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Should You Tell Your Friends Your Financial Picture?

   Posted On: March 24, 2016  |    Posted In: Love and Money  |     Posted by: Broke Millennial®

Up popped a gchat screen and my friend asking if I had a few moments to answer a money question. Always happy to dish about finances, I obliged. For the sake of her privacy, I won’t get into the particulars, but she had a financial strategy in place and wanted my two cents about whether or not I thought it made sense.

“Are you comfortable giving me your specific numbers?” I typed.

“No, not really.” She chatted back.

Never deterred from a financial conversation, I continued to give her my opinion on the question by working with a hypothetical budget and giving her numbers I felt satisfied the situation. Aka me saying, “You need to have at least $15,000 saved before you consider doing this. If you don’t, then don’t do it.”

About a week later, while chatting with a different friend, the conversation inevitably turned to money (that seems to happen to me a lot). He divulged his savings information and I took pause.

“I tend not to tell people my net worth because I don’t want to deal with their responses,” I told him. “It’s annoying when people feel they can pass judgment on what I can or can’t afford because they have a snap shot of my financial picture.”

The truth is, I usually avoid telling friends my net worth because I never want to hear the expression, “Come on, you can afford it” come out of someone’s mouth.

His curiosity was piqued and, being one of my closest friends, he gently pressed for a little more information.

Finally, I indulged him and provided a reference point. (I hope to one day be able to say: my net worth is Scrooge McDuck diving into piles of gold kind of money.)

These two events have left me wondering at what point, if ever, should we be sharing our financial picture with friends?

While I’m all for ridding our culture of the taboo surrounding money, I still hesitate to share details with friends.

155HWe humans crave a good benchmark. You know the kind that says X percentage of people in Y age group have Z amount of money saved for retirement. You look at that metric and think, “suck it other 25 – 29 year olds! I’m better than 95% of you.” Or perhaps you think, “well, I guess I’ll work myself into the grave.”

Sharing your financial picture with friends in your age bracket, with about the same education levels and/or similar socio-economic backgrounds can feel like you’re all “whipping it out to measure up” – and you know exactly what I mean. This is because money, and our decisions related to money, is often used as a touchstone for our self worth and our intelligence. Not saying that’s right, just saying that’s how it is.

Except, I don’t want it to feel that way with my friends.

Personal finance is intensely personal. How we choose to spend money or save money or invest money or completely ignore money is our decision. I’ve had a lot of advantages bestowed upon me in life for simply being born into my family, with the skin color I have and given opportunities for quality education. Some of these advantages, like graduating college without debt, automatically put me financially ahead. While some of my friends started post-colligate life with -$30,000 or -$60,000 or -$150,000, I left with +$10,000 and kept building from there.

So yeah, when a friend tells me he saved $4,000 or another says she finally started investing or a reader emails to say he just paid down all credit card debt – I’m thrilled for them. I’m not mentally calculating how their accomplishments stack up next to mine, because who knows what could happen? Maybe my heavily invested net worth tanks this year, or I lose my job, or a medical issue arises and I suddenly find myself massively in debt.

To be honest, I don’t have an answer to my own question.

There is value in demystifying finance by being really open in conversations. The more we’re willing to go on record about failures and victories with money, then the easier it will be for everyone to have a high rate of financial literacy. But for the same reason my friend hesitated to share her real numbers with me, I often opt out of getting financially naked with all my friends.

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52 responses to “Should You Tell Your Friends Your Financial Picture?

  1. This is an interesting post. I’ve considered sharing my budget on my blog, which would be me “getting financially naked”. Honestly, I’ve learned not to care what people think I should or should not spend money on. My priorities are my own and not for someone else to judge.

    1. It may not be for someone else to judge, but they definitely will. My bigger concern is more just hearing the “come on, you can afford it” or having friends get cranky, or self-conscience, about income disparity. It’s been interesting how quickly that’s happened in the nearly 5 years since college. Throwing down about having more money saved than your friend’s house is worth is a bit awkward, so I just don’t mention it.

  2. “The truth is, I usually avoid telling friends my net worth because I never want to hear the expression, “Come on, you can afford it” come out of someone’s mouth.”

