Talking about money is seen as taboo in many countries around the world. That’s not the way it should be. By avoiding talking about it, we are hurting ourselves more often than we think. We live in an information age where information and data are the currency of the world.
Do you discuss salary with your friends and parents? If you’re like me, more often than not, we don’t. Every time that I broached the subject, I saw the judgmental stares. Whenever I even just talked about money, people labeled me as “greedy” or too “money driven”. Even when all I did was talk about money.
However, when we don’t talk about it, we subject ourselves to information asymmetry. One side of the transaction wins over the other side because of a lack of information. That’s a huge power imbalance. People don’t lose because of big things, people lose because of a little thing such as a lack of information.
Therefore, we need to start normalizing talking about money. It’s a simple thing that puts power back into the people, consumers, and employees. There are sites like Glassdoor that puts out salary information. For the most part, they are actually accurate. However, they are wildly inaccurate at times as well.
Instead of trusting information from a website whose sole motivation is to make money from your time, we should share information from our trusted and loved ones. I do share this information with a few of my trusted friends. It’s done wonders for my negotiation stance and their negotiation stance as well. Win-win.
Before we normalize talking about it, let’s understand the reasons why we avoid talking about it. Could it possibly be that it’s the same as the first rule of Fight Club?
Why We Avoid Talking About Money
Before we go further into why we avoid talking about money, let’s ANNIHILATE that social share button and post to your favorite social media! The more we share information about money, the more comfortable people will be talking about it. Knowledge is power and companies know it.
That’s why they try their best to stop people from talking about it. Let’s fight back and group together. That’s a way to equalize and balance the playing field.
So with that said, let’s explore the reasons why we don’t like to talk about money.
1) People Think It’s Rude
When a stranger walks down the street and asks you how much money you pay in rent, you immediately dislike that person. You don’t trust them and it feels like a rude question in the first place. Fair enough. What about if a friend asks you that question? You still feel bad because it still feels like a rude question.
Companies stigmatized talking about money and branded it as “rude”. It’s a personal topic that shouldn’t be anyone’s business. That’s false. I talk about how much I pay in rent with my friends. In fact, I actually negotiated $50 a month off my rent because my neighbor told me how much she paid in rent.
It turns out she paid $25 a month less than me. That’s when I realized I had negotiation room for my rent. For some reason, people dislike talking about it because it’s not socially acceptable. They think that their power is gone for some reason when they give that up.
Will I ever think that it will be normalized? I do not. However, you can be the few who actually shares this information with friends and they share back. You can be a part of the group who has an equal playing field versus others. Knowledge is powerful.
2) Feelings Make it Hard to Talk About Money
Whether we like it or not, people have a lot of feelings around money. Whether you have a lot or a little of it, it’s an emotional subject. Even though money is nothing more than a medium of exchange, people are still emotional towards it. When emotions are involved, there will ALWAYS be judgement.
It doesn’t matter if the emotions are positive or negative. When emotions exist, judgement exists. People don’t like talking about money because it makes them feel something. Positive or negative? That doesn’t matter. When someone brings up the topic of money, some people feel blindsided.
They feel like “I wasn’t even prepared to talk about it and now you’re bringing this topic up out of nowhere?”. There are so much feelings involved, people instantly brand you or think of you as “greedy” when you bring it up. Even if all you do is talk about it, they will think of you like that.
No wonder it’s a taboo subject.
3) People Say Money is the Root of All Evil
There are so much propaganda around that highlights the idea that wanting more money is “evil”. Money is neither good or bad, it just is. As you’ve read from my “why is personal finance important?” article, money was just created to solve the timing differences between wants and needs.
However, billionaires and millionaires are hated these days. People see them as “evil”. Therefore, why would anyone talk about money when society tells them that it’s evil? That couldn’t be further from the truth. Don’t get sucked into the idea that there’s shame in having more money in your life.
The ones who shame you for having a lot of it are not rich themselves. They want others to feel bad for not having what they want, deep down inside. Money has done wonders for my life and I would never shame anyone for having a lot of it or more than me. If they got there through illegal means, then the criticism is justified.
