The Last Taboo: Money
We caught up with Charlotte Lorimer of Starling Bank to find out exactly why talking about money is such a taboo. Read her story below.
On my 22nd birthday, I opened what turned out to be one of the best gifts I’ve ever received: a little box full of cards called The Confessions Game. The rules are simple. You roll the dice and, depending on what it lands on, pick up a card from one of five piles – Family, Relationships, Sex, Career or Money. You are then faced with a question, many of which lead to outbursts of laughter, very long, very awkward silences or ‘I-can’t-answer-that’ excuses. Of all the topics, one lends itself to more nervous pauses more than others: Money.
Our friends know all about the highs and lows of our personal and professional lives but when it comes to our financial lives, we often keep the stories to ourselves. If you’re answering the question, ‘What mistakes would you want to avoid in a future relationship?’, your friends might already know the answer (sometimes better than you do yourself). But if you’re asked, ‘How much money do you have?’ or ‘What was your most foolish financial decision that haunts you in the small hours of the night?’, the answer might be something you’ve never said out loud.
Since joining the team at Starling Bank, I’ve come to recognise the importance of talking about money. Our research showed that only 22% of people in the UK feel comfortable discussing their bank balance with close friends and family. We found that people would find it less awkward to talk about their weight, mental health and sex life than their finances.
Why do we find talking about money so awkward?
“Money is bound up with emotion,” says Laura Whateley, author of Money: A User’s Guide, published in October 2018. Reflections of self-worth, shame and fear of judgement can become tangled with what we spend, what we earn and ultimately how comfortable we are talking about money.
Otegha Uwagba, author of The Little Black Book, reflects that, “we attach an inherent moral value to how wealthy someone is. Despite the fact that this isn’t the case, society often sees a rich person as a good person and a poor person as a bad person.” Being conditioned to link self-worth to financial worth (consciously or unconsciously) has a huge impact on the way we think and talk about money and it’s something we need to change.
Equally, we need to recognise and address the emotions that finance can fuel. From restaurant bills to payslips, shame is often the invisible yet ever-present emotion. “Money triggers shame all the time – conversations about it, splitting the bill, thinking you’re overpaid or underpaid,” says Alex Holder, author of The Money Book, due to come out in Spring 2019.
Alex compares not talking about money to not talking about age. “Protecting our salary to the degree that we do makes it seem that money matters a lot more than it actually does. Just as when women are told not to say their age, it turns it into a shameful number,” she says. “And shame is not a helpful emotion in so many ways.”
Fear of judgement is also closely linked to conversations about money. “It seems to me that people are more judgemental about money than anything else. Otherwise open-minded people feel it’s ok to comment on whether others earn or spend in the ‘right’ way, whether they have a lot of money or a little, but what is the ‘right’ way? It makes it very difficult to talk about,” says Laura.
When Laura was in her mid-twenties, she lived with her boyfriend in the flat he bought after inheriting money from his father, who had passed away from cancer several years earlier. Instead of paying rent, she saved the equivalent of his mortgage payments into an untouchable savings account. “I knew I didn’t have much protection co-habiting but I found it unromantic to talk about that. I didn’t want to talk about money because I didn’t want to talk about the possibility of breaking up,” she says.
While we often struggle to talk about our own money, talking about other people’s money is a different story. “People didn’t have a solution, they just had an opinion – which is often the case with money. Some of his friends thought I was taking advantage, some of my friends were worried about me not having any rights,” she says.
Laura and her boyfriend got married last year and bought a house together, thanks to the equity he had built up as well as her savings. “Ultimately, there’s no right or wrong way to do it, you’ve just got to go in with your eyes open – that’s why I wrote the book to explain how financial products work and how the law works,” she says. “Knowledge is power.”
For me, not being taught about money at school feeds into not talking about it when you’ve left and start becoming more financially independent. It makes money seem as though it’s too complicated and out of reach to be covered in class. And then when you’re a ‘grown up’, you’re often too embarrassed to ask questions such as ‘What are stocks and shares?’ ‘What are interest rates?’ or ‘What does ISA stand for?’ (Individual Savings Account, in case you’re like me and had no idea until Google came to the rescue).
In her book, Laura addresses these kind of questions and shares advice on how to budget, how to feel better about money and how to unpick the acronyms scattered throughout the financial world. “I wrote the book for myself and my friends and I was mindful all the way through to think, ‘If I was writing an email to a best friend asking me everything I know about money, what would I say?’” Laura explains what investments, pensions and mortgages are in a language we can all understand.
Why does it matter if we don’t talk about money?
Talking about money can have a positive impact on our wellbeing, relationships and careers. Starling found that nearly half of us believe that talking to others about our finances improves our confidence around money. Practical steps such as checking bank statements and adding to your savings not only help you financially, they can also make you feel more confident about your own money management skills, according to our research.
I’ve found that when I talk about money, it feels less scary. I’ve also discovered lots of new ways to save money through these conversations and that saving makes me feel more in control. ‘Out of sight out of mind’ is what works for me so as soon as my salary comes into my Starling account, I separate it from my everyday balance in a savings Goal. Laura, who has a daily number as her budget, does a similar thing, while Otegha automates it. All of her income is paid into a savings account and then she pays herself a salary from that into a current account. As she says, “you’ll spend whatever you have in your current account. If you’ve got two grand in there rather than two hundred, you’ll blow through it.”
