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SOME FOLKS SEEM HAPPY to tell the world how much they earn, how much they have in the bank and what their portfolio is worth. Not me.
If I were to share my income and net worth, I’d expect some serious consequences, and not just from local thieves. In fact, I’m so cautious I have a plan not to tell anyone, except my wife Connie, if I win the lottery.
To be sure, overt sharing often isn’t necessary. The way we live can be revealing enough. Having two homes and spending much of the winter in Florida is a clear sign the Connie and I aren’t living solely on Social Security. Still, there are plenty of good reasons that I and others don’t reveal everything about our finances.
Getting judged. Will we be seen as rich and out of touch, or average and unsuccessful? Some folks may even fear being judged poor and deserving of pity.
Embarrassment. Could revealing details about our financial situation, including any debt, cause shame or guilt about lavish spending? Would learning about others cause us to question our earning power or life choices?
Power dynamics. Money can be seen as a source of power. Do we risk that by revealing more about our finances, which is a standard measure of success in our society?
Social norms. There are unspoken rules when talking about money. It might be considered rude or inappropriate to bring it up, even in casual conversation. “Nice to meet you. How much do you earn? Do you have a credit card balance? I don’t.” That’s going to be a short friendship.
Lack of knowledge. Many people don’t have a good understanding of personal finance and might feel insecure about that. Talking about money or investments could reveal their ignorance.
Comparison and competition. Talking about money can sometimes lead to rivalry, including among family members, which can be especially damaging. It might also create envy and resentment, and perhaps expectations of sharing.
Right or wrong, money is a key measure of success in our society. Sure, we can all list things that are more important. Still, what we earn, how much we spend and our net worth are yardsticks we all use. We even measure happiness using money. A recent survey found 59% of Americans think money buys happiness.
So, when it comes to our financial lives, mum’s the word.
I completely respect everyone’s right to hold private any personal information that they wish. This includes any personal finances details that they wish to keep a secret.
However, I disagree that money need be a taboo topic or even that the topic is best handled as a very private matter. We share openly about our finances with friends and family. Doing so allows us to have very open dialogues about many personal finance topics that would otherwise go undiscussed. By sharing openly we are leveraging our collective financial knowledge in a communal fashion which I believe leads to to betterment of all involved. I believe doing so helps to raise all boats with the tide. After all, all of us, collectively, are much smarter than any one of us.
Richard, I totally agree with you. I never shared my salary or our retirement income unless it was absolutely necessary.
We don’t even share the timing of our retirement.
A few years ago a younger coworkers asked me what my salary was. At the time, I was underpaid and I expected he was too. I told him, but bracketed the number with an explanation of my perception of my pay and what I thought he could do to increase his salary over years. Since then, he’s developed a huge amount of expertise and works very hard. I hope that he was able to use the info to negotiate higher salaries as he’s progressed.
Many of us need to be willing to share like this to squeeze more deserved money from our employers. I also thought this was a responsibility as a mid-career specialist training the next generation of people in my narrow field. However, I was definitely hesitant because of reasons in this article.