slow and steady first, “What are you guys thinking?” And then, “Okay, well, based on what you guys are thinking, do you feel financially set?” And that might be where you get hit with the, “It’s none of your business.” There’s a few different ways to handle that, one slow and steady. Just every once in a while, bringing up a question and seeing what they say. “Hey, do you guys have a will? I’m not asking for me, I’m asking because I want to make sure things are going to get handled the way you want them to get handled.” Or, “Hey, I know we have a history of dementia in our family. And I know this is a stressful conversation. But I got to be honest. I need to know if you have advanced healthcare directives and a power of attorney. Because if something were to happen, I legally need to know that I can step in to immediately provide help. And if you don’t have that paperwork done, we might have to go to court.” I don’t like the manipulation guilt tactics with parents. But on the same token, if they will not engage with you, it’s important to be honest about this is causing me stress and anxiety. And here is why. And detailing that out for your parents.

Erin Lowry (00:15:27):
Now if it just keeps beating you up against a brick wall, you can take matters into your own hands in the sense of start an emergency fund for your parents. You start setting money aside. You probably have a good gut sense about what their financial situation is. And if you’re pretty positive you’re going to need to financially support them, start planning for that now. Do not wait until it’s actually an issue. Start putting aside money every single month. Maybe you’re investing for it because it’s a bit more long-term. Maybe you think you’ve only got a couple of years and you’re going to be a little bit more conservative. Talk to your siblings about that. Have a conversation with them about what they can afford to contribute. And collectively start a savings account or an investment account with your parents in mind.

Robert Leonard (00:16:07):
What do we do if they’re open with us and they just say, “We can’t afford a retirement. It’s a stressful situation for us. We know we can’t afford it. We don’t know what we’re going to do.” How do we handle that? Do we plan to handle that ourselves because they’ve given us so much throughout life, or do we try and help and teach them so that they can try and get their own footing?

Erin Lowry (00:16:27):
That needs to be a mixed and open conversation. You can certainly sit down and look at their finances. If you’re not qualified to do that, perhaps buying them a meeting with a certified financial planner, somebody who can look at all of the information and tell them, “Hey, with these couple of little tweaks, over the next 10 years, you’re actually going to be in an okay place. Or you can afford to drop down to part-time, whatever it might be.” But having somebody else as an objective third party can be a really helpful tool in actually starting these conversations. Definitely having them meet with an estate attorney so that they can get all the paperwork for estate planning handled, notarized correctly, all of that stuff.

Erin Lowry (00:17:06):
But if you’re pretty positive that no matter what happens, they’re running low on time to be able to put enough money aside to comfortably retire. Odds are, I don’t mean this in any sort of burdensome way, but it’s going to be on you. Very few of us would actually let our parents flounder. You’re going to provide some level of support. Whether that means they move in with you. Or maybe emotionally, the relationship wouldn’t be great if they lived with you. Looking at other options for where they could live, figuring out ways to offset those costs. And definitely start talking with if you have them, siblings early on about how that’s going to go down.

Erin Lowry (00:17:41):
Because the other thing to consider, especially if you get married or siblings get married, what about other sets of parents? There may be a siblings who already has to financially support in-laws. So then they also just aren’t in the position to support in-laws, their immediate family, and your parents. But perhaps they can provide more of the daily emotional support, driving parents to doctor’s appointments, shoveling the snow when it snows. All of those kinds of day-to-day tasks may be something that they can pick up.

Erin Lowry (00:18:09):
There also doesn’t have to be one way that it gets handled through the duration of your parents’ retirement, and pardon the expression, twilight years. This again can be an evolving, changing conversation and process.

Robert Leonard (00:18:22):
How do we approach these types of conversations with a sibling? It isn’t one that I had really considered much before we talked. I didn’t even really do much research into this before our conversation like I did some of the other money scripts that we’ll talk about. But if you have siblings that just aren’t good with money, they just don’t care about money. How do you approach that situation? Whether they be older or younger, how do we help them?

Erin Lowry (00:18:46):
One, you have to decide when you’re willing to financially support a family member. Particularly a sibling who seemingly has the ability to go out and get a job, do that kind of work. The thing about loaning money especially to family members and friends, I think you should only loan money that you are comfortable never seeing again, financially will not impact you if you don’t see it again. And mentally, you can reframe it as a gift. Because if not, you are really setting yourself up to permanently damage your relationship.

Erin Lowry (00:19:18):
The other part too is if your sibling just falls on a temporary hard time and you want to provide money to support them, maybe it’s for something really specific. Like you make their car payment so that they can actually get around and apply for jobs, or you pay their gas bill, or you pay for a part of rent so that they don’t lose housing. Or you pay specifically for groceries. You can pay for certain items, whether we’re talking parents or siblings, so that it doesn’t feel like, “Hey, I just keep giving you two grants. But then I see you posting on Instagram that you took a trip and went to a concert. So hello, how is this working?”

Erin Lowry (00:19:50):
That’s the other reason I say if you’re going to loan people lump sum, mentally reframe it as a gift. Because they’re still going to live their lives. And if they’re going to Starbucks and you’re feeling like, “Hey, you still owe me 500 bucks.” You need to be able to release that feeling.

