Talking about your finances with folks requires tact and the right timing. But throw in some eggnog and a dinner table packed with extended family, and any hope for a reasonably civilized conversation about money goes right out the window. Depending on your family dynamics and your financial situation, heading home for the holidays means preparing to field some majorly awkward money questions. Consider it a cross-examination where the courtroom is the dinner table, and the jury includes a great aunt, a distant cousin, and some in-laws. Any good lawyer would advise you to prep before you take the stand, so consider us your counsel on all holiday money talk. We've compiled an assortment of awkward questions you might have to field this holiday, along with some tactful ways to answer—or deflect—them.
Is that a real job?
Whether you're one of the 37 million freelancers, starting your own business, working in the creative arts, navigating the startup world, or doing anything that your relatives might not consider conventional employment, the answer is always YES. Because that is the truth and because you shouldn't have to defend your chosen career and the goals you're striving everyday to meet. It's important when faced with this question that you answer confidently, if not for their sake, for your own.
When Jacqueline Whitmore, founder of The Protocol School of Palm Beach and author of the book Poised for Success, was starting her own business, she had to deal with this line of questioning over the holidays. "My answer back then was the first thing that came out of my mouth which was, 'I have a real job.' That's all I said. Sometimes that's the best answer," Whitmore tells Time. If you're worried you'll come off as defensive, Whitmore offers another tactic. Try saying: "I am doing what I love, and you know what they say, 'when you do what you love, the money will follow.'"
How much are you making?
File this question under one you never have to answer directly, unless you really want to. Your income is your business, and unless you're asking for financial help, you are entitled to keep your business to yourself—especially at the dinner table surrounded by distant relatives.
Wisebread's Emily Guy Birken suggests responding to the question playfully —"for instance, by saying "Half of what I'm worth, I'd say," or by placing your pinky against your mouth and intoning 'One million dollars!'" Then, feel free to change the subject. ("So, what's the secret ingredient that makes this stuffing so delicious?")
You're still living in that place?
Here's one you might get from a parent or sibling. Whether they're prompting a discussion about your investment strategy or pressuring you into home ownership, the question may be well-meaning, but it's also dripping with judgment and condescension—and that's no way to begin a productive financial conversation.
One tactic is to shut it down with a simple, "Yes, and I'm still very happy there, thanks." But if you really want to address the elephant in the room, state your case. There are plenty of solid reasons millions of millennials are choosing to rent their homes rather than buy—from a volatile housing market to lowered insurance costs.
"Be honest with your parents, laying out the ways in which renting is a better fit for you right now and how much better off your finances are as a result," suggests Learnvest's Marianne Hayes. "A big mortgage payment may have meant not being able to afford your plane ticket home, for example." If they won't listen to your reasoning, maybe they'll listen to Warren Buffett who believes the best investment you can make is in yourself.
Why don't you hire your cousin/invest in her company?
Yeah, this one is really awkward. One of your relatives is playing job recruiter, or worse, you're confronted directly by a relative who wants you to invest your hard-earned cash into a business that doesn't seem financially sound.
There's nothing wrong with helping out a family-member in need, but the holiday table isn't the best place for financial matchmaking. If your cousin needs a job, you can respond by saying you'll be happy to help in any way you can, but that you're not in a position to make hiring decisions at this time. Feel free to ask him to send you his resume in the new year, and add that you'll be happy to pass it along or keep your ear out for opportunities that might be the right fit.
If you're being hit up for a financial investment you're not comfortable making, you can be a bit more direct. "Instead of saying you have anything against the product or her method of doing business, just blame your budget," suggests Refinery29's money expert Priya Malani. "If it's not entirely true, think of it as a white lie for the greater good: 'I'd love to but it's not really in my budget right now. Thanks anyway!'"
Can I borrow some money?
The answer to this question all depends on who's asking. Is it a parent or sibling? Is it someone you trust with financial decisions? Is their need dire? And most importantly, are you flush enough to meet their requests?
