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Family Dynamics
It Actually May Be Good to Fight About Money With Family
Just be careful where, when, and how you have those fights.
Posted December 20, 2023 Reviewed by Monica Vilhauer Ph.D.
Key points
- A new study finds that small fights about money may be good for families.
- Managing where, when, and how those difficult conversations happen can help bring ease to them.
- Families that handle financial tensions effectively tend to handle other tensions effectively, too.
Every year my siblings and I have a strict habit: After family gatherings, we share receipts, divvy up expenses, and balance out who owes what to whom.
And every time the process snags.
Someone takes too long to submit their contributions; someone disputes that one expense or another was supposed to be covered in the first place; someone forgets to respond to one email and the entire enterprise gets delayed or forgotten altogether.
But good news! Our messy money management system may just be saving our family.
A new study from researchers at Carleton University in Ottawa, Canada, finds that fights about money – as long as they’re small – may actually be good for families.
The reason: It means you’re talking about money in the first place.
Money has long been identified as a major source of tension in families. A study last year by Dixie Meyer and Renata Sledge at the St. Louis University School of Medicine found that 40% of disagreements reported by people in long-term relationships were based on finances. But it’s been less well known precisely what these fights were about.
In the new study, released this summer, three researchers in Canada, led by Johanna Peetz, searched through more than 1,000 posts on Reddit that were dedicated to relationships. The participants in this study were uncommonly diverse, across all sorts of life situations and economic circumstances. Money, naturally, dominated the posts. The three primary sources of conflict:
- Imbalance: One side was paying more of the bills.
- Irresponsibility: One side was really involved in decisions and didn’t care much about their outcome.
- Ideals: One side had different values than the others.
But here’s where the study got interesting. In the second part, the researchers studied 600 people for the quality of their relationships and how they navigated a recent financial disagreement. Here’s how the research team categorized what they found:
“Married couples that were discussing, even in disagreement, mundane everyday expenses and spending reported more positive relationship outcomes.”
In other words, the more time you spend discussing the day-to-day, relatively mild issues of money, the better off you’ll do when the stakes get higher and the healthier your relationship will be overall.
So on the surface, as Peetz said in a recent interview, “You should discuss finances more in relationships.”
But not so fast. Where you have those conversations, when you have them, and especially how you have them, matters, too.
Some years ago, I spent an afternoon with John Davis, who founded and ran Harvard’s family business program for two decades. He is the author of many books on families and money, and now teaches at MIT. [For more on this, see my book, The Secrets of Happy Families.]
“One of the basic rules of families,” Davis told me, “is ‘structure is your friend.’ Families are very good at avoiding money conversations; they’re not very good at having them. You need a plan.”
Davis has certain basic rules he tells families:
- All couples should have quarterly meetings to discuss financial matters; more if you’re having money troubles. (The same applies to extended families, if they have shared financial interests.)
- Avoid talking about money at birthday parties, families dinners, or holiday gatherings; those should be for fun.
- Have a third party or other neutral voice at the table; you’ll sit up straighter, ask more questions, and avoid bringing up grudges.
But his more subtle advice had to do with bridging perennial differences over #3 on the Reddit study: ideals. What happens when one or more parties are spendthrifts and the others are tightwads; when one member of the family favors saving and the other splurging? The most important thing, he stressed, is to bring these elements into the larger dialogue about money.
That brings us to the larger point: Families who handle financial tension most effectively are the same ones who handle tensions around other issues effectively. They find time for regular check-ins; they talk – a lot; and they prioritize play.
“What you’re trying to do in a family is create responsible, self-reliant, creative people,” he said. “Self-reliant, meaning they can take care of themselves. Responsible, meaning they’re accountable for their own actions. And creative, meaning they come up with their own dreams and set out to achieve them. Having money is not the destination in any of these cases. It’s just a means to those ends.”
This post is adapted from my newsletter, The Nonlinear Life.
