While often afraid of becoming our parents, the truth is, we typically inherit our relationship with money from them – as they did from theirs. Many of us were raised to think that talking about money is taboo, but this idea perpetuates financial illiteracy, and avoiding money conversations can have a lasting negative impact on our own money attitudes, relationships and life goals.  Only 24% of millennials demonstrate basic financial literacy, according to a report by the National Endowment for Financial Education, which translates to three-quarters of a generation being ill-prepared for their retirement or other financial milestones. Having forthright conversations about our finances can help us learn, grow and better prepare for our future.

Money wasn’t really talked about in my own family growing up. Being raised in an Asian household, a significant emphasis was placed on education, but oddly enough, no financial education. It wasn’t until I graduated college and entered the “real world” (and had to pay my own bills) that I began to adopt my own foundational truths. Since then, I’ve shared these with countless families over the years in my work as a financial adviser. 

Simply put, some long-held beliefs about money no longer hold. Many of these ideas that have been passed down through generations should be put out to pasture. Here are five outdated taboos, in particular, that need to be banished, followed by some more helpful mantras that can serve as replacement for them.     

Note: On Sept. 30, Halbert Hargrove will host a free webinar focused on fearless money conversations about the new rules for retirement planning. To learn more and register to attend visit: www.fearlessmoneytalk.com/fmtregister1.

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Taboo No. 1:  Debt is always bad. (False!)

Many parents tell their kids that being in debt is bad and something to be avoided. But there are different kinds of debt, and not all are equal. For example, most homebuyers will need to take on a mortgage when they decide to make the big purchase, which is an example of good debt. And student loan debt isn’t necessarily bad either, since that’s considered an investment in your future!

Instead of being apprehensive about the idea of debt, it’s best to educate yourself on things like interest rates, credit scores and loan terms to make sure you can manage debt properly. In fact, if you’re disciplined enough and are one to pay off things like credit card bills in full every month, you can use some of the rewards benefits to your advantage.

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Taboo No. 2:  It’s never OK to cut off your kids. (Sorry, kids, but that’s false!)

A teen wearing headphones shops on her phone with a credit card.

I’ve seen first-hand how difficult it can be for parents to cut off their kids financially. In fact, I’ve seen clients continue to give their children a monthly allowance well into their 50s! Now, being a parent myself, I understand how hard it can be to walk the line between being supportive and helping your kids too much, which can often be to their detriment.

One of life’s critical ongoing lessons is achieving independence – including financial independence. Encouraging your children to earn their own money and support themselves is better for their confidence and growth as an individual.

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Taboo No. 3:  Leave your kids an inheritance, even if it means a huge sacrifice.  (Definitely false!)

Hands holding money.

Many parents have the idea that they need to leave their children something when they pass. The idea of leaving a legacy in terms of financial assets or real estate is a common and long-held tradition, and rings especially true with an emotional asset such as a family home. While it’s a nice thought, remember that these assets shouldn’t be set aside at the sacrifice of your own well-being.

Most children just want their parents to live out their last years in comfort, so if you can’t afford to leave an inheritance, it’s more than fine!

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Taboo No. 4:  You should never keep finances separate in a marriage. (Not true!)

A couple give each other the "side eye."

Many of our parents happily combined finances into joint accounts and shared everything. But that’s not the norm anymore, as couples often keep their finances separate or take a hybrid approach – a shared account plus individual accounts. According to a survey by Fidelity, one in five couples identify money as their greatest relationship challenge. Communicating about finances is necessary to help strengthen relationships and ensure your major life goals are in sync, as money is often one of the leading causes of divorce. Do whatever works best for you and your partner. The important thing is to discuss your financial aspirations and maintain open communication around finances.

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Taboo No. 5:  The same goals that were good for your parents are good for you. (Nope!)

A mom, dad and child in a1960s family photo.

Times have changed. It’s no longer the norm to get married in your early 20s, buy a house right away, and have kids. While that plan worked for previous generations, it may not be the smartest or best approach anymore, especially as housing prices skyrocket and our lifestyles change. Not to worry – renting may even be a better financial decision depending on your situation. It’s all right to let go of the dreams of your parents; what matters is that you have financial goals of own and a plan to achieve them.

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Talking about money shouldn’t be taboo

A mom and a daughter sitting together

According to Walden University graduate Audra Sherwood’s research, “Differences in Financial Literacy Across Generations,” approximately four in seven Americans are financially illiterate and report being unable to manage their finances. On top of that, a FINRA study found that over 53% of adults say thinking about their financial situation makes them anxious and 44% say discussing their finances is stressful. The cycle of financial illiteracy and negative emotions tied to money will continue unless we learn to break the taboo.

The bottom line: Having open conversations about money is how we learn, grow and build healthy relationships. As much as it wasn’t part of my childhood, I’m trying to consciously have those teaching moments around money with my 4-year-old. It’s fun to talk with him about how he’s going to divvy up his birthday money and what he wants to save for next. Even though he’s still young, I can already see him grasping some basic financial concepts. As for my parents, they have also become more open about money and finances over the years, and we’ve had many conversations around planning for the future. These discussions ultimately led to their retirement this year.

It’s also important to remember that as much as our upbringing influences the way we see finances and wealth, we ultimately define our own stories and can change our mindsets. Figure out what money stories you tell yourself and where those ideas came from. Did a belief come from a particular situation or memory from a family experience? Does the belief conflict with your life now?

If the money stories you tell yourself no longer work for you, then redefine your goals to align with your values and stop living by unwritten rules defined generations ago.

Halbert Hargrove Global Advisors LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant. All opinions or views reflect the judgment of the author as of the publication date and are subject to change without notice.

Wealth Adviser, Halbert Hargrove

Julia Pham joined Halbert Hargrove as a Wealth Adviser in 2015. Her role includes encouraging HH clients to explore and fine-tune their aspirations — and working with them to create a road map to attain the goals that matter to them. Julia has worked in financial services since 2007. Julia earned a Bachelor of Arts degree cum laude in Economics and Sociology, and an MBA, both from the University of California at Irvine.