Breaking the Taboo of Talking About Money with Friends, Family, and Bosses

Mindy:
Welcome to the BiggerPockets Money Podcast, Show Number 169, where we bring Erin Lowry back again to talk about normalizing money discussions with everyone in your life.

Erin:
So, one of the things too, and I really do feel even if you’re paying off debt, put a little bit of money aside for some indulgences. Have a little bit that’s going into whether it’s a fun fund, or a friend fund. And this isn’t big amounts of money. This isn’t going and doing something super extravagant, but that sometimes you can buy in, particularly if your values align with what your friends want to do. Or if it’s just because, “I want to spend time with this person.”
“And I want to be able to go do something that’s not like a walk in the park or game night. I want to be able to do something that’s a little bit more fun than that.”

Mindy:
Hello, hello, hello. My name is Mindy Jensen. And with me as always is my drinking from the fire hose co-host, Scott Trench.

Scott:
We’ll never extinguish your enthusiasm for these interests, Mindy. Thank you.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story, because we truly believe financial freedom is attainable for everyone no matter when or where you’re starting.

Scott:
Whether you want to retire early and travel the world and go on to make big time investments in assets like real estate, start your own business, or simply have a tough money conversation with friends, family or coworkers. We’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Mindy:
Scott, today, we’re talking with Erin Lowry from Broke Millennial. I love Erin because of her practical, no nonsense approach to handling finances. We first spoke to Erin back on episode 24, where she talked about Getting Financially Naked with your Partner. We brought her back again on episode 81 to talk about Investing Basics. And today, we’re talking money once again. But we’re talking about how to bring up the conversation in the first place, with friends, with family and at work.

Scott:
Yeah. I think this is a great conversation about conversations. And the reality is that we don’t talk about money in this country very often. And it results in these little tricky nuances. And those things, I think, are the most prevalent with friends, family, coworkers, significant others, that aren’t as obsessed healthfully with money as you might be, listening here at the BiggerPockets Money podcast. And Mindy and I might be.
We talk about money all the time. But that is not normal elsewhere. And I think that this is a really good intro in how to begin having those conversations and the nuances and differences about having them with friends versus with coworkers or bosses.

Mindy:
Yeah. Erin has really done a lot of research into having the conversation. She gives you a lot of tips, not only in the show, but she has a new book out called Broke Millennial Talks Money. And in the book, there’s a lot of suggested ways to have conversations. Because I really do want to normalize having the conversation about money. It’s very important to have. You just don’t really understand what people are going through and how their life is different from yours if you’re not having conversations about everything.
It shouldn’t be taboo. But it is. So, Erin is going to come in today to talk about why it shouldn’t be taboo and give you tips. Erin Lowry, welcome back again to the BiggerPockets Money podcast. I’m so excited to talk to you today.

Erin:
I’m so excited to be here.

Mindy:
Erin, let’s just jump right into it. Why do we need to be having conversations about money with people in our lives? Talking about money is taboo. Why are you pushing this taboo subjects on everybody?

Erin:
I joke that I’m just out here trying to make everybody uncomfortable. But listen, we can do all the other things right. You can get your financial life together. You can start investing and building wealth. You can construct this beautifully made financial house for yourself.
But if you don’t know how to healthily communicate, set boundaries, advocate for yourself, it’s all going to slowly or all at once come crumbling down around you because you have to be able to communicate about this. And it’s really important that we learn how to talk about money, talk about money effectively, and learn how to set healthy boundaries.

Scott:
Why do you think people don’t talk about money? Why is it taboo or just not done openly?

Erin:
Well, I’m curious, just even within the three of us, who got messaging at some point as a child or even as an adult that it’s inappropriate or rude to talk about money? I mean, I have. Yeah. I mean, it’s really it’s socialization, and what we were told at certain points of our lives. Even though I grew up in a household where we were very comfortable talking about money in a lot of ways, I have memories of asking, “How much do you make?” and being told, “That’s none of your business.”
I remember there being a lot of tension around even filing financial aid forms for college because my dad felt like it was none of their business how much money he made. And that stuff to me is obviously sending messages as well about, is it appropriate? Is it inappropriate to have these conversations?

Mindy:
I remember watching The Breakfast Club, not having any concept of what a good salary was. And this was in like the ’80s. I’m watching The Breakfast Club and the guy’s like, “I make $38,000 a year and I’m not about to have you messed it up,” or something. I’m like, “$38,000 a year, that’s not very much money.” My stupid self did not know. And then, a friend was sitting there. She’s like, “That’s more than my dad makes.”
And I was like, “Oh, you know what, I don’t actually know how much money my dad makes. I just thought that $38,000 sounded not very much.” And then, my first job, I made 24,000. I’m like, “I can live off that.”

