When it comes to talking about your salary, most people see it as a taboo subject and a big deal.
But should it be?
Could sharing your annual salary with loved ones actually improve relationships and make you happier?
We explore the pros and cons of sharing your financial information in this article, so you can make an informed decision about discussing your earnings with the people closest to you.
Should you tell your parents your salary?
Ultimately, the answer to this question will depend on how close you are to your parents. If you hardly spend any time with them, why would you tell them a personal piece of information such as your salary? On the other hand, if you trust your parents and have a healthy parent and child relationship, they are the best people in your life to talk about money.
Let’s help you make a decision about whether to disclose your salary by looking at the pros and cons of salary discussions with your parents.
Benefits:
Helps address pay gaps
Being open and honest with people about your salary helps others to understand pay discrepancies. The gender pay gap in America has reduced in recent years, but it’s still an issue. Talking about it can help to eliminate unfair practices and bring them to light which in turn will resolve them.
Helps you to budget and save
Budgeting and saving is not a skill that we are born with. It’s something that we need to be taught.
Your parents have been managing their finances for a lot longer than you, making them the ideal people to learn from.
Being open about your salary with parents or people that you trust means that they can help you break down your earnings to budget and save effectively. Without knowing how much money you make they are unable to do this.
Maintain a healthy relationship with money and your parents
Research has shown that a parent’s attitude towards money can significantly affect how their children view money. This can even lead to bad financial habits later in life.
By encouraging your parents to talk openly about money, you can both make better decisions relating to money. In turn, this brings you closer as a family.
Talking about money is good for our mental health
More than 40% of American adults admit that money is negatively impacting their mental health.
You may find money talk uncomfortable, but it’s important. Discussing what you earn is a great way to free yourself of unrealistic expectations and the pressures associated with rising costs of living. It can also equip you with the confidence you need to make wise financial decisions or ask your boss for a pay rise.
Negatives:
Your salary could be shared with other people
Parents love to talk about their children, especially their pride in certain achievements. If you’re a high earner, you may find that your mum or dad has accidentally let slip your monthly pay packet.
This can cause resentment in wider families or even neighborhoods, especially when someone earns a higher salary than you.
Negative reactions
People can react in all sorts of ways when it comes to conversations about money. Some people may be happy or excited while others show signs of being annoyed or jealous. Think carefully about how your parents will react before deciding whether to tell them or not. Also, how would a particular reaction affect your relationship?
A change in perception
Your family and friends may have an assumption about how much you earn. If this is wrong, you could be faced with questions about your financial decisions such as “can you really afford that car?” and “you should ask for a pay raise”.
Financial dependency
If you’re a high earner and your parents are aware of just how much you make each month, you may start to notice that friends and loved ones tell you about their financial needs. These could be a hint for you to offer money to help them pay for something. Also, if your siblings don’t earn much and your parents find out how much you make, you may feel pressure to provide more financial support.
Legally, in most jobs you’re allowed to talk money or ask a coworker about their salary. But there are things to be aware of first.
Talking about earnings has the potential to cause tension between teams and resentment towards senior management.
On the other hand, it can expose discrimination and tackle pay gaps based on age and gender. It’s an offense for a company to have unfair pay practices. These should be reported to the National Labor Relations Board.
Always do your own salary research so you’re equipped with the facts about salary ranges for certain positions before sharing your thoughts in the office. Knowing your own worth in terms of the skills and experience that you have is another way to equip yourself with the information you need to assess your salary. Companies should track their pay rates against the marketplace to ensure fair pay for all employees.
How to start a conversation about salaries
Talking about money with people you trust is important, but sometimes it’s not easy. The tips below will help you get started.
1. Choose an appropriate time to talk
There’s no right or wrong time to bring up the subject of money, but discussing it in public or when your parents are stressed or distracted probably won’t get you the reaction you want. Pick a time when everyone is relaxed such as after a family dinner at home.
2. Ask for advice
A natural way to bring up the subject of salaries with your parents is to ask them for advice. For example, if you have been offered a new job you could ask whether they think the starting salary is fair.
3. Explain your career path
For your parents to fully understand your salary, they need to understand the industry you work in and progression opportunities. Both of these factors determine how much money you take home each money so it’s important to explain it properly. Your parents may have questions about your career decisions. Try to answer them openly and honestly. Breaking your salary down into monthly amounts as well as an annual figure can help give a bigger picture of your finances.
4. Thank your parents for their support
Even if you don’t agree with some of the comments your parents have made about your salary, it’s important to thank them for listening and supporting you. This will ensure that you feel comfortable talking about money again with them in the future.
Here are a few conversation starters that you could use:
· I’ve been thinking about how much I earn and I was wondering if you’d be comfortable talking about it with me and offering some advice?”
· “I’m not sure whether how much I earn reflects my experience and skills. Can I get your thoughts on this?”
· “I’ve had a job offer for more money but I’m not sure it’s enough. Can we talk through the offer?”
Should you offer your parents a percentage of your salary?
If you still live at home and are earning a regular salary, you should definitely be contributing to bills, food and the general cost of living. But how much should you be giving them?
To decide on a contribution that is fair for everyone, talking openly about your finances is the first step. Then you can sit down together and create a family budget to cover monthly expenses. Families can either offer a percentage of their earnings, which means you will pay more if you receive a pay rise. Or split monthly expenditure equally between each working family member. Whichever way you choose, it needs to work for everyone involved to avoid financial disagreements.
Is it ok for your parents to ask you for money?
Most people will want to help their parents out financially as they get older. After all, they provided shelter, food and clothes for you during your childhood years. But it’s just as important to set clear boundaries about money as it is to talk about it.
An unhealthy reliance on hand-outs from your paycheck can lead to a breakdown in your relationship. Consider the following factors before getting your wallet out.
· Can you actually afford to lend money?
· Is the need urgent? For example is it needed due to a job loss or illness, or just because your parents have overspent that month?
· Can you help in any other way? You might be able to buy some groceries on their behalf to reduce their monthly expenses.
Discussing your salary with parents – the conclusion
So, should you tell your parents about your salary?
Ultimately it’s up to you. Sharing this piece of information could help you meet your financial goals and maintain a close relationship with your loved ones, particularly when you’re just starting your working life or progressing your career.
Hopefully, this article has provided you with the context you need to make the right decision for you.
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