How to Discuss Finance with Friends

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Discussing finance with friends isn’t easy. Whether there’s one friend in our social group that earns far more or far less than the rest – if we even have an idea of what they earn! – we know someone who is of high net worth and feel awkward around them, or we need to borrow a few hundred dollars from a mate to avoid relying on an expensive payday loan, money is often a no-go area for most of us.

Considering how willing many of us are to discuss everything from religion to personal details that might be best kept to ourselves, not to mention plaster this all over public social media sites in some cases, it does seem odd that money remains this big taboo subject that must never be mentioned.

Money Talk Doesn’t Have to be Hard…It Can Even Help You!

Talking about money with your friends doesn’t have to be as difficult as we all fear it will be. For starters, we can avoid the “how much do you earn?” question. What does that matter?

Instead, you can talk about financial reporting in the news, personal experiences with your bank or personal loan provider, or something else. You may not realise it now, but these conversations can be valuable as a means of sharing knowledge and experiences. Imagine how it would feel if you’d fallen for a low interest advert, you tell your friends, and another couple of them say “Yeah, the same thing happened to me a couple of years ago,” or vice versa. Had you had a discussion about it, you could have all shared in the knowledge of how some personal loan providers use the low interest marketing hook to get you to take out their product, and all avoided this scenario when next looking for a personal loan.

Research groups we conducted here at NOW FINANCE in 2016 bore out this scenario to some extent. Out of one particular group of eight people only one individual was aware that banks would charge different people different interest rates. If we took that as a percentage and spread it across Australia, that’s potentially millions of people who have no idea how the banks and other lenders are coming up with their interest rates for the financial products they’re using!

At the same time, a recent customer survey conducted by ourselves revealed that 40% of people discuss their personal loans with their friends and family members.

Perhaps particular aspects of personal finances aren’t the taboo subject they once were, even if money as a whole it still widely regarded as a no-go area for most of us.

What’s the Problem When It Comes to Money Talk?

One of the big problems is that, when the awkward discussions begin, our own sense of unease leads us into not being entirely honest with those around us. We might overstate how much we earn or how much money we have in the bank or we might not be entirely honest about our personal financial habits.

Sometimes, this isn’t a problem. However, for some people, overstating what they earn or how much they have in the bank can lead to serious problems, particularly if they take out a personal loan they really would be better off without just to buy a better car, for example, or even just so they can show off their bank balance!

How to Have Financial Conversations with Your Friends

Still stuck for a conversation starter? Here are some options that you can turn to the next time you want to discuss finances without diving straight in with something direct.

How are You Paying for That?

This is a great question because you might even learn about a great finance product or deal that you weren’t already aware of, or pick up on a friend’s good financial habits.

When a friend next mentions their next holiday or a car they’re looking at buying, just ask how they’re planning on paying for it. You never know what you might learn.

Likewise, you can also mention that you’re planning on taking a once in a lifetime holiday, buying a car, or undertaking some home renovations, and are mulling over how you’re going to pay for it. This gets the conversation going without you asking a question and potentially feeling like you’re treading on their toes.

Remember too that when your friend is discussing their own options, you can recommend a NOW FINANCE personal loan if they’re unsure of what to do, or have savings but don’t want to use them.

How is Your Superannuation Invested?

There’s no conversation and mood killer quite like asking how much someone’s superannuation is worth, and learning that they have a hell of a lot more than you and are probably going to be able to retire five years earlier.

Whether you have been making changes to your own superannuation recently or think it’s time to assess where you’re at with it, ask your friends how theirs is invested instead. As well as learning what your friends are doing, you might pick up some tips on why cash, shares, or property, among other assets, are better or worse for investing than others. You might pick up enough to give a significant boost to your own superannuation fund.

How much earlier do you want to retire?

What Business Would You Start?

This one is a potential goldmine if you have a friend who already runs their own business, as you can ask how they got started, what inspired them, whether they always wanted their own business, and various other questions. Usually they’ll be only too happy to discuss it, especially if they’ve been a success in what they’ve done.

Otherwise, just ask the question “What business would you start?” and let the ideas flow. You could quite easily have a lightbulb moment and get inspired with a great idea.

Who knows, this time in a year or two you could be the one being asked how you’ve done so well!

What’s Your Mortgage Rate?

Changing your mortgage can save you thousands of dollars, yet strangely many Australians don’t bother to do it.

Ask your friends how much they’ve saved or what their mortgage rate is.

The beauty of this question is that it’s beneficial for all. You may discover your mortgage rate is the best and be able to dish out tips or learn how to save thousands yourself. Collectively you and your group of friends could easily save enough to take a fantastic holiday next year, or even make a second mortgage on a beach house affordable.

Do You Know a Good Financial Advisor?

This one will pique curiosity – why do you need a financial advisor? – but is a great way to start a conversation about money if you don’t want to ask anything else. For example, if you don’t want to ask the question about superannuation investments, ask friends if they know a financial advisor, and when asked why say you want to discuss your superannuation. Your friends might leave it at that, but it’s far more likely to get the conversation going.

Don’t Be Scared…Financial Conversations Can Help You!

Don’t have unproductive conversations about how much you and your friends earn or how much money you all have in the bank. Instead, get the financial conversation started by looking at the topics suggested here, as well as what’s going on in the news, and you’ll all benefit from shared knowledge and likely find numerous opportunities to save potentially huge sums of money.

Disclaimer:  This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs.  Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.


Approved customers only. Terms, conditions, fees and charges apply. All applications are subject to NOW FINANCE’s lending and approval criteria. Settlement times may vary depending on circumstances. Loan repayment terms range from 18 months to 7 years. Interest rates range from 7.45% p.a. (9.07% p.a. comparison rate) to 16.95% p.a. (18.53% p.a. comparison rate).

*Comparison rates are based on a loan of $30,000 over 5 years.

WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

EXAMPLE: An unsecured personal loan of $30,000 borrowed for 5 years with the interest rate of 7.45% p.a. (9.07% p.a. comparison rate), would estimate to a minimum total amount payable of $37,741.60 via the weekly payment option (including a $495 establishment fee and $13 per month administration fee). Rates are subject to change.

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