Erin:
Yeah, so much of it is relative and our relationships with both money and how much and what is wealth and what is rich will change and evolve over time. But for many of us, it’s a taboo uncomfortable situation for a couple of reasons. One, the socialization aspect. And then two, the risk of judgment. At the end of the day, we are concerned what other people think of us, particularly people that we love and we care about.
We will probably cop to certain things to a complete stranger. I think if you were, pre-pandemic times, on an airplane, having a chat with your seatmate, there’s certain things you might divulge to that person that you’re not going to tell your best friend. Because the risk of judgment, who cares, you’re never going to see that person again most likely. Unless it’s like a rom-com scenario.
And with your best friend, oh-oh, they might judge me for what I just said about how much credit card debt I have, or the fact I have student loans, or the fact that we made a bad real estate choice. That’s really where the concern comes in.

Scott:
How do you like to approach solving this problem? That’s what you’re known for, right, is helping people overcome this tendency to avoid talking about these tough money topics, I think. What’s the solution in your mind? Or how do you begin to approach that?

Erin:
I talk about it a lot. And I hope that that makes it more comfortable for other people. I go through some of the embarrassment upfront so other people maybe you can use me as an example. And I wrote Broke Millennial Talks Money completely with this in mind, and it has a ton of actual scripts with the, here’s how you can initiate or have or engage in these various conversations. And riff on it, make it relatable to you. But there’s a foundational bit. And I wrote it like that because oftentimes, that’s what we need.
We need a template, we need a script, whether it’s negotiating, asking for a prenup, talking about how you want to handle money in a marriage, asking mom and dad if they’re ready to retire, telling your friends you can’t afford X, Y, Z thing that they want to do. It’s so uncomfortable to navigate most of those conversations. So, to be able to look down like, “All right, so I have this script here,” memorize it, don’t come in with index cards. But being able to have a template of how to have the conversation is really helpful.

Mindy:
Let’s dive into who is the easiest person? What’s the easiest conversation to have to start off with this? Because at the back [crosstalk 00:08:05].

Scott:
I want to know what the hardest conversation is. Can you give us the easiest one, and then the hardest one?

Erin:
Oh, man, that’s actually a very hard question. Because I think it’s so relative to the person. The easiest one actually might be mom and dad if mom and dad are totally all set for retirement, and you just bring it up like, “Yeah, we’re good. Here’s all the information that you need to know.” Great, not a problem. That can also be the hardest conversation. Easiest, I personally feel like is a lot of the friend dynamic conversations. It can feel really uncomfortable at first.
But oftentimes, your friends are in pretty similar age demographics, not necessarily the same financial situation. But they’re going to know other people who are in debt, or dealing with some of the struggles that you’re going through when you’re having these conversations. Also, and this sounds very rude, and I apologize, but your family is your family, your friends, you’re not going to have all of these friends for your entire life. Some of these people will be lifelong friends. Some of them won’t.
And that is an interesting point that gets brought up by one of the financial therapists in the book is that not everybody is a lifer in your relationship dynamics. That everyone is going to be there your entire life. So, if you have a vulnerable exchange with someone, and they’re not going to say an expletive, but insert your preferred one here, yeah, maybe this isn’t meant to be a long-term relationship in your life. Now, if you get vulnerable with a romantic partner or a family member, that can feel a bit more amped.

Mindy:
Okay. So, what you just said is really, really, really powerful. And I want to make sure that everybody hears that not everybody in your life right now is going to be in your life forever. And if you don’t have similar financial opinions and outlooks and projections, maybe that is where the relationship starts to deteriorate. And I’m not saying this right, but I want to go to a movie, and it costs $10 for the movie ticket, and then the popcorn and then, then, then, then, and then.
And that’s sometimes doesn’t feel worth it to me. Or I want to go to a concert or a friend wants to go to a concert, and it’s a $50 ticket or $100 ticket. And I don’t want to do that. For a lot of people, it’s really difficult to say, “I can’t afford that, or I choose not to afford that.” And I hear a lot of people going into debt, or spending money that they don’t have. What’s the phrase spending money they don’t have to impress the people they don’t like, on things they don’t want, or whatever, that was also ham-handed?
But how do you say no easily to a friend who wants to do something that you don’t want to do, or you don’t want to be able to afford to do? The friends are easy to talk to but they’re also the hardest ones, because that comes back from like, “Oh, I’m embarrassed that I can’t afford it.” Don’t be embarrassed that you can’t afford it. Don’t go into debt to do dumb things that you don’t really have any interest in doing.

