Money Talks with Friends? Yes, If It’s About Inflation, Homebuying, Retirement or Investing
Credit card debt is a taboo topic for many, but less so among Gen Z and Millennials.
April 6, 2022
Four in 5 Americans (80%) feel comfortable talking about money topics with friends, and women are just as likely as men to feel this way (82% vs. 77%).
Nearly 2 in 3 Americans (63%) say they are more comfortable talking to their friends about money now compared to prior to the COVID-19 pandemic. The main reason for this shift in sentiment is because current economic factors, such as inflation, are impacting everyone around them (37%). This was especially true among women (40%).
The stigma around credit card debt appears to be softening. Millennials, aged 26 to 41, (36%) and Gen Z’ers, aged 18 to 25, (34%) are more likely to say they feel comfortable talking about credit card debt with their friends than Baby Boomers aged 58 to 76 (23%).
Contrary to popular belief, Americans actually have no problem talking about money. A recent Tally survey of 2,064 U.S. adults ages 18 and older, conducted online by The Harris Poll, found that 80% of Americans feel comfortable talking about money with friends.
But it wasn’t always this way. Nearly 2 in 3 Americans (63%) say they are more comfortable talking to their friends about money now compared to prior to the COVID-19 pandemic. This was especially true among younger adults, at a similar rate for both men and women.
But that was before the pandemic. In recent years, this sentiment may have shifted. An overwhelming majority, and almost equal proportion, of men (82%) and women (77%) are comfortable talking about money topics with friends. This was even higher among men and women aged 18 to 34 (87%, 84%).
Moreover, the adage about women being afraid to talk about money appears to be generational. Older women aged 65 and older (31%) are more likely to say they do not feel comfortable talking about any money topics than younger women aged 18-34 (16%) and aged 35-44 (16%).
So what has changed? Why are people — especially younger women — more open to discussing money now?
In the last two years, some money topics have become so ubiquitous that it’s almost impossible to not discuss, while other topics have become more socially acceptable.
What’s driving the change: a desire to find more shared financial experiences
The top reason why Americans feel more comfortable discussing money now than prior to the pandemic is current economic factors (37%), such as rising inflation and increasing interest rates, are impacting everyone around them.
The economic impact of the pandemic was so sudden, far-reaching and beyond anyone’s control that it became a shared experience — something that you can discuss openly without being judged. This may be why 2 in 5 women (40%) cite this as why they feel more comfortable talking about money with friends now than before the COVID-19 pandemic.
The second most cited reason is an interest in knowing how one’s financial situation and experiences compare to others (23%). This reason was notably higher among younger adults, suggesting a generational paradigm shift.
Millennials (30%) and Gen Zers (29%) are more likely than Baby Boomers (17%) to say they are more comfortable talking about money with friends now compared to prior to the pandemic because they are interested in knowing how their financial situations and experiences compare to others.
Similarly, 22% responded “they have seen friends or family end up in a bad financial situation and do not want to end up like them.” This reason had a similar generational split — a telling reflection of how the last recession’s lasting impact on younger adults. Millennials (32%) and Gen Zers (28%) are more likely than Baby Boomers (15%) to say they are more comfortable talking to friends about money now compared to prior to the pandemic because “they have seen friends or family end up in bad financial situations and do not want to end up like them.”
As for who is ending up in bad financial situations, younger adults are more likely to have been impacted. Millennials (27%) and Gen Zers (22%) are more than twice as likely as Baby Boomers (9%) to say they are more comfortable talking about money with friends now because the pandemic put them in a tough financial spot and they needed financial advice.
The sentiment around talking about money is cyclical. As money conversations become more common, more people become more willing to talk about money. Nearly 1 in 4 Americans (22%) say they have become more comfortable talking about money with friends now versus before the pandemic because others around them are talking about their finances more openly.
What’s everyone talking about? The economy, saving for retirement and buying a house.
The so-called “money taboo” only applies to certain topics. The money topic that’s easiest to talk about are shared economic experiences. Half of Americans (50%) feel comfortable talking to friends about headline drivers like inflation (i.e., the rising costs of goods and services), while nearly a third (32%) are comfortable having conversations about rising interest rates.