    This quote really resonates with me. My friends and I are in the same industry, so we all have a good estimate of how much each of us makes, so this is a phrase that gets thrown about a lot and it always annoys me to hear. Sure, I “could” afford it, but it’s not one of my priorities. Trying to explain financial priorities doesn’t typically work out well with friends who live to spend. The silly part is that most of us have negative net worths due to student loans.

    1. It’s interesting how people judge “afford”. Do I have the money to pay for it? Yes. Will that mean I can’t buy something else that I value more? Yes. So can I afford it? No. 😛

      Not disclosing my net worth gave me a pass for a long time to say, “sorry I can’t afford that” with every assuming I too had student loans/debt/what have you holding me down. Once I came clean about some of that it got harder to justify not being able to afford x,y,z.

  3. Back when I graduated college, all of my close friend and I shared our various numbers such as what we were making and such. I think it worked OK because we were all in very much ‘the same’ place. Over time, as our jobs progressed in different ways and we also started having different goals and things that impacted us, it became clear that we were in different places, and the level of sharing naturally went down.

    1. The income disparity certainly is one reason sharing drops off. I’ve noticed it’s really different once some friends hit certain life milestones (house, marriage, baby) and others don’t. Plus, I get that once you’re married it’s also about joint income so if your spouse is uncomfortable sharing then you probably shouldn’t be running your mouth about numbers out of respect.

  4. This is a truly great article. Sharing your financial situation with people can often be awkward. Like you, I also graduated without student loans and I feel blessed that I am not in debt like some of my other friends. Even though I have less expenses than them, due to no loans, I believe that getting in the habit to save money from young will carry through life. While many people “can afford it,” many don’t want to as they rather save, invest, etc. Sharing net worth can be a tricky situation as some people may become your best friend all of a sudden while others will respect it and carry on. Knowing what people make is always nice as long as they do not belittle others. Great article.

    1. Thanks, Stefan. I completely agree that regardless of debt load it’s important to build the habit of saving.

  5. Interesting perspective! I try to be pretty open about salary/expenses, but I keep savings/investments/grand totals a little more private, and discuss those in generalities and in terms of my own values. Rather than saying something like “oh yeah, I have $10K stocked away in my retirement savings so far” I would say “well it’s really important me to save for retirement, so I’ve always put at least 5% of my paycheck into a 401k” – that way I can share the perspective and my goals without someone else popping up to tell me whether I’ve saved enough in their eyes. On the flip side, I’m pretty open about how much I make and spend, and occasionally I’ve turned down a happy hour or expensive trip with an explanation like “I’m really working on knocking out my student loans” or “I’m saving up for [specific future purchase] so I’m scaling back on eating out”

    When you explain YOUR rationale for your choices, your friends should respect that. If you only share the numbers and not how you got there, though, it may leave the door open for them to make their own judgments and calculations for you.

    1. Great point to share your tactics (ie: 5% savings rate for 401k) instead of the actual number. Gets the point across without bringing up net worth. Granted, if your friend knows your salary a little math can be done to see a minimum of what you have saved, but hey, that could be inspiring!

      Giving specific reasons about why you don’t want to go out is also a good point. I have a friend who does that to me and vice versa. We both are debt free with significant savings (which we haven’t disclosed but we both know vague details) so yes, we both could “afford” a $75 ticket to a Broadway show, but I respect it if she tells me that she’s saving up for a trip or had a big spending week buying weddings gifts, etc.

  6. Like Money Beagle, sharing your number was easier when you were younger. It gets tougher when you progress in your career. There is always a possibility of some jealousy and envy…whether by you or by your friend. I guess it’s just human nature. I also don’t like being judged because of that number

    1. The green monster is a frustrating reason not to share, but it is uncomfortable when there’s the general acknowledgement that one of you has way more than the other.

  7. I was very open about our financial picture when we were in grad school, both on our blog and IRL. I think in our case the “standard” was just treading water so anyone who was able to increase their net worths – by however much – was doing great. Now that we are in the “real” working world, I’ve noticed that I’ve become more self-conscious about sharing our income and savings rates on my blog, probably because our situation has become more relatable to the general population. If IRL friends were curious, though, I think I’d still share with them. I do still have a “run your own race” attitude about financial progress.