Erin:
There’s many layers to unpack here. So, I also might want to readjust my original answer to talking to your coworkers might be the easiest if you’re not really friends with them, because who cares? So, that’s a whole thing we can get into in a minute. Okay. I also want to clarify, we do, as humans, tend to self-segregate throughout our lives.
And what I mean by that is, oftentimes, people who are in long-term committed relationships or married will look around at a party at some point, realize, “Well, there really aren’t single people here. Or people who have children,” tend to maybe have parent friends and not have that many childfree friends. As we hit different life stages, this stuff tends to happen. And it also happens socioeconomically.
We tend to eventually start to socialize with people who are in a relative socioeconomic bracket to ourselves. Is that right? Not saying it is. Saying that it does tend to happen. And oftentimes, it tends to happen because having these conversations that we’re about to get into is awkward. So, people just avoid it. And then, relationships fizzle out as a byproduct. There should be a diversity of people that you have in your life, including socioeconomically.
And low hanging fruit examples, but if you’re a public school teacher, and your best friend from college becomes an investment banker, you’re in very different situations. You know you’re in different situations. One of you is notoriously underpaid. The other one is notoriously, I’m going to say it, overpaid for the job that you do. This is just common knowledge information.
So, you should also be able to have conversations about like, “Listen, I can’t go to Ibiza to an EDM concert with you on a flip of a hat because you have all this disgusting investment banking money and I’m a teacher.” Obviously using very dramatic examples here. But I say this because being able to also be vulnerable with your friends is something you should be able to do if it’s a healthy relationship that you want to nurture.
So, being able to say, and not in a I-don’t-value-that way. Because that sounds really judgy. So, don’t tell them, “I don’t value what you value.” You don’t want to do it that way. You want to do it in more of a, “Here are the things that are going on in my life.” Give them context. “I don’t know if you’re aware, but I’m actually paying off some credit card debt. The pandemic was really hard. You know I got furloughed for a period of time.”
“I couldn’t survive without using my credit cards a bit. And right now, I’m just trying to figure out how to get back on my feet.” And you don’t have to tell them a number, but just tell them that it exists. “And I’m telling you this because I really want to be able to do these things with you. But it’s just not in my budget right now. So instead, can we,” and then offer an alternative. Give them a counter offer for the thing that they want to do.
Something that’s in your budget, something that’s reasonable. Because saying no but then also providing a counter offer is a way more palatable way to do it than just saying no, no context, no counter. If you keep saying no, eventually, people are going to stop asking. And maybe that is what you want. But if it’s not, if you want to keep fostering this relationship, you need to be a little bit vulnerable.

Mindy:
Oh, that’s a really good point. Because yeah, I do want to spend time with you. I just can’t spend that time with you. I don’t have the money to spend that time with you. There’s a lot of embarrassment though about being in debt and not having all the money. Do you remember the episode of Friends where the three rich ones went out to dinner to celebrate somebody’s birthday-

Scott:
More Friends references, great.

Erin:
And then, went to Hootie & the Blowfish concert.

Scott:
We were on a break, from Friends.

Mindy:
Scott does not know anything about Friends.

Erin:
Hey, that was a pretty good reference, though, if you don’t know anything.

Mindy:
That’s the only one he knows.

Scott:
Yeah. We went into that one at my expense recently on a recent episode. So, yeah.

Mindy:
But that episode really spoke to me because at the time that it came out, I was one of the three poor friends. And I totally identified with going out to dinner with your friends, and it’s the birthday. So of course, you want to pay for your birthday friend, but then they choose this super expensive restaurant. And you spend a lot of money doing something that you really don’t have the money to spend on. Yes, I want to celebrate your birthday.
But I can’t afford a meal like this. I remember going out to dinner and I could afford it. It was weird. We went to a sushi restaurant. I don’t eat raw fish. So, I got the cucumber roll and the shrimp thing. And those are the inexpensive options. I chose them because I’m not putting rough fish in my mouth. That’s a conversation for another day. But my total was, I don’t know, $10 or something, which is whatever, I’m there for the environment.
But everybody else was getting these super expensive rolls and our meal came out to $50 a person. I put it in, but it was weird to put in $50 when my total was $10. It was just really, really strange and navigating that was like, “I don’t know what to do. So, I’ll just throw it in there.” It was uncomfortable. And I don’t know what I should have done differently. Maybe just suck it up.