"If you're able to take on the responsibility, pinpoint how much you're comfortable offering," writes Learnvest's Hayes. "In other words, lend only what you can afford to part with. From there, establish a clear payoff timeline and put the agreement in writing."
Still, Hayes suggests listening to your instincts before you jump into any agreement. "If the idea of loaning cash to little bro makes you uncomfortable, trust your gut," she writes. "Politely saying that you can't afford it right now is better than a ruined relationship down the line."
When are you going to find a stable partner?
This one is a doozy. You may be dating someone who isn't as financially stable as your family would like. Even if it's an issue you've grappled with in your relationship, it's not healthy or fair for your family to interfere with your romantic choices—financially or otherwise—unless you're soliciting their advice. Being too defensive can open a can of worms, and take the conversation further down a road you'd rather not go. Try citing a positive career shift your partner has recently made or touting an achievement you're proud of them for. Then, change the subject as fast as you possibly can.
Any other awkward question we haven't covered yet...
You may not be able to predict what you'll be hit with before the holidays, but you'll know an awkward question when it lands.
"If it's uncomfortable for you, it's probably uncomfortable for everyone in the room," Bethany Palmer of TheMoneyCouple tells US News and World Report. Do yourself and everyone else a favor and follow her blanket suggestion for shifting the conversation. Try saying this: "That's an interesting question – let's talk about it later?" Then, ask about dessert. Better yet, ask if you can replenish anyone's wine glasses. A glass or two more, and they might forget all about it.
As the years go by, you'll likely need to make some large purchases here and there. Plan for these major life purchases by identifying them and saving early.
While it's possible to be frugal with many aspects of your lifestyle, there are certain events and possessions that will require you to spend a substantial amount of money. Thus, a wise course of action is to begin saving well ahead of time while thinking about your goals for the future. This way, you'll be able to maintain a stable financial state even when faced with those large expenses. The following are a few major life purchases that you should plan for.
A Wedding
Marriage is a joyous occasion that many people look forward to. However, a wedding can be quite expensive, often costing thousands of dollars. Your family and your future spouse's family will often contribute to covering this, but you should still prepare to spend a good deal of your own money on the ceremony. If you're in a serious relationship and are considering marriage, you should plan where the funds for the wedding will come from and take the necessary actions to accumulate them. It's also crucial to discuss financial matters with your partner, since your property will merge once you get married.
A New Car
Automobiles remain one of the top modes of transportation. As a result, you may want to purchase a new car at some point in your life. Although you may be fine with an old or used vehicle at present, you may one day be motivated by a desire to acquire something nice for yourself or by the practical needs that arise as you raise children. Whatever the case, obtaining a new car is a major life purchase that you should plan for.
In addition to setting aside funds to eventually put towards a vehicle, you should also aim to build you credit score. This is because your credit score will determine your available car loan options. The higher your credit score, the more you may be able to lower your interest rates on your car.
A House
Owning your own residential property is a worthy objective that you may hope to make a reality one day. Ideally, you should save about 20 percent of the total cost of a house before you buy it. This will allow you to make a larger down payment and thereafter face less interest on your mortgage.
As with acquiring a car, the mortgage options that you'll have can change based on how strong your credit score is. You'll want to increase your score as much as possible in the years leading up to buying a house so that you can get more favorable interest rates. In addition to contemplating down payments and mortgages, you must also remember that you'll need to deal with property taxes, insurance, maintenance and repair fees, and sometimes homeowners' association charges.
It's also necessary to hire a real estate agent to help you with the buying process. There are different types of real estate professionals. You should know how to distinguish between buyer's agents and seller's agents so that you can obtain favorable prices on homes as well.
When you are newly hitched and learning how to combine your essential legal and financial information as well as your accounts, it can be confusing.
Many people live together before getting married and have begun the process of combining accounts and sharing responsibilities. However, some people wait to do this only after marriage, and others wait until they're married to live together. Whichever path you've chosen, it's still crucial to know a few tips to manage money together as newlyweds to determine where you should begin and how you can remain on the same page.
