How to coach your family to be good with personal finances

You can lead a horse to water, but you can’t make it drink. The same could be said about personal finances. You can lead a person to the bank, but you can’t make them balance their checkbook. Sound familiar?

It’s not a myth that nearly 50% of marriages end in divorce. One of the top reasons? Money.

Yikes. Since personal finance is our forte, we wanted to share some tips on how to stave off the storm … and the divorce lawyer.

Okay, so it’s never much fun to talk about money, but communication is key when it comes to managing your finances. If you and your spouse never work out a budget and layout financial goals, will anything ever be achieved? If your children never learn how to save money or plan for college from you, who will teach them? And if you never sit down with your parents to discuss their retirement plans, what will happen when “someday” becomes today? Sadly, most people believe these questions should be discussed when they come up, not preemptively. What’s even more worrisome is that when these issues do come up, it’ll probably be too late. (Fidelity)

Before you go postal, sit down and talk in a positive manner. Set a date to do this once a month, maybe even once a week at first to go over your financial goals and plans. Write them up on a board or in a shared binder everyone can see and add to. How much do you want to have in your retirement fund by December? Does your daughter have her sights set on a pricey homecoming dress? Are you teaching your youngest about money with an allowance? The most important thing is to talk, and share your goals with one another.

And not from your kids either, if it’s serious. Be transparent. Gather all your bills, debts, bank statements, investment information and spread it across your kitchen table. Write your balances on your fridge, or have a shared money management app for you and your spouse. Nothing says “you’re in debt” more than a stack of bills on the counter that everyone ignores.

Having everything shared can help with teaching young kids about cash flow. It’s a good way of getting your teen’s attention, too, when they’re gearing up to ask for a new gadget. Chances are you’ll be taken seriously rather than as an adversary when you say “no.”

Let’s face it. When parents talk almost all children hear blah-blah-blah. For that reason, we suggest visual aids. Highlight your monthly income and expenses in a spreadsheet or flow chart. Use color markers with green for savings and income, and red for bills and other expenses. Make charts and graphs and use magnets. Whatever you do, do more than talk.

Know what’s a perfect dry erase board for your finances? Your fridge. Try our Refrigerator Economics for a fun way to display the household budget.

It’s not just children that can tune you out, sometimes a spouse will do the same thing. When that happens it might be better to consult a financial expert. Many cities offer free credit counseling, so take advantage of it. Here’s a handy credit counselor locator provided by the National Foundation for Credit Counseling.

Some people simply can’t do math or format a spreadsheet. Good news, you don’t have to. There are a lot of apps that help people manage their money with just a few clicks–no hunting down receipts and statements needed. Mint is probably one of the best known, and we highly recommend Check.me. Both give you a quick snapshot of your spending habits, as well as offer tools to keep you on budget. Here’s a link to a list of our favorite money management apps to simplify your money life.

In his book Why Didn’t They Teach Me This in School – 99 Personal Money Management Principles to Live By, author Cary Siegel advises couples to spend just one hour a week learning about personal finances. Make a habit of cruising personal finance blogs for tips on how to improve your financial IQ. Stories like How I paid off over $13,000 in Debt in 11 Months are not only inspirational, they’re educational too.

So you’ve done all of the above and gotten nowhere with your spouse. Maybe they’re still not listening, or maybe they just don’t care. It’s frustrating, we know. The Couple Connection’s Simonne Gnessen advises couples to work as a team whenever possible. Be helpful, encouraging, and share the knowledge you’ve acquired.

Help your spouse or child become organized financially, showing them how much you’ve saved in a savings account or piggy bank. For your kids, withhold a portion of their allowance for “savings,” and at the end of the month, show them their balance and how it’s grown. Teach older kids how to balance a checkbook, and if your spouse doesn’t know how, show them too. For teens, use a pre-paid debit card as a learning tool before they head off to college. Load it with a pre-set amount of money and teach them to stay within budget.

As with most things, people learn better by doing than by simply being told over and over again. If until now you’ve managed all the bills, give a few to your spouse to handle. Eventually, have him or she take over half the burden.

We all cross the line from time to time. If you’re tempted to lose your cool and take away your spouse’s credit card – don’t, and don’t hoard cash or turn into an extreme cheapskate. Don’t chide your spouse for going over budget, laying on the fear in hopes they’ll “get it.” Fox Business has tips on how to avoid being a financial bully.

As mentioned above, it’s better to let your family learn by doing. Did your son spend all of his back to school money on video games and gym shoes? Did your spouse forget to pay his credit card balance off by the due date? Clarify the consequences and let them handle it themselves. It’ll likely never happen again.

Sometimes you just have to let go, especially if you’ve turned into a bit of a control freak. Call it on the job training or baptism by fire, if a family member complains you’re too tight with money, give them the controls. Hand over any pertinent information like logins, upcoming due dates, and balances and see how they make it work. They might surprise you!

At your very first “budget summit” have everyone share their goals. That homecoming dress, that retirement fund, a new TV for the family room. Whatever it is, use your budget as a group to make it happen. Your kids might be willing to help other goals along with by adding some of their allowances into those funds, or keep you on track when out shopping. Teaching by example is one of the best ways for people to learn.

Take a page from gamification tools like SmartyPig and reward your family members with a boost to their goals. If your daughter raises all of the money for the dress, cover the matching pair of heels. If you and your spouse meet your retirement fund goal at the end of the year, reward yourselves with a weekend staycation. Sometimes, all anyone needs is a little incentive.

It’s frustrating to wear the family’s financial pants, but it doesn’t have to end in divorce or placing your child up for adoption. Communication is key. Be proactive rather than reactive and you’ll end up financial friends, not enemies.