Erin:
One of my favorite lines from the book is Melanie Lockert, who is the author of Dear Debt and The Mental Health and Wealth podcast, has this really great line for that exact scenario about do you want to feel the embarrassment or the resentment? What would you rather sit in? And I love that point. Because listen, I’ve been there. I have my $80 quesadilla story where I went to a birthday dinner at a very overpriced Mexican restaurant in Manhattan.
And I was straight up broke millennial status, making $24,000 a year that first year. And I didn’t have much and I vetted the menu beforehand. I’m like, “I can order the quesadilla. And I can throw a little bit in for like tax tip and the birthday girl and have water and get through this situation.” And then, they all start splitting the bill evenly. And they’re like, “It’s $80.” I’m like, “I had a quesadilla. I cannot afford that.” And I love that reframe of embarrassment or resentment.
Now, a couple of things to back it up, before you even get to the bill at the dinner, part of it is setting the healthy boundaries before your foot steps into that restaurant.

Mindy:
Let’s talk about that. Yeah.

Erin:
So, now, just to smash cut to if that hasn’t happened, it’s end of the night, bill is there, then it really does become, do you stand up and say, “I am happy to throw in 10, 15 bucks for the birthday girl and to split tax and tip. But I only ordered a,” insert number here, “Dollar dish. I’m going to be honest with you guys, that’s what I can afford to pay for.” Are you okay standing up and advocating like that for yourself? Can you be vulnerable with the people there?
Or maybe just with the birthday girl and like who cares, you don’t know these other people so it doesn’t really matter situation? Or are you going to suck it up, pay it and then stew five years from now and still be like, “I had an $80 quesadilla.” I ended up standing up for myself that night. But you know what I mean. So, those are your options at endgame. The other thing you can do is prepare going in. You’re going to know the restaurant that gets picked early.
So, look at the menu. If there are no prices on the menu online, yikes, red flag. Look also on Yelp and see how many dollar signs there are. If it doesn’t feel doable for you, then have a frank conversation with the birthday girl or whoever’s planning it and say, either, “This is my budget, I can come but I can only spend this, or say, “Hey, how about I meet you for a drink after? Or how about I meet you for a drink before dinner,” so that you’re not there for the actual splitting of the bill extravaganza?
Or it could be the restaurant hasn’t been decided. And you can say, “It’s your birthday, you should get to pick. I do have to tell you; this is really my budgetary limits. But I’m not imposing those on you. If you want to pick a nice restaurant, that’s fine, we can just do something another time. Or I can cook dinner for you, you can come over. Or we can go celebrate X, Y, Z other way.” So, setting those boundaries early.
But I do really love the, “I’ll meet you for a drink,” before after strategy or like, “I’ll come for dessert,” just so that it really avoids the split the check dance if you’re uncomfortable with the idea of advocating another way.

Mindy:
I love that. Because when you’re paying off debt, that should be your main focus. And I know there’s a lot of people who are listening right now who I mean, everybody has friends who want to go out and celebrate their birthday, maybe not right this moment in the middle of a pandemic, but eventually, we’re going to open up again, and people are going to want to go out. And it can be really difficult. And I had no idea that we were going to split the bill six ways for $50 a person when we went out for this $300 sushi dinner.

Erin:
That you’re still resentful about, which is the key thing here.

Mindy:
I’ve gotten over it. I willingly put in my $50, it was a nice evening, we had a lovely conversation, I could afford it. So, it wasn’t keeping me from paying a bill. But I know that there’s a lot of people who are in the same situation. And just thinking about it ahead of time is really, really smart. And it didn’t even occur to me.

Erin:
And the afford and the value are two really important words here. For really all our money conversations is, well, just because I can afford it, doesn’t mean I want to spend money on it. And that’s fair. You got to be careful how you communicate that because to say, “I don’t value that,” to a friend really comes out condescending as I don’t value this thing that you value.
And what I like about this, too, and it’s another point that gets brought up by a different financial therapist in Broke Millennial Talks Money is this idea of perpetual problems. That was more a bit focused on romantic relationships. But truly, in pretty much any relationship dynamic, you can have a perpetual problem where both parties are right, no one is technically wrong, but you have different opinions that forever clash.
So, a good example is one person wants to get to the airport two hours early. The other person wants to get there 45 minutes early. As long as you make the plane, no one is wrong. But you’re always in a fight about what time you should get to the airport.

Mindy:
45-minute man is wrong.

Erin:
See, I’m team 45 minutes.

Mindy:
Oh, you’re wrong.

Erin:
I got your TSA precheck. I don’t check a bag. What am I doing sitting around the airport? And my husband is more team two hours.

Mindy:
Peach is right. Sorry.

Scott:
Do you guys think birthdays are a particularly good example of where these values begin to collide?