    1. Isn’t it interesting that you’re more willing to share when times are tough than when times are good?! I feel the same way. As my number gets bigger I am far less likely to be forthcoming.

      The run your own race attitude is an excellent way to explain the mentality and I do share with close friends, but only when asked.

  8. First of all, “whipping it out” You. Kill. Me!

    I digress, this is such a good question, Erin.

    That whole “measuring up” mentality of talking about finances is what gets me. How can we approach each conversation about money as a learning opportunity, instead of a vulnerable state of opening up your soul and showing your friends how great/terrible you are at managing something that we have a severe lack of education learning how to manage in the first place?

    Financially naked is such a good way to put it. I feel like I’m 99% financially topless, but fully naked? I think there’s a time and place for that, and I definitely need to work on getting there in some areas of my own life. 🙂

    1. Glad someone appreciated the line! Peach and I usually say that to each other when one of us tries to “one up” in conversation.

      I dig that you’re financially topless. I’m really not even there on the blog/with most friends. I’m only financially naked with Peach and my immediate family because it isn’t a taboo topic with them.

  9. For the average person, when you share your number with them you are always going to be judged…..It’s kinda like driving on the motorway, everyone going faster than you is an idiot and everyone going slower is a dumbass.

    It’s kinda cynical of me but I have to fight those feelings myself, envy of those doing better (wishing I could match their self discipline!) and a sort of “smack my forehead reaction” to those who could be doing so much better if only they tried!

    I love seeing other people expenses and net worth, I learn a lot so I am always grateful for those willing to share. I agree that it helps promote financial literacy and for now I am willing to be fairly open, but as my number gets higher I’m not sure if I’ll be so free.

    1. Judgement seems to be our default in many ways and your motorway example is an excellent point. And isn’t so interesting that the general consensus is that you don’t want to share as the number gets higher?

      I too am grateful to those that share their net worths because it certainly does help promote financial literacy and transparency. But, I’ve also noticed a lot of folks that do either started out (or still are) anonymous.

  10. Just last weekend, me and my husband sat down with some of our good friends, another couple.

    They had never set up a budget before, were in credit card debt, and their only financial management was spending money on weird things if they happened to check the bank that day and see that they had any money (and that was on a good day).

    I don’t flaunt my finances like a flag. I’m not shy about saying how much in debt I am for each of my loans. But in this case, I felt it was important to give them a peek at exactly what our day-to-day financial management was like, because neither of them had ever even seen anything like that at all.

    I hope it helped them! Time will tell.

    1. An excellent case study about why it can be really important to be open. I’ve had similar conversations with certain friends that wanted to know more about building a budget or improving credit scores. I think shouting debt from the rooftops may be even more important than net worth. It gives other people hope and ideas about how to handle their debt. It also encourages them to improve their own financial literacy and not feel so helpless.

  11. I never used to talk about money with friends (probably just because nobody else did), but ever since I started to become more in tune with my finances, I’ve been finding that I’m suddenly very comfortable talking with people about my debt and my salary (and asking about their salaries!). The people I’ve had these conversations with are usually a little surprised but happy to talk about it, which makes me think that perhaps lots of people are willing to be open but just aren’t bringing it up because it’s not a normal social topic. One of my female friends even told me that she thinks women should make a point of being more open about sharing salary information in particular so we can have a better sense of how our salaries fit into the larger picture and when we might be able to negotiate more.

    That all being said, I know your question was about net worth rather than salary, and I will admit I’ve had fewer conversations with friends about that. But I feel like talking about salaries is a good start and could lead to other conversations if people feel comfortable. Personally, I am happy to talk about my net worth, but that might be because it’s negative! I can see how I might be more hesitant if I thought it might be higher than average for my age.

    1. Amen about women sharing their salaries. I’m wide open about my salary with my friends and I too have noticed most friends are pretty transparent about sharing theirs. The net worth can be a pickle because that’s a reflection of saving habits or debt burdens, which is how people can get judgey wudgey.

