Many people divulge more than they need to about their financial situations to their friends and family. There was a time when I was one of them. Similar to my last blog post about when to pull out of savings, this is a personal choice and you need to do what makes sense for you. If telling all to your best friend is your mutually agreed upon thing, then go for it. But I would hope being thoughtful about how much you say would be a priority. I’m not saying don’t share, I’m saying don’t be specific.
“How much do you pay in rent?” Have you ever been asked this? I have, a trillion times–and I’ve answered it far more than I care to admit. I’ve asked people too, but I put that practice to bed in recent years. Honestly, the person who poses this questions is almost always innocently asking; it’s not meant to offend–but I find it so nosey! What does it matter unless you are trying to move into my building? Do you just want to compare your rent to mine and feel good or bad depending on how we measure up against each other? I do not see the point. If you want an apartment in my neighborhood–go online and find one. You don’t need to know how much I pay to do that. I have experienced the negative side of divulging too much in having multiple friends dangle the cost of their place being cheaper than mine in front of me, without actually saying what they pay. I don’t think it’s malicious–but I do find it weird. I guess I should be proud of them for being vague, since that’s the point I’m trying to make. Vagueness is okay.
And don’t get me wrong, I am curious as hell about this sort of thing when I walk into a new place. But that’s what real estate apps and Craigslist are for! I look at houses for rent on CL regularly, so I already have an idea of the market in any given neighborhood around here. Same with real estate. Ask me anything about housing from LA to Eureka and I’ve got an answer. I’ve checked it all out. My point is, if curiosity is really your motive, there are other ways to satisfy that than putting your friend in the awkward position of having to answer this question. I’m guessing people don’t realize it is an uncomfortable thing to ask, and that is why I believe it’s innocent on their part. This then begs the question, how do you deny giving an answer? How does one politely say, “oh, we’re not sharing that information”. There’s no obvious way around this. You wouldn’t ask someone what their mortgage is would you? Or how much their house is worth? Why is it different for renters? It shouldn’t be.
Let’s get something straight: I care about how much you make. I’m curious, I want to know, but I’ll never, ever ask. If you want to tell me, cool! But I will never, ever tell you. Not because I don’t trust you my beautiful friend, but because I see no reason anyone else needs to know. Aren’t you in essence giving power to the person you relay this to? If they are able to see how well you do, for example, aren’t they better able to judge your subsequent financial decisions? I know what you’re thinking. “Anne is my best friend and would never judge me like that”. You’re wrong. We’re human. If she knows you make $300,000 a year and don’t tithe to your church, she’s judging you (and righteously I might add)! Similarly, if she knows you make $40,000 a year and buy a brand new car with all the upgrades, she’s going to question that. Why give anyone that kind of power over you? Better to let sleeping dogs lie and keep your cool when it comes to sharing this very important and private part of your life.
If you have one, good for you! If you don’t, apply this to your future self. Similar to your income, sharing this information means putting all your cards on the table. And for what? So people know you have enough saved to pay for your kid’s college? That you are rich? The reverse is also true. In my pre-frugal days, I once had a friend ask me if I had anything saved and I said “no” and she was shocked. It kicked me when I was down and only made me more anxious about my financial situation. You don’t need people knowing if you do or don’t have any money. I know how hard it is to practice this train of thought, but you have nothing to prove.
This is the one exception I can think of at the moment, however I would say to tread carefully. Debt is a crisis in this country. It is a problem that needs fixing and any advice or help one can get should be taken. If that requires you to divulge what your situation is in terms of a financial collapse, you have my support. I think any sharing with the hope of fixing your situation is good sharing. When I had debt, I told people about it–but it was more complaining. That is not good or productive sharing. When I paid it off, I proudly told people and a few asked how much it had been. I told them and obviously, I did the same here on this blog–but again, the motive matters and this is truly to encourage.
I do not have it all together. I write about money because I love managing it and finding creative ways to make it work for me. But we still struggle, we still overspend and we have to take out of our emergency fund when the going gets tough. I will tell anyone what I spent on a dress or a piece of furniture, because I almost always assume the motive is they want something similar. And those aren’t really “mine to hide”, since if you know I got it at Nordstrom, you can find the price yourself. But I am trying my best to be more tight-lipped when it comes to other areas of finance because I have only seen it as damaging in the past. So there you have it– a few of my standards for social finance. What are your personal boundaries for what is okay to divulge and what isn’t?