However, if they didn’t, it’s not justified at all.
4) Just Talking About Wanting Money Makes You Look Greedy
This goes in line with the feelings reason above. I remember I tried to give my two weeks notice because I was getting underpaid. My boss knew I was getting underpaid (she told me) and I knew it as well. Some higher ups actually judged me as a result. He said “I can’t believe he would leave just because he wants more money”.
That’s the most classic guilt trip companies use to shame you. I work weekends, nights, and go above and beyond for my company. In return, I expect my compensation to reflect the value I provide the company. I never said that I wanted a lot more money. All I said was that I wanted more money.
That’s why talking about money is difficult. It makes you look greedy. Fair compensation is a subjective term. It’s not objectively defined. When people hear of investment bankers making $155,000 first year out of college, outsiders think they’re being overpaid.
If you actually experience and see the amount of work investment bankers do, there’s an argument that they are underpaid.
5) Companies Love to Punish Employees for Talking About Money
My story goes something like this. There was a meeting with my boss’ boss, me, and other employees. The conversation somehow got into the topic of salary. Other employees had perfect knowledge of how much some levels at the company earns. Then my boss’ boss didn’t miss a beat.
He IMMEDIATELY went on the attack and interrogated him. “What?! How do you know that?” “Who told you?” Were common questions. Companies love to punish employees for knowing more information. They are afraid of you being knowledgeable. Therefore, they make the process as uncomfortable as possible.
As a result, people don’t like talking about money. They fear retaliation. There are governments who ban books for people to read. Why? They understand that more information is more power. When there’s an entity who has a vested interest in keeping you ignorant, that’s when you know that something is wrong.
Censorship is bad.
Not Talking About Money is Holding You Back
When you have less accurate information to make a decision, you are making a suboptimal decision. If you avoid talking about money, it’s holding you back. These days, information is everything. Back then, the one who had the strongest muscles was the most powerful.
These days, physical harm is VERY socially unacceptable. Therefore, the one with the strongest muscles is not the most powerful. The one with the most information is the most powerful. When you have less information than necessary about whether you should take that job, that’s when you lose.
You have no idea whether you are making the right decision. You have no clue where you stand versus your peers. Therefore, when you don’t share this information with others, there’s going to be a power disconnect. I talk about my salary with trusted coworkers. I know how much they get paid and they know how much I get paid.
We both know where we stand and know how to position ourselves when annual reviews come around. When you don’t talk about money, the one who really wins is the company. They have a vested interest in keeping you from knowing that information. Don’t be held back. Be the one who moves forward.
Talking about money is a powerful tool and the first step in closing the income inequality gap. You can’t close the income inequality if you don’t even know it’s unequal in the first place. Your landlord may be depending on your uncomfortable feelings to not talk about how much you’re paying in rent with your neighbors.
After all, they win when you are more ignorant about whether you are overpaying or underpaying. It’s underrated how powerful talking about money is.
We SHOULD be Talking About Money
Talking about money should be normalized. Why should we normalize talking about it? Money is a life changing subject. It has the chance to ruin or build your life. When you don’t know whether you are underpaid, you have no negotiating leverage.
Companies love to play games. They love to be rude and ask about your salary because they don’t want to overpay. Every single company who I told my salary to used that information against me. Without shame. One company actually went the other way with my salary. He undercut me and offered below what I was getting paid.
Of course, I negotiated that above so the final compensation came out above my current salary. However, I disliked that they played games. I rejected them. To this day, I have no idea or clue if it was a good offer or not. Even after the negotiation was over. That’s how much leverage others have against you without more information.
Another example comes with my coworker. She was $30,000 in student loan debt that she openly talked about with me. As a personal finance junkie, I explained to her how it’s in her best interest to pay that down as much as possible. When bonus season came around and we both got a $30,000 bonus, I advised her to pay that down.
She paid 1/3 of her debt in a single payment. That was great. It’s been two years and I can’t imagine how much better her financial position is now. Talking about money can actually elevate your financial position onward and upward. In ways you never imagined.
