Not long ago I was sitting at a bar, waiting for red wine and wood oven margherita pizza, with a dear friend who I originally met back in university in a marketing class. It was pouring rain that evening and thanks to two concerts in the neighborhood our much-overdue date was relegated to a crowded bar top.
As the conversation turned from relationships to ambition, it became clear to me that Ashley was awkwardly dancing around the question she really wanted to ask, “how do you make money?!” I had recently embarked on a new career of entrepreneurship while she held steady in her coveted director of marketing position for a very posh establishment.
Through major life decisions, new jobs, lost jobs, travel adventures, career-changes, relationship trials and new homes Ashley and I have been close friends for nearly a decade. Yet, through all of those pivotal financial moments in our lives, we had never actually discussed our finances.
Not that she and I are an anomaly, certainly we’re an example of the norm and I think the fact that many women do not discuss their financial lives together is one of the reasons why we can sometimes experience imposter syndrome, sell ourselves short in salary conversations, and why today, after decades of effort to bring parity to male and female compensation, our comparative paychecks still fall significantly short.
We need to become more comfortable discussing money.
When the bartender placed our glasses of cabernet in front of us (in those really nice big glasses, the kind that make you feel like a grown up, even though you’re in your late twenties and most definitely considered a grown up), I decided to turn the conversation towards transparency and pose the question for her, “are you asking how I make an income and manage my money without a reliable salary?”
“Yes!!” She looked surprised, but also relieved.
You know how you can tell when your friend wants to ask you something because they want to know about your experience relative to theirs? I could tell Ashley was curious about how I was financing my life in comparison to her as a salaried employee, and being an advocate of financial literacy, it seemed an opportune time to open up the conversation.
So I explained to her my process working with clients and how I had determined what to charge. I’ll admit I did harbour some fear that she might be judgemental of my choice to be a contractor and wondered whether she’d think I was making too little, or too much, money. I silently wondered, what happens if I make more than her and then things get awkward? What happens if I make less and then she feels bad for me? More than anything, she was just really, really curious. It was like it was the first real conversation she had had with a friend about money, and I think it felt refreshing for both of us; it opened up a whole new realm of conversational topics around our ambitions and goals.
Not everyone is going to find that perfect moment when it feels just right to blurt out, “wanna know how much I make?” though, so here at Voleo we thought best to put together a few tried and true strategies for broaching the money topic with friends; the first step in discussing your investment goals and starting an investment club together. (If you’re curious why investing together is a fun, bonding, and lucrative experience not to be missed, read this recent post on why investing together is better.)
The goal here is to open the conversation with a neutral question so that if there is no pressure and no discomfort in discussing finances; if desired, your pal has an easy out.
4 Questions to Ask Your Friends About Their Personal Finances:
Topic: Asking If Your Friend Invests, and If So, How Much
What to ask: “I’m thinking about investing, do you invest? How did you decide how much to invest at a time?”
This is a good opener because, if willing, it allows your friend to share more. What’s key is the phrasing, “how did you decide how much,” compared to asking, “how much do you invest”, which can be an uncomfortable question to answer. This approach also allows for easy entry into a further conversation about how they invest and whether they prefer to manage their own portfolio or if they work with a group to manage their investments.
Topic: Discussing Investment Plans and Strategies
What to ask: “How did you decide what your (investment) goals are? Where do you get your information, what are your preferred sources?”
Rather than ask if they prefer one strategy or another, which can be an intimidating question to answer if your friend isn’t familiar with the method at hand or with the vast array of investment methods, be sure to ask an open-ended question that allows them to speak to what they know.
Topic: Discussing Salary Expectations
What to ask: “I’m thinking of asking my boss for a raise (or for contractors, I’m thinking of upping my client rate), how did you set your expectations?”
Discussing salary can absolutely be a sensitive question; it can often feel like society as a whole bases value on income, or net worth. This conversation should be based more on comparing how we equate the value of our work and understanding how your friends determine the value of their work. These standards can be incredibly helpful in determining your own financial expectations.
Topic: Discussing Financial Ambitions
What to ask: “When you think of what your future looks like in terms of career, do you also plan for what kind of salary you want to make?”
Follow it up with: “How did you determine what was right for you, what factors did you take into consideration?”
Bringing financial ambitions into conversation with friends, this question effectively sets an open tone. Because our salaries facilitate the lives we want, and we freely discuss our travel ambitions and the next designer item we’re lusting over, we should feel confident to discuss where we’d like to see ourselves in our financial futures.
We’d love to hear your feedback about conversations like this that you’d had with your friends. Tweet us @myvoleo with #investingwithfriends.
This article was originally published on the Voleo Blog and is written by Olivia Lovenmark.
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