      Perhaps the fact my NW is on the higher end for my age gives me a bit of guilt, even though it shouldn’t, which is why I don’t share. Or, I don’t want people to say, “hey – you didn’t have debt?! You should have even more saved!” Bit of a double-edged sword, especially when you write in a community of highly motivated savers. 🙂

  12. I’ll give numbers, but only if asked specifically (and if I get to ask the question in return :)). But usually no one ever flat out asks cuz it’s so ballsy, so they usually find out if they ever happen across BudgetsAreSexy or our list on Rockstar Finance (thanks for linking to it, btw!). I agree it def gets dicey though, and once it’s out there it’s out there. In fact, there’s one person I wish never found out as she used to bring it up multiple times in inappropriate settings and always at my expense… and is exactly why I use “used to” here – we’re no longer that close.

    1. It’s certainly ballsy to flat out ask. I’m curious about two friends, but I’d never ask directly because I think it would make them too uncomfortable (they aren’t PF nerds like us!). People are more likely to ask my salary than net worth, which I’m more than comfortable sharing. The example with your friend is certainly one reason I’m a bit wary. I said to my friend, “Don’t you ever tell me that I can afford something if I tell you my number” before I divulged it. He’s one of my best friends though, so I’m sure it will be fine.

  13. Yes definitely. I am open to this, but I try to keep some details not shared, because letting them know your financial pictures helps you inspire them and get some advice on how to better/improve your financial pictures. There are just some details that others can only see and you can’t see, so I think doing this is for your own benefits.

    1. It certainly can be inspirational or helpful to friends that are willing to engage in open, honest dialogue without judgement.

  14. Interesting topic and I appreciate your perspective. I think it really depends on your situation. I chose to tell my friends about my plan to pay off my massive debt in three years because it made them more understanding about my three year spending ban (and more willing to try to find free things to do). Before I told my friends about my plan to pay off my debt in three years, I was told “but you live with your parents so you can afford to spend money” and it was very frustrating. Never mind that I was six figures in debt and was planning (at that time) to put all of my savings toward a down payment on a home. Yes, because I live with my parents, I have money in the bank and can technically “afford” to go out to dinner or take a vacation, but I value debt freedom (and moving out of my parents’ house) much more than I value entertainment or travel.

    1. It’s been really interesting in the feedback to this piece that those in the debt repayment journey are far more open than those with positive/high net worths. I can see how sharing your debt repayment details can help mitigate the issue of friends making assumptions about what you can and can’t afford, especially with you so aggressively prioritizing debt repayment. I’ll be curious to see if your tune changes in a few years when the debt is gone and the aggressive saving mentality gets you into a healthy net worth quickly.

      1. This reminds me of an aggressive text I got from a friend a few years ago. Our other friend had her bachelorette party in my city so I chose to stay at my house instead of going in on the expensive AirBnB they were going to rent. I even offered to let them all stay at my house too for free. Well, apparently that was rude to the bride and I got some heated texts about it. I wasn’t even in the bridal party. Overall, I saved $400, still had fun at the bachelorette party, and they are now over it two years later but it was tough for sure. I used debt payoff as an excuse.

  15. This is something I’ve only recently started to struggle with. I’ve always been fairly open about my finances, but now that I’m sharing about them on my blog, it makes me question how much information I should share. I don’t want to come off like I’m bragging, and like you, I understand that I’ve been handed certain privileges in life that have allowed me to have no debt and to build an emergency fund. On my blog, I want to remain pretty candid. But in real life, unless my friends ask, I don’t think it’s my place to divulge details. I like that you’ve got me thinking. Thanks, Erin!

    1. The bragging is probably why the higher your net worth the more awkward it feels to share. Even when you aren’t bragging, it just feels distasteful when friends are struggling. Thanks for stopping by!

  16. As someone who announces my net worth anonymously to the world, this is something I think often about. For me, it depends on who it is:

    Family including parent and sisters: I’d never tell them because from that point on, they’d expect me to pick up the check, pay for vacations and whatever else is down the road. I’d happily help them with advice, but just handing out money helps no one.

    Extended family and friends: There are certain members of the family who I would tell. I would also tell most friends if they asked. The main reason is so they could have a better idea of what wealth looks like. It’s not the dude driving the BMW living in the McMansion; it’s the guy or girls down the street who mows his own lawn and fixes his own stuff. I’d hope that by seeing my example, perhaps they’d be OK with frugality too.