One of Alex’s tips is to create barriers for spending by deleting apps or wiping one-click check-outs. She also thinks about money in terms of time. “I ask myself ‘Are these jeans worth an hour in a boardroom?’” she says. “Don’t buy on impulse. Close the browser and come back to it to see how you feel.”
The focus of Alex’s book is the psychology and emotions that surround money. “My book is about why we need to smash the taboo of money and the moments when money has become a point of friction,” she says.
We have so many conversations about relationships, but money is often left out of it. “Money can be a big part of a relationship,” says Laura. “Asking how friends split money with their partner can make you feel less alone and show you that there’s no right or wrong way.” It’s appropriate that the Money cards in The Confessions Game are grey – nothing is ever black or white.
Laura also reflects that “if you don’t talk about money with your friends, it will be even more awkward talking about it with an employer.” According to the charity Young Women’s Trust, 75% of women under 30 said that they are not confident about asking for a pay rise, compared to 59% of men in the same age group. Building financial confidence is part of building your career and talking about money is a good place to start.
The bigger picture
Women having less financial confidence than men feeds into the wider issues that have hit the headlines this year including Starling’s #MakeMoneyEqual campaign about how the media talk to men and women differently about money.
In the UK, we not only have a gender pay gap, we have a wage gap, despite the Equal Pay Act passed in 1970 which made it illegal to pay men and women different amounts for the same work. The average woman is paid 14.1% less than the average man in the UK, a figure that hasn’t budged in the last three years according to The Fawcett Society, the UK’s leading charity campaigning for gender equality. Equal Pay Day on 10th November is the day when the average woman is effectively working for free for the rest of the year.
If you don’t talk about money, you won’t know whether you’re being paid equally and you won’t be able to do anything to remedy it.
Believing that it’s impolite to talk about money will get Britain nowhere. In Sweden, where anyone can look up a neighbour’s salary, the wage gap is only 6%, similar to Finland and Norway where tax returns are also in the public domain. “Transparency creates equality,” says Alex.
Being opaque about money not only leads to pay gaps, it leads to gaps in our knowledge and therefore further inequality. Otegha talks about inheriting not only physical money, but good money behaviour. “It’s another form of intergenerational wealth and if it isn’t there, it becomes another form of injustice,” she says.
The solution? “I think money should be spoken about both by schools and parents. My parents are incredibly financially literate and passed this on to me but not every adult is well-equipped to teach their children about money,” says Otegha.
“I’m amazed at how little education I was given and I wouldn’t want that to be repeated,” says Alex, who has a two-year-old son. “As I high earner, I breezed through London and when I didn’t want that job or lifestyle anymore, being bad with money trapped me. I can’t believe how awful I was with money for so long. It changed when I had a kid and had a budget,” she says.
How can we get better at talking about money?
Lose the labels. We don’t have to be divided into ‘creative people’ and ‘numbers people,’ ‘bad with money’ and ‘good with money.’ Polarising everything into black and white is unrealistic, unhelpful and leads to the internalisation of money as an unshakeable and often shameful part of our identity.
“There’s a problem with the labels being ‘good with money’ or ‘bad with money.’ It’s like saying ‘I’m really unfit’ and thinking that you’ll never be able to change it. It’s not a personality trait – you don’t have to write yourself off,” says Laura, who always thought of herself as being ‘terrible with money’ throughout her twenties before writing her book.
Growing up, I never knew whether I was ‘good with money’ or ‘bad with money’ because no one ever talked about what they spent and what they saved. Without these conversations, I didn’t know where I was getting it wrong, and where I was getting it right. More than this, I didn’t really know what being ‘good with money’ actually meant.
“What it really means is, do you behave rationally about money?” says Otegha, who has always saved quite consistently, encouraged by her parents who opened a bank account for her when she was 8.
Alex, who didn’t save until she was in her mid-twenties, feels that “people take some relief in labelling themselves ‘bad with money’ and use it to justify bad habits.” For her, “being ‘good with money’ is about feeling in control, spending less than you earn and having some savings. Budgeting, knowing where I’m spending it and when has opened up so many opportunities. I genuinely feel richer now than when I earned more and that is because I think about my money. I now only say no to things I really don’t want to do and prioritise anything I really want to do – I have that control,” she says.
Another of my misconceptions was that to be ‘good with money,’ you had to know lots about it. Reading Laura’s book has finally made me realise that I haven’t been missing huge pieces of the puzzle. And that money is not as complicated as you think. “Some people in the industry have a vested interest in making money seem more complicated than it really is,” says Laura.
When Anne Boden founded Starling after a thirty year career in traditional banking, this was exactly what she set out to change; she wanted to make money simple. Tracking what I’ve spent on eating out or travel through Starling’s Spending Insights, saving what I can in Goals and checking my bank balance as I would check my social media are all simple steps that make me feel better about money and therefore more comfortable talking about it.
“Conversation is often the first route to changing something – being honest with yourself and honest with your friends,” says Alex. This is why The School of Life designed The Confessions Game. It’s honesty in a box, full of questions that might make you wince but that ultimately let you share your insecurities with the people you love and trust. Money is a part of life. It’s time to start the conversation.
Starling Bank built the UK’s first mobile-only current account from scratch. We believe everyone should be able to enjoy a healthy financial life — that means giving our customers access to a mobile market of products and services that best fit their financial needs, giving them the tools to make mindful money decisions.