Inflation was the top money topic people feel comfortable discussing with friends among Baby Boomers (57%), Gen Xers (52%) and Millennials (47%). However, this was not the case for Gen Zers, more of whom feel comfortable talking about buying a house (45%) than inflation (35%).
Though not the most commonly discussed money topic, many Americans feel comfortable talking about various financial goals with their friends: buying a house (42%), saving for retirement (40%) and investing in the stock market (36%).
Interestingly, what are considered comfortable money topics varies by demographics — which hints at what each group might be prioritizing more. The most notable variation is between younger women and younger men. The top money topics that women aged 18-34 feel comfortable talking to their friends about include buying a house (47%), inflation (41%), investing in the stock market (35%), and student loan debt (35%).
Meanwhile, the top money topics that men aged 18-34 feel comfortable talking to their friends about include investing in the stock market (47%), saving for retirement (44%), inflation (43%) and buying a house (42%). With the order almost flipped, it suggests that homeownership is more top of mind among younger women, while younger men may put more stock into their investment portfolio.
Credit card debt is a money taboo topic for most — for now
The money topics that most Americans shy away from are ones where perception of individual accountability is strongest. Only 28% of Americans are comfortable talking with friends about credit card debt. The proportion of those comfortable talking about “Buy now, pay later” debt (21%) and student loan debt (21%) is the same and not too far off from credit card debt. Unlike other money topics, debt often comes with judgment and the perception that you made poor spending choices, whether that is truly the case or not.
However, the taboo around debt appears to be softening. Americans carrying credit card debt (36%) are more likely than those who are not (22%) to feel comfortable talking about credit card debt with friends. This openness also appears to be generational. Younger adults are more likely to feel comfortable talking about credit card debt with friends, even though they carry less of it. Today, Baby Boomers (43%) Gen Xers (50%) and Millennials (48%) are more likely to have credit card debt than Gen Zers (30%).
Tellingly, Millennials (36%) and Gen Zers (34%) are more likely to say they feel comfortable talking about credit card debt with their friends than Baby Boomers (23%). Comparing across gender lines, this sentiment was similarly high among men aged 18 to 34 (39%) than women aged 18 to 34 (33%). This suggests the driving force for this change is the openness among both young men and young women. As younger generations become more open to discussing money, it’ll only be a matter of time before debt becomes less stigmatized.
3 tips for bringing your money conversations to life
Are there steps you can take to have productive money conversations and finally tackle your credit card debt? Tally’s personal finance expert Bobbi Rebell CFP® offers the following advice:
Set financial boundaries. Planning a trip or a big night out with friends is always exciting but do you find yourself starting to run calculations in your head? When this becomes a common theme in your life, not only is it stressful, it can put an unnecessary financial burden on your life especially when you’re actively trying to get debt free. If someone recommends something that’s out of your budget, find an alternative that fits within your budget. Providing context can often be helpful as well. For example, you could share with your friend that you’re working on rebuilding your emergency fund, so rather than going out for a pricey dinner, you’d love to meet your friend for a drink. Don’t stop living life, but set boundaries that will set you up for success.
No pointing fingers. Life throws a lot of curveballs and sometimes you’re forced to rely on credit cards to make it through the storm. There’s no use pointing a finger at yourself or even others. The bottom line is that it doesn’t matter how you got into debt, it’s that you face it head on and tackle it before it becomes a bigger burden to navigate. It’s on you to address your credit card debt and by taking control of your finances, you are in the driver’s seat and setting the destination. Begin by facing the numbers and list out all your debts, and assess your interest rates. It’s hard to make progress when you’re not able to pay the principal on what you owe and consider using tools like debt automation apps or debt consolidation options.
Cut non-essential expenses. If you have a goal to save more money, a quick way to do this is to re-evaluate your non-essential spending. Money flows two ways- it flows in, and it flows out. Cutting back on the outflow is a quick way to save. Look for monthly expenses that you can either scale back or cut out all together. For example, you may want to keep your gym membership for your mental and physical health, but scale down to one streaming service — you don’t need Netflix, Hulu and HBO Max. Keep the things that truly bring you joy but won’t set you back in your goals or create new debt.
This survey was conducted online within the United States by The Harris Poll on behalf of Tally from February 10 to 14, 2022 among 2,064 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact email@example.com.