You Don’t Have to Share Everything About Money
Talking about money is great and all but there is a downside to it, as well. I love to be balanced and it would be wrong of it to not talk about the negatives. You don’t HAVE to talk about your salary and income with your friends or strangers if you don’t want to. Some people are not trustworthy at all.
Additionally, people have done bad things to rich people for less. It can literally be unsafe for you to talk about how much you have. You never know who is listening and what they will do with that information. It’s not like if a stranger randomly walks up to me and asks how much I pay in rent, I’ll let them know.
That’s just not right. I have no clue if they will see that information and think that I am rich or poor. Therefore, you should use your judgement in deciding who you want to be talking about money with. Some people are not trustworthy people and it’s not always a good idea to let the whole world know about it.
There are some things that you can keep to yourself. No one else in the world has to know but you. It’s all subjective in how you want to approach the topic. However, if you have family members that you trust, it’s not a bad idea to share information across the board. I know how much my mom and dad makes and we talk about budgets often.
It isn’t a one size fits all decision. However, talking about money should not be as taboo as it is today. It’s a topic that people should be able to freely talk about without judgement, emotions, or jealousy. It may just change your life for the better.
Hi David, this is an interesting topic and I hope you will appreciate my thought on it. I was born in 1960. My teens and 20s were a time of double-digit inflation, which resulted in a lot of salary-compression, i.e. I had an entry-level professional job that paid $15K in 1983 and the people hired in 1984 were paid $18K. No salary-parity increases for us, and it caused a lot of hard feelings. After 30, some of my friends went on to successful careers in law and medicine; their salaries were several times mine by age 40.
There is a ‘5 monkeys’ concept, based on the idea that monkeys are most like the five they spend the most time with. It applies to salaries, too. The star baseball pitcher doesn’t really hang around with eighth outfielder. It can get tricky, and when you are on the ‘wrong-side’ of information-asymmetry, as you say, it can be frustrating not to know.
Whether we like it or not, people take the information of one’s salary and use it as a metric for the person’s value. Would they make a good mate who could be a provider? No? Could they afford to live in my neighborhood? Could I in theirs? I have seen this happen where two friends are peers are on a similar salary track, but when one makes a jump then it causes a ‘break’. I’ve been on both sides of it, and it is much harder to be ‘left behind’. There are lots of questions of self, “how can I make more?” “how can I get what they get?” and then there are questions of others, “why don’t you make more than you do?” “when are you going to level-up?”
Anyway, the issue you discuss in this excellent post is not new. Sometimes people use ‘talking about money’ as a way to assert dominance, and the status-flexing is only begun by people who have a good idea they will win. “I’m a doctor.” = I make a lot of money. “I drive a Tesla” same thing. Once the subject is broached, the ‘information asymmetry’ will eventually become a ‘status asymmetry’. And it will change the relationship from family/friend to more successful/less successful. I’m not saying that you shouldn’t do what you propose here, just that there is more going on that a simple exchange of ‘information’.
Hope you find my thoughts of interest.
Whoa, I’m just honored that you commented on my blog and read the post!!
That’s a very new and interesting take that I haven’t considered before. There is always the never ending part of comparing oneself to another, especially when it comes to money. Salary is definitely one of those topics that can ensure jealousy among others because you never get paid what you deserve, you get paid what you negotiate. One person just might be better than another at smooth talking and not necessarily reflective of how much they are worth to the company.
There are definitely times where it’s not smart or advantageous to reveal your salary and talk about money. I only talked about money in extremely rare situations where I felt that I could trust them. I haven’t failed so far but it’s definitely a risk to do something like that.
I actually felt this way when my friend got a whopping 37% increase in salary in a single year compared to a 7 – 10% increase in my salary. Especially since I was ahead of him in compensation until this year. It did kick me into overdrive to look for additional income sources because I can’t rely on my company anymore to pay me what I think I’m worth. I would be lying if I didn’t feel a hint of jealousy throughout that realization though.
Great perspective that I haven’t considered or thought about. Especially since money is such an emotional subject. Thank you for stopping by again, JayCeezy!! I really really appreciate it.