Discussing Money Motivations
As we begin to share money with our significant other, we soon find out what one person may rank as a priority regarding money and the other may not. As such, sitting down and discussing money motivations is important. Two people who cannot agree on how to handle money may cause serious issues. This should include:
- How to deal with money following payday. Is a percentage put into savings? Is that the day to splurge on dinner, drinks, and more?
- The frequency and size of payments made to debts. Some people like to pay minimums, whereas others pay in full or make double payments.
- What do you each consider money well spent? Is it a new 70" 4K television? Is it an investment? Is it paying as much debt off as possible?
- How do you go about consulting each other before making purchases over a certain amount?
Establishing Financial Goals
After you evaluate the motivations behind your money and how it should be spent, you'll need to spend time together hashing out financial goals. As newlyweds, there are certain things on your list that you're going to want to save for. How do you go about that? How much of each paycheck will you dedicate to a particular fund?
Some things in the future worth making a financial plan for include savings and paying down debts. This is the time to be honest about your current financial standing. If you're looking to buy a home, you'll want to assemble a first-time homeowner financial checklist to begin to develop topics of conversation. Some of the things to consider setting goals for are:
- Student loans
- Car loans
- Future children
- A house
- Medical bills
- Delinquencies on credit reports
- Vacation and rainy-day funds
- Emergency funds
Budgeting Together
The more honest and open you can be with each other about the money you have and now the debts you share, the better. Implementing plans for the best ways to have the things that you both desire while still taking care of existing demands is important. These can be uncomfortable things to talk about; however, these conversations are necessary.
Following these tips to manage money together as newlyweds will allow you to have a starting point for conversations that can be tough to start. The sooner you and your partner get on the same page with finances and the responsibilities that come with them, the easier the transition will be and the sooner you'll find success.
It's the dream: money you can count on to keep rolling in, even while you sleep.
Passive income isn't entirely passive, of course. You'll put in work up-front to get the profits rolling, so don't relax in your recliner just yet. But with so many potential sources of passive income available to you, picking one or several will mean that the day you can finally kick back will draw steadily closer.
Rental Properties
Real estate is a tried-and-true wealth builder for a simple reason: people will always need somewhere to live. Research the market in a growing community until you know a good deal when you see it. You can maximize rent by fixing up a deteriorating property or upgrading a mediocre one. The key is to hire a property manager to do all the day-to-day landlord duties for you—and you'll need a good one. Smart investors put their profits in another property and repeat the process until they have a diverse portfolio.
A YouTube Channel
You can start a blog if you're more comfortable hiding behind a computer, but consumers are more likely to prefer video content. Post a series of “how-to" videos to answer questions about whatever you're an expert in.
You can put up any content you want, but if you don't want to commit to regularly updating it, focus on “evergreen" topics that will draw clicks for eternity. Ads will create your income, especially if your channel grows in popularity. Better yet, sign up for affiliate marketing. If you recommend a product and provide a link to buy it, you'll get a small percentage of those transactions.
Auto Advertising
If you don't mind vinyl-wrapping your car with an ad for a company, you can get cash just driving around and running your errands. Make sure you contact a reputable company that doesn't ask for any money from you; if they're the real deal, they'll evaluate your car, your driving habits, your area, and more. Bonus: the brighter the ad, the easier it'll be to find your vehicle in the parking lot.
Digital Products
What's something that people will pay for but doesn't require shipping on your part? Finding that item is what can supplement your income indefinitely. Write an e-book, charge for your cross-stitching patterns, design prints that people can digitally download, invent an app, record a “masterclass," or whatever else you want. Every time someone new discovers it, the cash register rings. With a little more effort, this is a potential source of passive income for you that can continue to grow. Once you build up a customer base, they might want more products. The good part is that it's up to you whether you wish to give it to them.