    I’d also hope that the knowledge would trigger some good conversation and questions:
    How did you get the money? (hard work)
    Who manages your money? (me)
    How do I get rich quick? (you don’t, see the part about hard work)
    Why don’t live it up a little bit? (if something makes me happy, I buy it. I have everything I want.)

    Unfortunately, most people hate talking about money. Like you said, it’s incredibly taboo. Perhaps this is why there are so many issues surrounding it?

    If we were all a little more open, I think we’d all be a lot better off.

    1. Your tale of Bad Car Bill is still one of the most iconic wealth stories I’ve ever read. It’s absolutely correct that if we’d be more open we’d be better off. And I agree that sharing your two comma wealth numbers can help people better understand what real wealth looks like. Name brand doesn’t equal wealth! Maybe I’ll be more open one day…

      1. Whoah, loads of typos in my comment. Sorry!

        Yeah, Bad Car Bill! I’ll bet there are loads of Bad Car Bills out there. I’ll be a “Bad Car Bill” if I hold on to my vehicles for another 10 years. I have every intention of doing just that. Hello 2×6 bumper!

        It really does make me sad that money is so taboo, but I can understand it too. If you don’t have 2 cents to your name, it may be humiliating to talk about. On the other hand, if you have bags of money, how do you talk about and not sound like you’re bragging?

        The very best thing about having money is that you don’t have to think/worry/lose sleep over it anymore. In an ideal world, none of us would ever have to talk about it because we’d all be well adjusted and it wouldn’t be an issue.

        1. Interesting about not telling parents and siblings. I find myself telling my parents because (from their perspective) they put themselves way into debt to get my siblings and I ahead in life (expensive sports growing up, contributing to private college) etc, so I like to tell them my financial picture so they feel better about their sacrifice/ and like it was worth it. They totalyl could have taken more frugal shortcuts growing up with the same result but they don’t see that. Unfortunately, sharing has its downsides since they don’t understand how being frugal preserves wealth so they are constantly nagging me for being too cheap bc I “make alot of money.” Double-edged sword I guess.

  17. It’s hard to find knowledgeable people on this topic, but you sound like you know what you’re talking about! Thanks
    You should take part in a contest for one of the best blogs on the web. I will recommend this site!

  18. Conversations with my friends often turn toward money too. Like you, I am always hesitant to share my actual numbers. Although we have a healthy savings account, our net worth is hugely negative due to us taking on student loans for my hubs’ medical school. It’s always shocking when I do tell people our actual numbers.

    1. I think it’s hard for people to wrap their heads around debt for medical degrees, but the ROI there is so huge in most cases that the debt isn’t insurmountable.

  19. My wife and I have no children and in our mid sixties but do have five millennial nieces and nephews. We dress frumpy and drive 10 year old 4 cylinder cars and live in our first home out of college. Our siblings and their millennial offspring think we are poorly paid public employees but both of us have advanced through our positions and are well paid. Since we live below our means we have significant investments that financial institutions label us as affluent, definitely not wealthy. My nieces/nephews are in their mid twenties to thirties and are having mixed results economically; I try to advise them on a way forward and that one can be a slave to debt and true freedom is no debt. My wife and I are in this position now and could retire with pensions, but we trudge on. Two of my niece/nephews blow us off and never respond to our birthday card or significant event check of $100 to $250. The other three will be in our trust and if one becomes helpful in our declining years they will be rewarded with increased percentage. I am a first time visitor to your site and probably rolled a couple stories into this comment. Please forgive the poor English format as I am form filling tech guy. And I have two rescued pound dogs. Keep up your advice Erin.

    1. Thanks for stopping by and the kind words! Sounds like a few of your nieces and nephews will be pleasantly surprised by your legacy and hopefully do something to honor you and your wife.

  20. This is one of the reasons why I wonder if it makes bloggers feel uneasy at all when sharing income reports. I see the reports from both sides of the spectrum, people making a couple hundred extra a month to people making tens of thousands a month. I notice the ones making big bucks get hate sometimes for sharing their income reports and people criticize them when they don’t buy something pricey.

