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Money Talks: Tackling tough money conversations with loved ones

November 15, 2011

By Lynnette Khalfani-Cox | Money Rates Columnist

As the holiday season approaches, many families will gather together to celebrate traditions and enjoy each other's company over home-cooked meals. But all that family togetherness during the holidays can also bring out thorny money issues.

Consider the relative who's borrowed money from you but hasn't paid it back. What about a parent who's entering his or her golden years without a financial plan? And how should you approach a loved one who's obviously hurting for money and may be in massive credit card debt?

Money is a hot-button topics at any time of the year. But during the emotionally charged holidays, a discussion of such subjects can result in full-scale family meltdowns.

"We should talk…"

How can you best approach a relative or friend to talk about important financial matters amid all the festivities, spending and hoopla associated with the holidays? Or should even you bring up things like savings accounts and credit cards during a season when we're all supposed to make merry, focus on giving and bond with family?

Some financial professionals believe that the holidays can actually be an opportune time to have family conversations about money issues – if for no other reason than it's the one time of year that people who are often busy and living in far-flung places have a chance to reconnect with their relatives one-on-one.

But it's still wise to use caution and carefully choose the right moment to discuss money matters.

"There's already so much stress during the holidays, so timing is everything," says Jim Heitman, a certified financial planner in California. "Don't bring up heavy topics on the day of a big holiday. But if the holidays are the only time the family is in town, then try to schedule some time to talk a day or two after the holiday where you can really have some serious conversations."

The Money Talks series

MoneyRates.com's Money Talks is a series offering practical tips and advice for having successful money-related conversations with your loved ones.

Money Talk #1: The unpaid family debt

This first installment tackles the challenge of discussing an unpaid family debt. Perhaps no other topic can make for such awkward interaction at the family dinner table as sitting across from someone who owes you money but hasn't paid as agreed – and maybe hasn't even acknowledged the overdue loan.

As frustrating as such a dilemma might be, it needn't cause a family blow-up. We'll tell you how to handle this sticky situation gracefully and effectively.

Money Talk #2: The aging parent with no plan 

The second installment in the Money Talks series is designed to help those with aging parents or grandparents, especially those who may not have a financial plan for their later years. What insurance, estate planning and asset protection issues should these households be addressing? How can you bring up these topics tactfully?

Money Talk #3: The credit card crisis

The third Money Talks article focuses on how you can have an effective heart-to-heart with a relative or close friend who's in serious credit card debt.

Maybe your relative is a shopaholic whose poor judgment and inability to save seems coded in his or her DNA. Or maybe your loved one ran aground not through poor money management, but just because of bad luck and the economy. What can you say to help the situation, and how? 

Communication is key

When done properly, family conversations about finances don't have to dampen your family's spirits. On the contrary, productive conversations about money can lead to better family communication, improved financial decision-making and greater economic stability for your family for years, or even generations, to come.

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