The personal finance blogosphere has a history of sharing information about finances. This includes information about net worth, as well as sources of income and regular expenses. I’ve never got too into the practice of sharing the details of my finances with the world; I’m not even that interested in sharing the details of my finances with my family.
When I say that I am reluctant to share the details of my finances with my family, I should point out that I don’t mean my immediate family. My immediate family, which right now consists of my husband and my son, know about my finances — they are an integral part of my financial reality.
My husband and I try to teach our son about finances through example, and also by discussing the reality of our financial decisions. While there is no need for my son to know exact numbers in terms of what we make, he does join in discussions about how we will pay for our new flooring, as well as our plans for boosting the retirement account contributions, and what it takes to pay for college.
Of course, my husband has access to all the financial information he wants, as well as exact numbers, and plans for the money. He doesn’t show a lot of interest in managing the finances, but he still keeps on top of where we’re at, and what makes sense for us. And he’s really starting to come around to the idea of only spending on things that are important to us, and really looking for a purpose in each expenditure.
On the other hand, I don’t offer details to my extended family, including my parents and siblings. We don’t share specifics with my husband’s side of the family, either. There’s no reason to. My side of the family doesn’t pry, and when my husband’s mother concernedly asks if we can “afford” something, we just tell her not to worry.
Keeping Your Finances Under Wraps
While it’s important that those you consider part of your household understand your finances, there isn’t a lot of reason to share details with everyone else. There are two big drawbacks to sharing your financial information widely with others:
- Taxes: Putting your information out there, especially if you share it online, can lead the IRS to question your return. If you provide regular income reports online, but your tax return tells a different story, that can become a problem. Sharing your information with your family members and friends can also cause problems in the long run. What if one of them turns whistleblower? While you’d like to think that your family wouldn’t do such a thing, what happens if a disgruntled cousin turns you in to the IRS, due to their intimate knowledge of your finances.
- New Expectations: Another difficulty arises when your family members create new expectations for you, based on your finances. If you make more money than a family member, you might be setting yourself up for added scrutiny. Additionally, some family members might think that they are entitled to receive help from you, or insist that you can “afford” to pay for certain things. These expectations can start to weigh on you.
While you might not mind talking about some aspects of your finances, such as a great deal you are getting, or some of the difficulties you might be facing, you probably don’t want to go into great detail. It’s often better to be low key about your finances. That way, you have a little less to worry about in the long run.
What about Accountability?
Many people share their finances with others in order to increase their accountability for better financial decisions. This makes sense to some degree. Sharing your goals can help you add more accountability to your life, and increase the chances that you will follow through with what you should do with your money. Sharing your financial goals can help keep you on the right track.
But do you have to share your financial goals with extended family members and friends? Look for other ways to hold yourself accountable, from setting up with personal finance software to creating goals as an immediate family. My husband and I try to hold each other accountable, and we also know that we have to explain ourselves to our son. That makes things a little easier.
What do you think? Should you share financial details with family and friends?
Photo by daveynin.