Erin Lowry (00:20:05):
You also like with your parents can offer to provide some other form of support to a sibling where it’s like, “Hey, I would love to have you meet with this certified financial planner that I know to sit down and talk about your whole financial picture.” Because you nagging at them time, and time, and time again probably is not going to work

Robert Leonard (00:20:23):
Outside of just giving them money whether it be a loan or a gift, how can we help them just get on the right path? What if you know they have a good job, they have a good career, they’re doing well. They’re just not good with managing their money. Whether it be buying cars they can’t afford, going on trips they can’t afford, just spending above their means, what they make. How do we help them at least get on the right path without coming off as judgy or just overstepping our boundaries?

Erin Lowry (00:20:51):
I often say in those scenarios one, you just keep modeling good behavior and assume that they’re seeing that you’re modeling good behavior. And two, only really provide answers when asked. It’s not helpful, especially with family dynamics like that, for you to be like, “Can you really afford that car? What’s your car payment? Can you really afford that?” Instead, if they make a comment about feeling stressed about their finances, that’s the door that’s just been cracked open. You’re like, “What’s stressing you out? I just feel like I have so much debt.” “Well, what kind of debt do you have? I actually paid off X amount. I don’t know if you knew that. I’m happy to help walk you through how I set up a debt repayment plan if you want.” Just offering that kind of support.

Erin Lowry (00:21:32):
Or they start a new job. That’s a door opening for you to be like, “Are you contributing to your company’s 401(k) plan? I don’t even know if you knew, but they might actually give you free money if you contribute to this plan. I’m happy to help you set it up because I know it can feel really overwhelming at first. When I first did it, I didn’t know what I was doing.”

Erin Lowry (00:21:50):
So being vulnerable in that way, and only really trying to give advice if it’s solicited or if the door gets cracked open for it a gentle way you to provide some sort of insight. Because otherwise, it’s just going to feel like you’re constantly judging their choices and decisions, and that might make them rebel even further in a particular kind of way.

Robert Leonard (00:22:10):
I’m really curious to hear your opinion on this next question. Because it’s something that I’ve thought about a lot myself personally the last I don’t know, two or three years probably. And it’s around this idea of buying books that you enjoy. We listen to podcasts. A lot of times you’re a reader. You’re interested in these topics. We’re reading about these books. I’m a big reader. How do you feel about gifting personal finance, investing books? You can talk to one group of people and they say it’s the worst idea ever. You could talk to other people. They think it’s a great gift. Where do you fall on that?

Erin Lowry (00:22:42):
As somebody who’s written three, I love when people gift personal finance books. I get a lot of messages from people that are like, “Oh my God, I love your book. I bought it for all of my siblings and for my best friend.” Now if you’re going to do that, I love it. But I would customize why you’re giving it to them.

Erin Lowry (00:22:59):
So just last night, I was talking to a friend of mine who was like, “I actually just gave my sister your investing book because she just started a new job and was asking me a lot of questions about how to start planning for retirement. So I just bought her a copy of your book.” Things like that where there is again, this door opening, this foundational reason. Or if it’s Christmas time, listen, my books are all called Broke Millennial. It can be a gag gift to be honest. But the other thing is write little notes, put little post-its in sections. “Hey, when I was your age, I read this book. It truly changed my life and how I think about money. Here’s my three favorite sections of this book. I put them on a little post-it note for you. I hope you enjoy it.”

Erin Lowry (00:23:43):
And then don’t pester them about it. Because I think that’s the other part is people then start to try to quiz their siblings on, “Have you read it yet? Did you get to this part? What have you done? Has it changed anything for you?” They’ll get there. Give them time.

Robert Leonard (00:23:57):
So for me, I typically have fallen in the camp of buying books for people. I typically over the last three, four years have done that. I’m a huge book collector. I listen to a lot of audio books, but I still collect physical books and I have a little personal library downstairs. Probably have 250 or 300 books. So I like giving them to people. And to your point about previous conversations opening up the opportunity to do that, my brother who’s a little bit younger than me, I’m 25, I’ll be 26 in two days. He’s a little bit younger than me. So he’s 22, 23. And of course, he gets really wrapped up in these hyped up stocks, if you will. And he got really pulled into Tesla. And I don’t invest like that. A lot of people who listen to the show know I’m a value investor. I follow Warren Buffett. So I don’t follow those types of companies at all. So I told him that.

Robert Leonard (00:24:44):
So for Christmas, I bought him this book called, The Education of a Value Investor. He had opened that conversation with me because we talked about Tesla and investing. So I bought him this book to help teach him on how to be a value investor. I don’t know if he’s read it. I doubt it he has a month later. But at least that conversation, that opportunity to give him that book was opened by him previously in a conversation we had had previously. And also, I never gift just a book. I gift the book just because I want to, but I always get them a normal gift that is unrelated to the book.

Erin Lowry (00:25:15):
And that’s a nice way to do it too. I think also adding any sort of inscription about why you’re giving it to them, that being a perfect example of, “Hey, we had this chat. I just wanted to give you a book that really informed why I became a value investor.” Now next Christmas, maybe he’ll give you one about how to pick hot stocks, and we’ll see what happens. But it is a really nice way to also show that you are just thinking about them in a particular way and not like, “Hey, I’m just trying to get you to come over to my side.”

Robert Leonard (00:25:44):
Yeah. And as he opened it, I told him, “I got you this because of our conversation about Tesla.” So he knew. And I think for me, a big piece is that it’s not a replacement of a gift. Like I said, I always get them whenever I would get them anyways. And then just kind of get the book on top of it. So at least they’re not feeling gypped because I chose to get them a book. In a work environment, at least in every one that I’ve worked in and that I’ve heard about, it’s typically frowned upon to talk about salaries. How do you recommend we talk about it with our coworkers?

