Talking about money can be awkward, difficult or even impolite depending on the cultural context. And yet new research suggests that having these conversations may actually be the secret to overcoming financial anxiety.
Americans who discuss their personal finances experience increased feelings of control. That sense of control leads to reduced anxiety, according to a new paper in Organizational Behavior and Human Decision Processes by Emily Garbinsky of Cornell University, Matt Meister of the University of San Francisco and Joe Gladstone of the University of California at San Diego.
The research found that the frequency of an individual’s “financial disclosures” matters: Anxiety reduction was observed when disclosures were repeated, whereas one-off instances had less of a link. A financial disclosure is an individual’s sharing of any personal information with others through digital, spoken or written means, like a social media post, in-person conversation or text message.
“Financial anxiety represents a critical public health challenge that significantly impacts psychological well-being and performance at work,” the researchers wrote. “Across eight studies, we demonstrate that personal financial disclosure consistently reduces financial anxiety.”
Should you talk about money?
Cultural norms are just one barrier to discourse about money. Americans also tend to be concerned about stress or discomfort — their own as well as their conversation partner’s.
While this new research suggests that leaning into difficult personal finance conversations is valuable, it’s important to consider the social or professional setting.
Over time, Americans have become more comfortable talking about money. Society still looks down on “pocketwatching” — and you shouldn’t ask someone how much they make at the dinner table. But even the folks who write Emily Post’s Etiquette, a best-selling book on etiquette rules, say that talking about money is in.
“When approaching the subject of money, try to raise it tactfully. ‘I’m looking to get a better sense of what salaries for my job look like in this market, would you be willing to discuss it?’ is more polite than, ‘What do you make? It’s no big deal to share,'” according to the latest 2022 edition of the text.
The university researchers’ paper mentions that recent salary transparency laws and the popularity of internet personal finance communities are likely indications of an increasing openness to talking about money.
“Taken together, these trends suggest that talking about money may no longer be as taboo as it once was in Western societies,” the researchers wrote. “This change potentially allows individuals to reap the hypothesized benefits of personal financial disclosure — specifically, greater feelings of financial control that help reduce financial anxiety.”
In one of the studies, subjects were instructed to talk about money with someone else on a regular basis, and then their anxiety levels were compared to control groups. In addition to documenting a stronger effect when conversations were more frequent, the researchers also found that the content being discussed mattered. Talking about factors people can control, like budgeting, spending and saving, led to the strongest benefits, exceeding the impact of conversations around uncontrollable events like job loss or unexpected expenses.
Another study involved an analysis of over 500,000 threads posted to the Reddit community r/PersonalFinance. As researchers expected, they found that users showed fewer expressions of anxiety in their online activity the more they posted about personal finance.
Interestingly, the paper found that talking about money anonymously on discussion forums like Reddit led to as strong — if not stronger — benefits compared to IRL conversations. Regardless of the platform, their key finding is an apparent benefit to facing financial realities head-on simply by talking about them.
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