This year, families gathering during the upcoming holiday season may be more concerned and focused on their financial future than ever before. And a tough challenge they could face is how to talk with each other about financial matters, what questions to ask and what pitfalls to avoid.


A national survey sponsored by Wachovia Securities, LLC has found that when families gather for the holidays they are more likely to talk about politics, sports or what's on TV than long-term financial matters.

Only three of 10 respondents to the survey, conducted by Richard Day Research Inc., acknowledge ever having discussed financial plans at a regular family gathering or at a meeting called for that purpose, but nearly two thirds believe that their family is aware of their preferences regarding finances. There is peril in that assumption, said Brian D. Carpenter, Ph.D., associate professor of psychology at Washington University in St. Louis.

"Family members often assume they know about each other's financial situation and preferences," Carpenter said. "But then some crisis arises in the family, and people realize they don't know as much as they thought. Or what they thought they knew turns out to be inaccurate. Rather than relying on assumptions, families benefit from talking with each other about their circumstances and sharing important documents."

People who communicate about money with family members have distinct advantages, Carpenter noted. "Families that know about each other's financial status, life goals, priorities and desires tend to be better prepared to make informed, rational decisions during a crisis or major life event."


The survey of 1,200 American ages 25 and older revealed:

-- Privacy and embarrassment are two key factors preventing family members from having conversations about money and financial planning.

-- Nearly four in 10 said that finances are private, even among family.

-- Social and financial differences among family members also inhibit financial conversation, and lack of financial know-how also appears to be a barrier.

-- There were minor differences in responses along demographic lines. More affluent and college educated respondents were slightly more likely to talk to families about finances. Women indicated more hesitancy regarding family financial talk than men.

-- Of the survey respondents who reported having participated in a family financial discussion within five years, only a quarter said the meeting had occurred without the impetus of a major life event.

-- The most common occurrences prompting family financial conversations were job or business transition, illness or major surgery, death of a family member, or preparation of a living will or estate plan.

Kortney Christensen, director of Life Event Services at Wachovia Securities, said, "Particularly during these volatile economic times, dialogues about changes in life plans and financial status -- or even a conscious decision to change nothing and ride out the present upheaval -- can help make everyone in the family better informed and more secure."

Christensen, CPA and CFP(C), manages a group that assists financial advisors and their clients on issues such as Social Security, executive compensation, tax planning, estate planning, and education planning. "Family financial talk can strengthen relationships, bring peace of mind, and ensure more positive outcomes," she added.