    It’s so weird. I guess everyone has a different “limit” when it comes to sharing and how much to share.

    1. The thread in these comments has really been those with debt are more comfortable sharing, which I find fascinating. It seems we’re collectively a bit more wary of being judged for decisions when we can afford something than when we can’t! I think sharing debt can also be a motivator to stay on task when other folks are monitoring your moves, but that’s just my speculation.

  21. I have recently started to become open with sharing my numbers on my blog. I do agree that some people may see it as ” comparing who is better”, but I am by no means financially secure. I can hope however, that people reading my story can see that it can be done. This coming from that 20-something guy that did come out of school with a lot of debt. (70,000) I am no better than the next guy but it does get me excited if my ideas and my journey benefits someone else to take control of their finances and work towards a debt free life. Great Read!! Something that I had issues with for a while!!

    1. Thanks for sharing your reasons behind opening up. The debt blogging is so beneficial for scores of other people out there who need help and feel it’s too taboo to talk about.

  22. I totally agree and see the value about sharing budget/how to budget information. Husband and I are approaching mid 60s when retirement is around the corner and we basically hit the maximum wealth accumulation we can achieve before selling our home of 30 years. That said, we will NEVER be saying how much the nest egg has accumulated and how much we are stashing away every month. Jealousy can abound when friends and family ask for a loan and can’t understand why you won’t share the wealth. We worked hard to save, including driving cars into the ground, shopping at consignment shops.

    I do have a tip though, my husband lost his job after more than 30 years at one company at age 57, we started to do the hard math within the nest egg, to our horror… That number is to be divvied out over 35 years? CHOKE Needless to say, when he got another full time job, we are now basically living VERY FRUGALLY in order to bank a sizeable chunk of his current salary. Losing his employment was a wonderful wake up call for us. Now we are looking forward to a comfortable retirement in the next year or two and hey, we’ve been living within an extreme budget to get there, retirement will feel great!

    1. A scary wake up call, but what a great time to get one! Sounds like it really set the two of you up for financial success in retirement.

  23. I completely agree. This issue has especially popped up with regards to planning my wedding. Friends and family who perceive me to be in good shape financially because I have a high-income think I am being “cheap” for wanting to have a frugal wedding because “I can afford it”. It’s better off not being shared.

    1. I dread the day I have to deal with wedding planning issues. People really don’t get that a frugal wedding isn’t always about saving money but is more about a reflection of what you value — and dropping a person’s salary on one day isn’t a value!

  24. It’s a tricky topic for sure. When there are many bloggers who clearly share their net worth, one might think it’s a good idea. However, I’m not sure if I would want to have my net worth shared across the web – let alone to certain individuals.

    Tricky question, and I think the answer is: it depends.

  25. I have a blog, so you can say I am a sharer, but I share to a point. My husband is not comfortable putting our exact income out there, but I will share our goals for retirement savings as a percentage of gross income, or share that we maxed our 2015 Roth IRAs ($5500 each). I will share exactly how much I spend to feed the five of us each week, or how I spent $30 for a birthday party. Occasionally I wonder if the people we invite to that birthday party think we are being cheap to them, but that’s the other kids’ moms I don’t know so well, not our family and friends, many of whom I have converted to penny pinching ways.

  26. Hi,

    I really like your post!!
    It is quite informative and useful.You can dream about making it “big time” all you want…but if you don’t know where you are starting from, it’s hard to get a realistic picture of what it will take to get to where you want to go… so let’s get doing this thing!

    I believe that the more each of us accepts responsibility for our own finances, the less we as a country have to face financial market meltdowns. Each of us must work on making our own lives better. Go forward with the belief that your life is what you make it and only you have control over your financial future!

    Thanks for being sharing!!
    Keep it up…

    Regards
    Lyle L. Ketner

  27. Phew. I made it all the way through these thorough comments and your responses Erin. It’s 1 am and I got deep into this thread. Great post thx for resurecting it on Facebook so I could find it. I went back and forth for a long time deciding whether to blog at all because of my net worth and the success I’ve created. But it’s my true story and I got inspired to share it and made it my mission to do everything I can to share and try to help people live richer lives.

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