Mindy:
Yes.

Erin:
Oh, yeah. And the holidays-

Scott:
People value their birthdays very differently. I’m like, “Oh, it’s one of those days. It’s going to be Tuesday. I happen to turn 31 or whatever it is. And there you go.” At some other people are like, “No, this is a weekend getaway for three grand.” Yeah.

Mindy:
Yeah. I want somebody to acknowledge it. “Hey, it’s your birthday. Happy birthday.” And that’s it. I don’t want gifts. I don’t want to do anything. Maybe go out to dinner with my family. But that’s it. I don’t want this big extravaganza. I will say this, Erin, I don’t value going away for a weekend long jaunt to celebrate the day you were born. So that I’m not going.
That was always really easy to say no to when friends would invite me to these like, “Let’s go to Las Vegas.” I don’t love Las Vegas. Sorry, Vegas, but I don’t gamble. And if you don’t gamble, there’s not a lot to do, so.

Erin:
As long as you don’t say like, “I don’t value this so I don’t want to go.” Yeah. It’s fine for you in your head be like, “Oh, hell no, this is not something I value.” That’s perfectly acceptable. Just don’t say it on their face. That’s my only point. Because anybody who talks about money, values, values, values, that comes up all the time. The idea of spending in alignment with your values. Now, one thing I will push on as we are in this friends conversation, your friendships and your relationship should be something you value and want to invest in.
And that also needs to be part of this conversation is I have started talking pretty publicly about the fact of big regret of mine financially was how much I fixated on earning and not spending in my early 20s. And really to the detriment of a lot of my relationships then. Because I just said no constantly, I didn’t provide a counter. I just constantly said no. And eventually, people did stop asking. And I know some folks were like grass is greener, or they weren’t good long-term friends. Well, I was the bad friend.
I was flaky, I wasn’t reliable. I didn’t do things. It’s hard to build a friendship if you won’t engage. Now, obviously, there are other ways it didn’t always have to be like, early 20s, New York City, going out, partying. It could have been other options, but I didn’t even offer other options. Because I didn’t know to at the time. So, one of the things too, and I really do feel even if you’re paying off debt, put a little bit of money aside for some indulgences. Have a little bit that’s going into whether it’s a fun fund, or a friend fund.
And this isn’t big amounts of money. This isn’t going and doing something super extravagant, but that sometimes you can buy in, particularly if your values align with what your friends want to do. Or if it’s just because, “I want to spend time with this person and I want to be able to go do something that’s not like a walk in the park or game night. I want to be able to do something that’s a little bit more fun than that.”

Mindy:
Oh, I was going to say you’ve got that big park, Central Park, that’s so much fun to go to. Get a blanket, go and get some nice cheese and a nice bottle of wine and have a conversation with your friend.

Erin:
But even nice cheese and nice wine is expensive.

Mindy:
Right. But that’s where your friends fund comes in. I mean, you can buy a much nicer thing of cheese and wine or have it more frequently if you go to the store and buy it versus if you go to the restaurant and sit down and order it that way.

Erin:
And you can, of course come up with creative ways to do things. And they’re like donation days and free days for things like museums, and you can be really clever about it. But my point is that it’s also important to consider how we invest into relationships. Because long term, that’s a form of building wealth as well. You want to have people in your life as in this is family, this is friends. So, just an important part to consider as well.

Scott:
Yeah. So, just on this topic, for me, my thing was, I like to drink too many beers on the weekends and have run up a little bit of a tab at the bar occasionally, especially in the early 20s. And so, for me, that was important. And so, what I tried to do is reduce my housing and transportation and other food expenses, so that I would have plenty leftover to continue to save, and to invest in those types of things.
And so, I just think that there’s a way to prioritize these things in a way that allows you to get to your priorities, however mature they are at that time. So, there’s ways to, I think, appropriately handle that. But there’s also then like the $3,000 getaway. And sometimes, you got to do that because your friend that is getting married wants to do a bachelor party in Vegas, you got to have a slush fund for that. You’re going to miss out, I think, on a life experience there.
But you also need to be like, “Okay, turning 26 and going to Cancun, okay, I’m going to skip that one. Because that’s just another one of these.” I think there’s a balance and way to think about that. And to your point, if you don’t put the time into your relationships, that’s where you’re going to really fizzle some good friendships, I think. And I’m sure everyone has experienced that in life to some degree. You’re not alone. I’ve certainly done that in the past.
And so, that’s where I think that investment comes in more. And I don’t know, I think that you have a very mature way of approaching those types of conversations while also recognizing that like, hey, it’s a time commitment, not a money commitment that’s needed to preserve great relationships.

