In Western cultures, talking about money is considered taboo. But new research from the Cornell SC Johnson College of Business challenges that notion and finds that people who regularly discuss their finances - whether with family, friends or even strangers online - experience less financial anxiety over time.
Emily N. Garbinsky, associate professor at the Samuel Curtis Johnson Graduate School of Management, and her co-authors find that the more people talk about their personal finances, the better they feel.
"Many of us were taught that discussing salaries, debt or financial worries is impolite or even shameful," Garbinsky said. "But according to our research, bottling up these money worries might be making things worse."
The paper "Opening Up About Money: The Unexpected Benefits of Personal Financial Disclosure," published July 8 in Organizational Behavior and Human Decision Processes. Co-authors include Matt Meister, assistant professor at the University of San Francisco, and Joe Gladstone, assistant professor at the University of California, San Diego.
Financial anxiety, defined as the stress and worry people feel about their finances, affects over 60% of adults in the U.S. and has real consequences - poor mental health, reduced job performance and even higher accident rates in some professions.
The researchers found that initiating a conversation is often the best place to start. They conducted eight studies - including surveys, experiments and analysis of nearly 1 million online posts - to understand how talking about money affects our financial stress levels. They found that sharing information about one's financial situation lowers anxiety by giving an individual a greater sense of control. Putting financial concerns into words helps organize one's thoughts and shifts the mindset from confusion to clarity, they found.
One of the studies asked people to talk about their finances with another person of their choosing once a week for a month. Compared to those who talked about non-financial issues, the money-talkers ended the study with less anxiety, both financial and general. What's more, people who talked about controllable topics, such as spending and saving, saw a bigger drop in anxiety than those who talked about things out of their hands, like job loss or medical bills, suggesting that what you share matters.
The researchers found that talking about something within your financial control reduces your financial anxiety to a greater extent than talking about something outside of your financial control.
"While face-to-face conversations can help, sharing online is also effective and might be even better because digital platforms give people more time to think, write, edit and reflect on what they're saying," Garbinsky said.
Building on this idea, the researchers discovered that people who frequently posted about their finances in online forums used fewer anxiety-related words over time. The more they posted, the better they felt.
Despite these consistent findings across both in-person and digital communication forums, people don't seem to comprehend that talking about money helps. Many expect that talking about money will make them feel worse.
In a pilot study, the research team found that people anticipate that talking about money - as opposed to other sensitive topics, such as health, parenting or job performance - will increase their anxiety. They found the opposite to be true.
"And in a world where financial anxiety is widespread and often ignored," Garbinsky said, "it might be time to replace silence with sharing."
Sarah Magnus-Sharpe is director of public relations and communications for the Cornell SC Johnson College of Business.