Erin Lowry (00:26:14):
Well, I would love for it to be a very open, honest conversation. But as you just mentioned, there are some workplaces where it is frowned upon. In the United States, it is typically illegal to fire somebody for asking others about salary. However, they can always manufacture another reason to get rid of you. So that is one big thing to consider.

Erin Lowry (00:26:35):
Now you need to first understand your workplace dynamic. Is it comfortable for you to ask other people how much they make? Now let’s say that it is. You’re in a super open workspace. Great. You can talk to other people about it. How do you actually ask is usually the big question.

Erin Lowry (00:26:54):
So one, the who. It’s great to ask people who do your current job, have the same title that you do at the same company, somebody who just got promoted out of it, or somebody that hires for that position. Now if it’s the person that hires, you’re asking them their salary. You’re asking what is an appropriate salary for said position? There’s a bunch of different scripts that are in the book about how to ask. One of my favorite is, “Hi. I want to talk to you about salary because,” insert your reason. Going in for a negotiation, asking for a promotion, get the sense I might be getting underpaid. “Would you feel comfortable telling me if you make X or the ballpark over under? Or just bluntly could you ballpark your salary for me?”

Erin Lowry (00:27:38):
The other nice thing about that script is if you’re working in an environment where heck no, you definitely cannot ask anybody. You can take that script to LinkedIn and start cold emailing people who do similar type work in the same or similar city at the same type of company. You want to control for as many of those factors as you can. Because if you’re working in New York City, you shouldn’t be emailing somebody in Boise because cost of living is so different, salaries should also be different.

Erin Lowry (00:28:03):
So then you can just start cold pitching people, give them reason for why you’re asking. “Hey, I think I might be getting underpaid compared to the men in my office. I think you have information that might be helpful for me. Could you tell me a ballpark of your salary? I’m happy to follow up and tell you what happens.” Sometimes, piquing people’s curiosity can help. Email 30 or so people, because you’re probably only going to get a handful of responses. The negotiation experts in my book talk about trying to get at least three men and three women as sort of a control for potential disparities for various reasons. And if you’re a person of color, making sure that you’re reaching out to both people of color and white people as well. Again, trying to control for getting information that might show in the racial wage gap.

Robert Leonard (00:28:46):
When it comes to our boss at work, how do we negotiate with them? How do we handle the potential negative repercussions of trying to negotiate? Because I think that’s what most people are worried about. I think most people are probably okay, and willing, and muster up the courage to actually talk to their boss about the conversation. But I think they’re more worried about what could happen afterwards, what are the negative repercussions that could come from this. How do we handle that and how do we negotiate?

Erin Lowry (00:29:12):
Well in terms of negative repercussions, a lot of that depends on what you’re asking for and how you’re asking? I mean, you don’t want to be threatening about anything when you’re going in to talk to your boss. Even if you’ve uncovered something like a wage gap that is significant.

Erin Lowry (00:29:27):
There’s a story in the book from a negotiation expert that truly kind of feels like an urban legend. And she had a client that she was working with who found out that a couple of people at her rank in the company were making about 10,000 more per year than she was. And you’re like wow, that feels like a lot. So this woman goes into the talk to her boss and didn’t go in guns blazing. Just, “Hi, I’ve come across some information that I just want to have a conversation about. I have found out that there’s a bit of a wage discrepancy between me and a couple of my coworkers by about $10,000. And I’m curious if you could explain why that exists.” Didn’t go in accusatory. Just asked the question. He was like, “That’s strange, because they have a scale, and you shouldn’t be that far off it. Let me check into it.” It turns out there had been a typo in the payroll when she got hired. So they just corrected it, gave her back pay, and she was paid fairly from then on. It sounds so silly, but human error does happen. So first, do not go in guns blazing. Have an open conversation.

Erin Lowry (00:30:31):
Now if you’re just going in to negotiate, because you’ve worked at this company a long time, you feel like you deserve a raise and/or promotion. So there’s no wage gap issue, anything else that you’re feeling. It’s just time. A couple of things. One, make sure you time it correctly. Because sometimes people wait until annual reviews to get in the room and be like, “Hey, I want a promotion. Or I want a raise.” At that point, might be too late. Budgets might have already been set. Decisions might have already gotten made. So figure out when your company tends to offer raises and promotions, and then backwards plan. At least three or so months out from that time, ask for a meeting with your boss, express interest in your raise and/or promotion, and ask for constructive criticism that you can demonstrate why you earn this. “Hey, what can I do to earn this raise? What can I do to earn this promotion?” Then go out and do it, and then you can demonstrate I’ve done this. So that’s one of the big ones.

Erin Lowry (00:31:26):
The other one, practice negotiating. And I know that that sounds so silly. But for traditionally employed people, you don’t actually have a whole lot of option for negotiation. Now for self-employed people like myself, we’re negotiating usually several times a month with clients. So you get to work that muscle a bit more. I would say for us, it’s more important to be asking other people who do what we do how much they make. Because there’s no Glassdoor, salary.com, or anything for us. You have to go out and talk to other people about rates.

Erin Lowry (00:31:54):
Back to the negotiation bit, there’s a bunch of tidbits in the book about different strategies. But one of my favorites is this idea of silence is golden. Now this is not like Jack Donaghy, 30 Rock of don’t talk first. Because I asked a couple of negotiation experts about them. You always hear don’t talk first. And most of them laughed and said, “I mean, I hear why people say that. However, if you’re asking for a raise, you usually have to ask first. You have to bring up the conversation.” But silence is golden. You want to ask, make your ask, and then be quiet. Because a lot of people get uncomfortable in about three to five seconds of silence. So instead, if you can just sort of outlast the other person and they start filling in the air, that’s where you start to get a bit more power in the negotiation room.

Erin Lowry (00:32:41):
But practice that. Go to a coffee shop, order a coffee at the end of the day and ask, “Hey, since you’re probably about to throw out all those pastries, could I have one 50% off?” And then just see what they say. Or negotiate your cable or internet bill. Or if you’re going shopping, ask for a 5% discount just to ask. Just situations where fundamentally if they say no, it’s not the big deal. But you start to get practice.

Robert Leonard (00:33:05):
I think that’s a sales tactic too is letting the other person talk. State your claim or whatever it is you’re going to say. And then just kind of sit there in silence. I forget where I read it. It might’ve been Grant Cardone or some other sales books. Maybe even Think and Grow Rich or one of those 7 Habits of Highly Effective People. One of those. But yeah, it definitely does work. And I do that in my life. I tend to state my case, and then just sit there, and let the other person talk. And if you wait just a few seconds, usually they’ll be the one to speak next.

Robert Leonard (00:33:30):
And I can actually attest to the typo in HR software. Because as of this recording, when we’re recording this now, I’m leaving my corporate job in four days. So once this comes out, it’ll no longer be the case. But about probably a month or so ago, I saw my paycheck change. And I was kind of confused because I’m paid salary, nothing had changed. It’s been literally to the penny every single week, the exact same for the last year. So I was like, “Why did that change?” So I reached out to HR and there was a typo in the HR system, and it changed it. And that’s all it was. It could be something as small as that and the same as your story.

Erin Lowry (00:34:07):
Yeah. And so important to advocate for yourself in those situations, and not just assume that you’re wrong. Because I think that’s what we do sometimes is we see it and like, “Well I must have I don’t know changed the tax form, or maybe tax code changed.” Or I don’t know, something’s different. Whatever. Advocate for yourself.

Erin Lowry (00:34:23):
And the other thing too with the negotiation that I really liked, one of the experts made the point of saying I want, as opposed to I deserve which sometimes can sound too strong. Or I would like, which can be a bit more wishy-washy to say, “I want a $10,000 raise.” Now you can also fill in why you think you deserve it. But saying I deserve a $10,000 raise, that might get the hackles on your boss’ neck to go up. They might get a little defensive. And I would like just might sound a little to wishy-washy. So that’s some of the actual language too, that she recommends using.

Robert Leonard (00:34:58):
We have made it to the fourth main money script in your book. And this is the one that I said earlier might be as awkward or as difficult as the one with our parents. This is the one with our significant other, girlfriend, boyfriend, whatever it may be. I’m currently single. So I haven’t been through this situation. But it is something I’ve thought about and wondered how I’d approach it if and when the right person comes into my life. Before we get into the exact money script, explain to us what a prenup is. And then explain how we start a conversation with a significant other about a prenup.

Erin Lowry (00:35:35):
Prenuptial agreement is, and I’m talking really from the American perspective on this. Obviously, they vary a little bit depending on where you live. But a prenuptial agreement is an agreement that you signed prior to getting married that basically outlines the division of assets in the case of a divorce. That’s the easiest, cleanest version of what a prenup is. Technically as I’m about to get on my soapbox about why I think they’re super important and everyone needs to talk about them, technically everyone has a prenup, it’s just the default laws of your state. So then the question becomes, do you want to actually create a prenuptial agreement that outlines what the two of you feel is fair within reason and legal for your relationship, as opposed to just defaulting to whatever state laws would say would happen to the money in the case of a divorce?

Erin Lowry (00:36:26):
I think that prenups are an incredibly valuable tool with a terrible reputation and branding problem. That is my big issue with them is they just need a really top notch brand consultant to come in, zhoosh it up a little bit, change some public perception. Because this should just be kind of a default contract that we do where we sit down and have a reasonable conversation with, “If something were to happen in our marriage and we were to end up getting divorced, what would we decide is fair? What do we think right now is fair to us?”

Erin Lowry (00:36:56):
If you have a business partnership with somebody, or if you signed a business contract, there’s conversation about what would happen if the business were to dissolve. The fact that marriage has so many financial and legal implications in your life and you’re expected to just sign on the dotted line without knowing the terms and conditions is very stressful to me.

Robert Leonard (00:37:16):
It is for me too. That’s why I’m glad that we’re having this conversation. And actually BiggerPockets, one of their shows BiggerPockets Money, this was a long time ago. Probably a year or two. They did an episode on it and it was really, really good. So I recommend anybody listening to this goes back and finds the episode that they did on it. I’ll try and put it in the show notes if I can find it. But it was really good.

Robert Leonard (00:37:35):
When it comes to a prenup, is that only things that are pre-marriage? Because I think that’s the conception of it is I have a million bucks right now. We’re going to get married. I don’t want you to take 500,000 from me if we get divorced tomorrow. Because it sounds like it might be more guiding even throughout the marriage.

Erin Lowry (00:37:52):
It can be guiding certain things that happen within the marriage as well. And what could happen in a divorce. For instance, you can have a prenup that waives alimony. So depending on circumstances, if anything happens during the course of the marriage that could potentially void that prenup, that’s a whole different conversation. But you can do things like waive alimony. Or you can do things such as, “Hey, we’re getting married. You have student loan debt. I’m going to pay it off right after we get married. But if you divorce me the next month, you owe me back that money.” So you can have provisions in there for certain things that would happen within the marriage. However, it is pretty typical that it’s protecting the assets brought in. It’s not uncommon that people agree to split 50/50 or whatever feels reasonable during the marriage. And then after the divorce, it might be either a no alimony. Or in my case for instance, I do have a prenup. One of the things are I’m fine to split book revenue that’s earned during the marriage. But if we get divorced, you don’t forever have a right to royalties that I earn just because I created that book while we were married. So it’s things like that too, that can kind of protect yourself on the back end as well.

Robert Leonard (00:39:02):
Are there ways to start this type of conversation early on in a relationship so that it’s not a surprise when it arises? From what I’ve heard, it’s not really the idea itself that’s off-putting. It’s more that it’s just a surprise when it gets brought up. It’s a surprise to somebody. So how do we manage that dynamic of talking about it early on so it’s not a surprise, but also not talking about it too early?

Erin Lowry (00:39:27):
That’s a great question. I wouldn’t be talking about it on dates two or three. I would be in a slightly more committed relationship. But there’s so many media and pop culture ways to get into this conversation. Because there are times when celebrities have dramatic prenups or dramatic divorces. That’s an easy entry point. You might listen to a podcast on a road trip that talks about a prenup. That’s an entry point. There’s ways that you can just sort of bring it up. Or if you’re getting to the point where you’re moving in together or you’re getting serious with one another and you think it might end in an engagement or a marriage, go ahead and bring it up. You can start with just a general question without even saying the P word of, “Hey, if we were to get married, what do you feel is a fair way to handle our assets coming into the marriage? And then also, if anything were to ever happen and we were to ever get divorced, what feels fair to you about how we would handle money in that situation?” I don’t even have to say the prenup word yet. Just kind of bring up the conversation.

Erin Lowry (00:40:25):
I do like the idea of slowly bringing it up over time. Because the other thing you have to recognize is you’re contending with a lot of religious and cultural feelings around the prenup document. A lot of people have feelings about A, it’s just a divorce contract. It’s going to doom your marriage. If you’re even thinking about that now, why would you possibly get married? To that I say, and that was the big eye roll in case you’re not watching the video. First of all, I would like to rebrand it marriage insurance. That feels like actually a more appropriate way to position a prenup. Do you hope you never have to use it? Absolutely. But if you’re going to have to use it, will you be glad it’s there? You sure as heck are.

Erin Lowry (00:41:05):
Same with you don’t get into your car assuming you’re going to hit somebody. But if you do, you’re glad you have auto insurance. You don’t have homeowners insurance because you’re pretty sure your house is going to burn down. You have it just in case something bad happens. Same with the prenup.

Erin Lowry (00:41:19):
The other great perk of the prenup is you have to talk about all these super nitty gritty financial details. What stronger way to go into a marriage than to have all of these financial conversations out in the open? Now that assumes that it is an equal conversation and not one party trying to force the other party into signing a prenup. So the last thing you want to do is wait until a month out and then come to your partner and be like, “Hey, my parents won’t let us get married unless you sign this prenup.” Also, it’s pretty easy to void in court if they had to sign it under duress. Just throwing that out there for you.

Erin Lowry (00:41:50):
I am also just a big fan of them because of all of the conversations you have to have, the protections that they can outline. And the fact that so many people have these complicated feelings because they will say, “I would never ever leave my partner. No matter what happens, no matter what they do to me, I will never leave them.” And for whatever reason, that might actually be true. But you cannot control another human being. Your partner can leave you. And that is one of the things that I feel is critical to consider when we’re talking about a prenup is even if you are committed till the end regardless of how that person treats you or your children, they can always walk out the door as well. And you need to make sure that you’re protecting yourself. And if you didn’t get a prenup, you can also talk about a postnup. Or even if you did have a prenup, it also might make sense to have a postnup at certain points. Because your life changes. So particularly if one person does something like step out of the workforce to raise kids, you absolutely should have a conversation about how that impacts both of your financial situations.

Robert Leonard (00:42:49):
Erin, I think we have a business opportunity here. I’m going to go back and get my JD and I’ll be on the lawyer side and you and I can just rebrand. We’ll create divorce insurance. We’ll make it an awesome thing.

Erin Lowry (00:43:00):
I’m all about it. So I think the prenup is so important . O at the very least, and the other thing I will say to people, it’s expensive. And I totally understand why, especially if you’re getting married young and you don’t have many assets to speak of. I can understand why you’re not going to have one. Again I say have the conversation so that a postnup in the future doesn’t feel like you’re teeing up your partner for a divorce. But at the very least, download a prenup template. The 60, $75 it would cost to download one of those from one of the online options. And go through the conversation. Talk about every point that they tell you to talk about. Even if you don’t sign it at the end, didn’t get it notarized and do all the things to make it legal, at least you’ve had so many of those conversations. And that is really, really important.

Robert Leonard (00:43:48):
The hard part with it is it’s really an emotional and psychological problem combated with a logical problem. Because I think if two people are in the right emotional state in their right minds, maybe they’re both single at this time. And you’ve talked to them about a prenup, I think most people would probably agree that they’re a good idea. Then you get involved and you have emotional and psychological impacts that are playing in and having this dynamic. And now, it’s a whole different situation. Like you said, I’ll never leave this person, or whatever the situation is. And now you’re not thinking logically. So I think there’s this battle between emotions and logical thinking.

Robert Leonard (00:44:21):
And for me, I agree. I think it’s super important. Like I said, I’m single. So I haven’t had to worry about this. But it is something that eventually as I meet the right person, and I’m curious as to how I’m going to go about it. Because I don’t want to talk about it too soon. Like you said, two to three dates. Nobody does. But then again, I think anybody listening who’s single doesn’t want to waste too much time with somebody if it’s not going to end up working, because you’re going to have issues like that. So I think it’s like if it’s not going to work and you can’t come to an agreement, how do you not waste time?

Erin Lowry (00:44:51):
The other part too is explaining to a partner why it’s important to you. The first time I brought it up, my husband who was my boyfriend at the time, we weren’t even engaged yet was kind of like, “I don’t know, aren’t those just for rich people?” Which is usually the very common answer. Or, “I don’t know, that just doesn’t feel great to me,” was sort of the other bit. And I tried to investigate that. “What about it feels icky to you?” “It feels like you don’t trust me.” All those kinds of common answers. So I took time, months and months and months of occasionally bringing it up and explaining my side. I deal with a lot of contracts all the time for work. To me, it feels very similar to that we would want to both be protecting ourselves and our interests. And this has nothing to do with love and trust and everything to do with we’re making a legally binding agreement. And I feel like why are we doing that without customizing it to our situation? And just explaining why it made me feel better.

Erin Lowry (00:45:48):
And also explaining that like, “Hey. Hypothetically, if we did get divorced, no matter whose fault or even if it was a totally amicable thing, those can get heated. I can get vindictive. I am protecting you from future Erin in the case that we got divorced.” That is part of how I framed it in my mind and to him. That we’re setting this contract up at a point where we’re very much in love. We want to be generous with one another. We want to be fair to one another. As opposed to dragging out a divorce, and slinging mud at each other, and going through all of those insane legal fees. You think a prenup is expensive? Divorce is expensive.

Robert Leonard (00:46:29):
I wonder, and I don’t want this to sound like blackmail. But I wonder if there’s almost a way to be like, if somebody is against it, almost say to them, “Listen, now when we’re on good terms is the right time for me to do this. Because if we do get into issues, I’m probably going to be a little bit different of a person and might not give you as good of a deal that I would now when we’re on good terms.” And it almost sounds like blackmail to me or trying to force that person into this agreement. But I mean, it’s the reality, right? When you’re on good terms, you’re likely to be more logical or forgiving and give more to that person or compromise. Whereas if you’re fighting and just divorced or things aren’t going well, you’re not going to do that for them.

Erin Lowry (00:47:09):
That’s true. And the other point too is pointing out assets that they do have that they might not be thinking about. Because so often, again with the prenup people think I have to have a certain amount of net worth, or I have to be in some sort of wealthy family situation, or what have you. And you’re not necessarily thinking, “Hey, you have a pension. Or you have a 401(k) plan.” And oftentimes, retirement accounts end up getting gutted in a divorce. So a prenup could protect the fact that I get to keep my retirement and you get to keep your retirement, and we’re not hurting each other’s financial futures in the case of a divorce. So you do have assets you’re bringing into this. It’s not just like I’m just starting out and I don’t have a ton of money.

Robert Leonard (00:47:50):
I think you could probably also just help relieve stress in a relationship. Because one of my next questions was going to be about how money is just one of the number one causes of divorce or just relationship problems for non-married couples. You’ve already talked about all these big things. So if you already have that, like you said, you’re bringing up all these things. You already have those settled, set aside. You’ve agreed. Now you’re going into the relationship completely open, and you don’t really have to stress about money ,and you can worry about all the other things that matter.

Erin Lowry (00:48:19):
You can. Now will there be money fights and moments? Of course. I literally wrote a book on how to handle money conversations. That does not absolve me from getting into the occasional tiff with my husband about how we handle money, how we relate to money. But I agree so much, to me, a big value of the prenup is getting it all out in the open. You have had the hard conversations.

Erin Lowry (00:48:37):
No matter how logical and practical both of you are. I also want to set the expectation that there will be fights coming out of a prenup discussion. Partly because it gets emotional. As logical as you are, it gets emotional. You are asking questions that sometimes feel like this way out there, hypothetical scenario. But you’re required to think them through in the case of a prenup.

Erin Lowry (00:48:58):
For instance, if you were to inherit some money from a family member, no matter how modest, and that money is used as a down payment on a home when you’re married, do you each have equal right to that home, or do you have more right to that home because it was your inheritance that was the down payment to buy that property, but when you were married? You have sometimes to go down these very hypothetical wormholes where then you start to get defensive and territorial about things that might not ever be an issue.

Erin Lowry (00:49:24):
But that’s not dissimilar to the actual process of getting married. That you will have fights about things that aren’t necessarily a red flag about your relationship. It’s just truly this heightened, emotional experience. And you fight about these stupid things that really at the end of the day, it’s just that my family feels this way and your family feels this way. And it’s not so much us getting mad at each other. It’s us defending certain family ways of doing things and getting territorial.

Erin Lowry (00:49:51):
The best piece of marriage, well not marriage, but wedding advice I got from a friend was you’re going to have stupid fights that are just stupid. They’re not about your relationship. They’re just stupid wedding fights that outside the wedding vacuum do not matter. Now, there can be other underlying issues that you’re fighting about that are worth addressing. But sometimes, it’s just a stupid fight

Robert Leonard (00:50:13):
Outside of just a prenup, how do we manage that dynamic of managing everyday money with a partner? When it comes to just everyday money things, if you have different value sets like we talked about with the friends. Or just one partner overspends. Your wife is spending too much money on shoes, or I’m spending too much money on dirt bike parts. How do we manage this dynamic?

Erin Lowry (00:50:35):
The value sets is so important. The odds of you both being 100% aligned on your value sets and your relationships with money are very slim. There’s going to be some points of friction that exists in the marriage dynamic. And also because you change. You might have an interest that starts to manifest 15 years from now that you didn’t have when you got married, that requires money that of a sudden your partner might be like, “I don’t want to spend that kind of money on you having this particular gym membership to train for a triathlon.” Things happen.

Erin Lowry (00:51:05):
So first of all, you need to talk about what method of managing money makes the most sense for you as a couple. I think so often, people default to joint. Totally joint. That’s how we should handle money. That’s how married people handle money. That means we love and trust each other. This is what we have to do. This is what my parents did. This is what we’re doing.

Erin Lowry (00:51:20):
Listen. For some people, that makes a lot of sense. That’s how they’re going to handle their money. Or maybe it’s second marriage for both parties. Totally separate is what makes us feel good. This is how we want to handle it. Maybe it’s first marriage and you’re still like, “Listen, I want to be totally separate. You pay for this. I pay for this. This is how we’re handling it.”

Erin Lowry (00:51:40):
My personal favorite in the strategy we use is a hybrid method. We set our financial goals together as a married couple, as a team. Our financial goals get prioritized. So bill payments and what we’re saving and investing for in the future. We put most of our money into one joint thing. Then that goes into the savings, into the investments to pay the bills. But then we each have our own checking account in just our own name, where we put our I hate to say this word allowance. I need to find a better branding term for it. Fun money, blow money, discretionary spending money. There’s a bunch of different terms. But we each get a chunk of change every month that we can spend however we want. We can save it. We can spend it all. It’s also in a checking account with just our name on it. So the other person is not nitpicking at how that money is being spent.

Erin Lowry (00:52:28):
I do feel like it is important especially if you get married a little bit older, to be allowed some level of autonomy in some of your spending decisions. So that would be your dirt bike money. Or if you’re married to somebody who likes shoes, that’s their shoe money. My husband is really into shoes. So that’s his shoe money. He wants a pair of Jordans, it’s coming out of the allowance money.

Erin Lowry (00:52:49):
The other big thing to consider when you’re getting into a money fight, it’s going to happen. I love the idea of using your goals as a couple as the compass of those fights. Coming back to the idea of your goals, do they still fit right? Is this what we’re prioritizing? And if so, whatever we’re fighting about, how does that fall into place with these still being our main points of interest? And using that to kind of come together on common ground and then have the discussion.

Robert Leonard (00:53:19):
We talked about it briefly, briefly earlier. You mentioned that there are times when one person in a relationship brings significantly more debt to the relationship than the other person does. Could be student loan debt, could be credit cards, maybe even just a car loan. How do we manage this situation?

Erin Lowry (00:53:37):
Needs to be a conversation before you get married first of all. And speaking from experience, I came into the marriage debt-free. My husband came in with a little over $50,000 of student loan debt. And I had known about this. We had been together for eight years and three days when we got married. So I had known about for seven years. And nothing was a surprise. The amount wasn’t a surprise. None of it. A lot of it though was conversations leading up to how do we want to handle this as a married couple?

Erin Lowry (00:54:07):
He manifested what I would call ownership mentality in the beginning. Years before we were even engaged when we would talk about it, he felt very much like, “This is my burden. I’m bringing this in. I’m going to handle it.” My husband is a public school teacher. Your salary alone is not going to absolve us of this debt on a quick timeline. I want to pay it off quick. So what can we do that feels good to both of us so that it’s getting paid off on more of a rapid clip, but you don’t feel like I’m just swooping in to save the day and paying them all off?

Erin Lowry (00:54:40):
We had a lot of different iterations. But as we got closer to being married and then actually as we got married, one of the shifts that I made is I changed my language. I said our student loan when I would refer to it, as opposed to yours. So that was one thing that to me, was a way to show to him I think about this as a team thing. It is technically just your name on it because I did not co-sign on it. Yes. But to me, this is something that we are dealing with together. Because we are now a team working towards paying this off so that we can now pursue also other goals. Mind you, we were still investing and saving for other things. We did not exclusively focus on the student loans. I think that you should be balancing that in with investing and saving for other things.

Erin Lowry (00:55:23):
So that’s one of the ways that we handled it. The other thing is I feel like so many people get weirded out with my partner has debt, I don’t. Especially, I’m very debt averse. So I hear you. I see you. You’re my people. But is it a red flag if your partner has debt? Not necessarily. Where did the debt come from? How long has the debt existed? Are they paying it off? If the debt is student loans, that is what it is. Let’s be honest. Not everybody is in a privileged situation to have school paid for either through scholarships, or family, or what have you. If it’s credit card debt, how did that exist? Was there a medical issue that came up a couple of years ago and they had to pay for it on a credit card because that’s the only way they could pay?

Erin Lowry (00:55:59):
Was there an auto accident that they had to finance on a credit card? Something just happened, and it got on a credit card? Maybe they used to have a shopping addiction and they’re now handling it, and there’s a debt payoff plan. And everything looks good now. Those are all hey, it’s in the past. We’re dealing with the present. We’re paying it off. That to me is not a big red flag.

Erin Lowry (00:56:18):
If they’re consistently putting themselves in debt and there’s no plan to get out of it. And every conversation you have with them to try to get them to take it seriously fails. That’s when it’s A do you want to deal with this for the rest of your life conversation.

Robert Leonard (00:56:32):
That last piece is exactly what I was going to say is how they came into the debt is definitely important and something that needs to be considered. But the other very important piece of it is how are they thinking about it now? Do they think it’s an issue? Are they trying to get better? Is it a focus for them and they want to get better and improve on this? Or is it something that they don’t see as a problem and they’re just going to continue doing it? And if it’s the latter, then like you said, you need to decide if that’s going to be right for you in the term.

Erin Lowry (00:56:57):
And also be really honest with how hard it is if you’re constantly fighting about money. And even if you got married, what is the longevity of that marriage? Is something that is such a huge part of your life is a constant battle with your partner.

Robert Leonard (00:57:12):
We talked earlier quite a bit about us dealing with our parents. But now, I want to talk about one of the last relationships that I think is important to have money conversations about. And that’s with us flipping it, with us as parents. A lot of people listening to the show are millennials. Probably don’t have kids yet, but may in the future. Some might have young kids if they’re a little bit older millennials. How can we prepare to have conversations with kids as they grow up so that money isn’t a taboo subject in our house?

Erin Lowry (00:57:41):
Well speaking openly about it, but also in a way that doesn’t lead to what would be called financial enmeshment, where you are projecting financial stress onto your child, where you’re telling them too much information, especially depending on their age. It’s really important that you think reasonably about what they should know. If mom or dad loses a job, should they know? Yeah, they should. But should you say, “I’m not sure we can pay the mortgage next month”? No. What you can say is, “Mom lost her job. So we just want to be really careful about how we’re spending money. And one of the ways that you can help us right now is anytime you leave a room, turn the lights off. It helps make sure we keep our electricity bill where it should be. And that is one way that you can help with us right now.” So something like that, where the kid understands that something is going on, but you’re not making it a stress factor. And you’re giving them something actionable that they can do to help.

Erin Lowry (00:58:34):
The bigger thing too to recognize, you can say all the nice things about how to handle money. But what are you demonstrating to your children? Are the two of you fighting about money in front of them? Are you fighting behind closed doors and they can still probably hear you? Is it clearly a point of stress? Do you say things to them like, “We can’t afford that”? Even if it’s true, that’s probably not the most helpful language to use. Instead talking about, “Well right now, that actually doesn’t make sense because we’re prioritizing XYZ.”

Erin Lowry (00:59:05):
Another example, I once wrote an article about ways to talk about kids at different ages. And I loved this example. A woman from her childhood, she now researches how to talk to kids about money. But when she was a kid, her dad brought home in cash how much money he made in a month. So he had it in cash and put it onto the table, and then physically put the amount that goes towards the house into one pile, how much they pay for food in another pile. And did all these little piles down to the end that was sort of the indulgences pile. And just visually demonstrated to his children, “This is how much we have when you want to go out to dinner. When you want a new pair of shoes that aren’t necessary,” or what have you. And it was a way for them to visually understand okay. Even though I feel like they have all of the money, this is how much we actually have for the like ‘fun’ things. That’s another idea.

Erin Lowry (00:59:57):
But at the end of the day, the important thing is modeling healthy financial behaviors and talking about money in a healthy way so as not to pass on stress, not pass on perhaps negative financial scripts that you inherited from your parents. And ultimately, and I hate to say it this way. You’re going to screw them up somehow. You’re not going to be flawless in this. All of us are going to mess up our kids in our own special, unique way. But you just hope that maybe whatever inherited financial trauma you have, that you can course correct. And you can maybe minimize what gets passed on to the next generation. But it’s also okay that you’re not flawless at this. We’re all going to mess up sometimes.

Robert Leonard (01:00:37):
Erin, thanks so much for joining me again on the show. We haven’t had a conversation like this for an episode yet. I know I really, really enjoyed it. I can’t wait to hear what the audience thinks. Where can everyone listening go to learn more about you and what you’re working on?

Erin Lowry (01:00:52):
Well, you can find me on Instagram @brokemillennialblog, on Twitter @BrokeMillennial. The website is brokemillennial.com. All of the books are available wherever books are sold. But the most recent one that’s all about this stuff is Broke Millennial Talks Money: Scripts, Stories, and Advice to Navigate Awkward Financial Conversations. I will put in a plug to please consider supporting your local bookstore. And if right now you don’t have the money in your budget for the book, consider checking your library.

Robert Leonard (01:01:19):
I will put a link to all of Erin’s resources and her new book in the show notes below. I know I’ll be picking up a copy to read through. Erin, thanks so much.

Erin Lowry (01:01:29):
Thank you for having me.

Robert Leonard (01:01:31):
All right, guys. That’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro (01:01:37):
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