Erin:
Yeah, absolutely. Especially, as some of them become long distance friendships, as life changes, particularly if you live in a big city, people tend to move. And if you want to continue to invest in those relationships, it’s also engaging, whether it’s the Zooms or the FaceTime, or the text messaging, and then also having money where you can take trips to go visit your friends as well.

Scott:
Yeah. I got a buddy who we used to hang out all the time in Denver, and he moved away. And we’re like, “Look, we both know each other. If we don’t put a calendar recurring invite on a quarterly call, we’re just not going to connect.” And so, that’s what we do. We just have it on our calendar in recurring basis. Yeah.

Mindy:
You’re such a millennial, Scott.

Scott:
Yeah. I just go for years without text the guy. And he’s a close friend. So, I think it’s a good way to go. I don’t know, there’s lots of ways to handle those.

Mindy:
I have to do that too actually. I’m teasing you about being a millennial. But if it’s not on my calendar, it’s not going to get done. Right now, I’m so busy, I don’t have time to talk to anybody. But if you don’t have time to talk to anybody, then your friendships don’t continue. And you said something-

Scott:
I got a calendar for moms, too.

Mindy:
Oh, I have got to stop this conversation for just a moment and tell an embarrassing story about Scott. Scott just got married recently. I was able to meet his mother and father for breakfast before the wedding. And his mother is a delight. His father’s a delight too. But his mother did a little bit more of the talking than his father did. And she told this story of how Scott in college hired somebody to do menial tasks for him that he didn’t have time to do.
And one of the things that he put on the list for his VA to do was call his mother and say hello and let her know that he is well. So, she picks up the phone. And he’s like, “Hi, this is Scott’s VA. He just wants to call and say hi and let you know he’s doing well.” Look, if my kids ever do that, we’re going to have a whole lot more words that Scott’s mom had with him.

Scott:
I knew that would come back to bite me one day. It’s not quite in this context.

Erin:
Man, that is a great story. I also love the difference in parents where I feel like my dad would lowkey find that really funny and amazing. I think about my mother-in-law, if my husband ever did something like that, she would lose her mind. His family’s very communicative. He’s on the phone with at least one member of his family every single day where my family’s more of the like, I don’t know, I lived 6,000 miles away from my parents when I went to college, FaceTime, Skype and stuff wasn’t really a thing yet.
So, we got used to long stretches of time without more than a little email here and there. So, it’s always interesting to me just the different styles of communicating with family members.

Mindy:
I do think it was very intelligent of college age Scott to hire somebody to do things that he didn’t want to do. But calling your mother is never a thing that you don’t want to do.

Scott:
One of my friends is like, “Hey, you can get somebody to do 20 tests for $100.” And I was like, “Oh, that sounds great. That’s only four cases of natural light. That seems like a good investment.” So, that was where I went with that. I was like, “I have lots of leftover tasks. Let’s try this.” It was not a serious like, “Hey, I’m replacing myself, calling my mom.” It was more of a joke, but still.

Erin:
Man, I’m going to go back on my previous comment about not judging people’s values and just be like, Natty Light, yikes, Scott, yikes.

Mindy:
Yeah, I judge you too.

Scott:
Great ROI.

Erin:
That’s true. You got to give him that.

Scott:
Let’s go on to conversations with your employer about money. So, we’ve talked about friends. And that’s great. And a little bit about mom and dad. But let’s move on to employer relations. What conversations. Those are some of the tough ones, right? Those are ones you build up for weeks or months before approaching your boss, and having frank-ish conversations there.

Erin:
It is. So, one of the big questions I feel like always gets asked is when do I ask for a raise? Or how do I ask for a raise? So, two different conversations. The first, about the when, I was actually pretty surprised when interviewing negotiating experts. First of all, it should be noted, I’ve been self-employed for quite a long time at this point. So, I’ve forgotten some of the traditional employment negotiation scenarios.
However, also, mind you, a lot of these tactics are important for self-employed people. And we can get into that as well. But when it comes to being traditionally employed and asking for a raise, oftentimes, it happens people think to ask when they’re having their annual review, or that time where you feel raises and promotions are being handed out. If you wait until you’re in the room for an annual review, it is probably too late to ask for a raise or a promotion. Because decisions and budgets have already been made and set.
So instead, what you need to do is figure out when does that annual review normally happen. And if you don’t know, maybe you’re new at the company, ask. Ask a manager, ask a coworker, just ask somebody. About three to four months prior is when you want to set a meeting with your manager to have a conversation where you ask for constructive criticism and also tell them what you want. “I’m interested in getting a promotion to,” insert title here, “I want to have a conversation about what it’s going to take for me to get there.”
So that they can give you feedback. And then, you can go and act upon it and demonstrate in addition to all the good work you’ve been doing why you have deserved that promotion and, or raise.

Mindy:
Am I sending my supervisor an email saying, “Hey, next week, I want to have this conversation,” so they have time to prepare? Or am I just sitting down and dropping it on him?

Erin:
It’s not really a dropping it if it’s a couple of months in advance. And also, well, first of all, they probably know. Let’s be honest, most of the time, you get the sense. But you could set it as a, “I really would like to sit down and have a conversation about my next steps with the company.” That’s pretty good coded language for what you’re interested in. Or it could just be maybe the two of you meet every other week.
And this is a standing meeting that you have anyway and bringing it up in one of those meetings. I think the other important thing to note when it comes to work is also the difference between a mentor and a sponsor. And that is a distinction that I’d actually never heard of until going to a conference about a year and a half ago, where the mentor isn’t necessarily the person in your office that you go to for help. That’s really what we would now conceive of as a sponsor.
Somebody who’s going to advocate for you, somebody you’ve built a bond with, but not necessarily the person that you’re going to turn to if you’re having an emotional day and just need some guidance and help about how to figure out the dynamics of corporate life or what have you. A sponsor doesn’t necessarily look like you, doesn’t necessarily have the same lived experience with you. But is somebody who can advocate for you and vouch for you in your actual office.
But a mentor might not work in your office but perhaps is somebody who is more aligned with your lived experience. So, they can help give you advice and guide you through what you’re going through, particularly for women and people of color, being able to have conversations with somebody who has had more similar experiences to our own in our type of work environment can be a really important powerful part of your career growth as well.

Mindy:
Who needs a mentor? Who needs a sponsor?

Erin:
Everyone. Everyone needs a mentor, I think. Without a doubt, everyone needs somebody that you can turn to that’s a bit further along, maybe quite a bit further along than you in their career, who is willing to help engage in tough conversations. Someone you can turn to if you just need, and for some folks, that could even be more of a parent figure in some cases. But someone that you can turn to and talk to and be vulnerable with.
A sponsor, especially if you work in a traditional work situation, is quite important. Especially if you have aspirations to rise to a certain part, a point in the corporate ladder system. You really do I need somebody who’s advocating for you in those rooms.

Scott:
I think approaching this conversation, let’s say I make $50,000 a year, and I want to get a raise to $55,000 a year, how do I arm myself with good information out there. Because what’s publicly available is different than what my employer is looking at, and all that stuff. And I feel like that’s critical to go in there and not be like, “Okay, Joe, Jane and Sally are all making 51 and I’m making 50.” That would be powerful information to have going into that negotiation.
If I’m asking for 55 and they all make 51, I then also need that information just to show separation if I’m trying to go for a different number there. So, what’s your thoughts on that in terms of information going into these discussions?

Erin:
Hey, ask your coworkers how much they make. And I don’t say it flippantly. I know it can be very stressful. And for some people, it feels unsafe. So, that’s the first part. If you’re in a work environment, where you’re pretty positive you could get fired for asking people how much they make, don’t ask the people in your office. I do want to point out-

Scott:
That should be illegal, right?

Erin:
Well, that’s the way now. In most cases, it is illegal to fire someone for asking coworkers their salary. However, they can manufacturer another reason to get rid of you. So, that’s the thing to consider. They can’t “fire” you for that. But they can come up with another reason to fire you if they want you out. So, if it doesn’t feel safe to ask at work, go to LinkedIn, go to similar platforms like that, and just cold pitch people.
Because as you mentioned, there are data aggregators, like your glassdoor.coms and your salary.coms and all of those sites. But the problem is, you don’t know exactly how good that data is. And not a knock on those companies, you just don’t know how close it is in alignment to your unique situation. So, it’s much better to ask people who, and you make sure you control for factors like same or very similar city or town, very similar sized company, same job title, or maybe a job title above you if you’re looking for a raise or a promotion.
And you can ask them pretty simply, “Hi, I’m trying to get a raise and, or promotion. And I think you have some information that might be helpful for me. Could you tell me your ballpark salary?” And you can follow up with, “I’m happy to follow up and tell you what happens,” people get curious, all of that stuff. Or if they’re not comfortable, you can say, “Could you tell me if you make over or under,” insert amount here. “Do you make over under $55,000?”
Starting to get that information. And advise that you usually try to get like at least three men, at least three women, especially if you are a woman if you think there’s any gender wage gap, or if you’re a person of color, making sure that you’re asking both white people and people of color to control for racial wage gap potential. So, trying to get all of this information, so you can go in very informed to your own negotiations and, or job interviews.

Scott:
Okay, great. I think that’s awesome if you’re in a company with 20,000 employees, and there’s 50 financial analyst ones of diverse backgrounds, and all those kinds of things. Now, I can collect really good information and get really honed in on that. What about in a smaller company where there’s less of that? How do I think about that?

Erin:
Well, that’s when you for sure need to go and be pitching people digitally. So, going to LinkedIn, searching for people who fill your criteria and just sending them a cold email. And you might have to send 50 to get four responses, but doing what you can. It was interesting, one of the women I interviewed for a Broke Millennial Talks Money actually did the LinkedIn pitch. When she was going in for job negotiations and trying to switch careers, she started just cold pitching people on LinkedIn.
Not a ton, but enough people usually get back to you to get the information. You can always customize it too, if you feel, in her case, there seemed to be a bit of a gender wage gap situation happening. So, she actually shared that information with certain people. “Hey, I think I actually might be getting underpaid compared to some of the men in my office. It would be really helpful for me if you could share your ballpark salary. So, I can see if that actually is the situation.”
Information like that if you’re close to people at work, and again, it feels safe to talk to them, asking for ballpark. I also want to point out for freelancers and self-employed and solo entrepreneurs, these are super important conversations for us. There is no aggregator of data about this stuff. There is no glassdoor.com for us to go to. You have got to talk to each other. I copy pasted an actual email with a couple of tweaks to remove company names that a woman sent me that asked, she did a great job of asking me, “Hey, we’re both writing for this company.”
“I just renegotiated but I feel like I’m maybe still getting underpaid. Could you tell me, do you make over, under a certain amount?” And then, she also added, “Do you get paid more for sharing on social media or all these other options that could happen?” I also share about how I one time found out I was getting paid $7,000 less than somebody with the same criteria because I didn’t really even know what the market would bear.
So, I asked for $3,000. But that was a good amount of money. And her agent that she was working with asked for 10. And she got 10, I got three for the exact same amount of work.

Scott:
So that’s interesting, though, and I see both sides of this, right, being an employer and all that. And so, sometimes, folks will come in and be like, “Oh, I want this amount of money for this work, because this is what people are paid over here.” But from the employer’s seat, you got to watch out because it’s like, “Oh, you want that amount of money. And that’s what you’re demanding. But I could go and get that work product over here for much less as well.” So, how do you temper that and understand those types of things? Is that like-

Erin:
I wouldn’t go in guns blazing of so and so’s getting paid this, therefore I deserve this. That usually doesn’t tend to end well for you. It needs to be you have demonstrated why you earn X amount of money. And having more of that conversation. The only time it can make sense to bring up directly what somebody else is getting paid is if there is some wage gap discrepancy. Or if you think there just might be a straight up error.
It just feels like this doesn’t make sense. Don’t go in accusatory. “I was having a conversation with,” and you don’t have to name names if you don’t want. “But I was having a conversation with somebody who does have my title. And they are getting paid 10 grand more than I am. And I was just curious why that would be the case.” And don’t get defensive, don’t get accusatory, maybe they deal with harder clients.
Maybe they have a certain specialization skillset that you didn’t realize they had that they’re using, that they’re getting compensated more. There are reasons. Also, you might need to leave and go to another company. That’s the other part of this conversation is if your particular company either isn’t willing to or doesn’t value, or isn’t going to give you the raise or promotion you want, you might need a job hop.

Scott:
Yeah, I also think it’s tricky with smaller businesses. Because people will have titles that do not correspond to other titles in the market. And so, that’s happened in the past where someone’s like, “Oh, my title is this, and this is what that person makes.” And it’s like, “Yes, your title is that. That does not mean that your title matches the skillset that is going on over here.” And so, it can be very dangerous, I think, to go in unarmed with all the information and do a halfhearted job in collecting these facts and really comparing your skillset and experience to the market.
Because sometimes, in the past people, have come to me with things like this. And I’ve been like, “I’m sorry, the expectations or the self-articulation of my skillset is here. And you’re really here.” And that’s the difference that I think can be really hard for some people in these types of things. And that’s the art of this that is so difficult, I think, in some cases.

Erin:
It’s also where I would bring back up the mentor-sponsor idea. That having people in your life who can check you a little bit gently if necessary. But to have a very frank conversation with you before you get into the room with a boss or manager, somebody who makes those decisions, to have an honest conversation about, “Hey, sure, it might say that you are a director of communications, but you work in a four-person company. