Discussing money with loved ones is asking for a loaded conversation. Money is basically about relationships and it is nearly impossible to be in love without money playing a role. A new book by Stanford professor emeritus, Myra Strober, who is an early feminist economist, and ‘social innovation leader’ Abby Davisson called Money and Love: An Intelligent Roadmap for Life’s Big Decisions explores how to navigate the crossroads of finances and human bonds.
I had the pleasure of talking to Professor Strober this week on Zoom. I sat in my teensy New York kitchen and she in a study with the Palo-Alto sun streaming on colorful couch pillows.
I asked her, “In a world full of financial planners, more schooled in financial products and tax law than economists, what can an economist offer about financial planning a financial planner can’t?”
Polite Professor Strober nearly rolled her eyes and I thought I blew the interview. “I wrote the book because I am an educator.” Her own life experience and those of her thousands of students made her realize people made life decisions without understanding how budgeting and financial plans can be derailed by clueless relationships and the best relationships can be derailed by financial miscommunication and ignorance.
Indeed, Davisson and Strober’s book spans the life course: from the time you move into together, choose careers, and decide to be parents to the moment you discuss your mother’s retirement plans and move your spouse to memory care.
The part of Money and Love about cross generational conversations was uncomfortable, like a good teeth cleaning is uncomfortable. The necessary questions to ask your aging parents seem a little cringy. Strober acknowledges the costs of these seemingly prying and bossy questions but lifts-up the benefits. She steered me in the conversation about HOW to have the conversations. The advice is “slowly, lightly, and mindful of your own biases and concerns.”
Since we are interconnected, the difficult conversations are necessary. In the U.S., thirty percent of adults with a living parent or parents over the age of 65 says their parent or parents needs help handling their affairs or caring for themselves. For families who are not rich, the adult child is likely to provide the time and finances. This fact begged the question, are daughters and daughter in law more likely to forego paid work than a male relative? Strober replied, “well of course, women always do more work; but sons and sons in law are doing more and more.” And who ever does the work is paying for it indirectly.
The adult kids who help their parents spend about an average of 77 hours per month – to do so. Time doing elder care has an opportunity cost in the United States amounting to $522 billion annually.
Strober and Davisson write, “If you think it likely that you may be called upon to help your parents financially at some point, it will be helpful if you can get relevant information from them in advance. If they resist sharing details of their finances, this may be a tough assignment. Hopefully, you can prevail by explaining that you will be far more successful in providing whatever help they may need if you have some advance “warning” to do some planning yourself.”
They write that adult children should ask where their parents’ computer passwords are, their wills and the names of their accountant and attorney (if they have them). I wondered how you can have that conversation and not come across as noisy and bossy. Maybe just ask where they record their phone’s password so if they are hit by a bus you can find it. But it occurs to me good relationships involve reciprocity. Just because an adult child is younger doesn’t’ mean fatal accidents and illnesses can’t happen.
I asked her what the top five areas adult children are should discuss with their parents. I got three. First discuss your parent’s expectations about retirement; ask about their advance directives and wills and know where their passwords are.
I asked Professor Strober what the most important message of the book about difficult conversations was. “Tread lightly,” she said.
We both winced and almost said at the same time. Make sure you do the same for them. Be reciprocal. The idea here is that unless you organize your passwords, make your will, plot out some retirement planning you can’t badger your parents about it. Don’t ask your parents to do anything you haven’t done.
Money and Love is readable for anyone but can be a lively primer for clinical psychologists and psychiatrist whose love-torn patients need financial tips. It is also a good primer for financial planners whose clients need relationship tips.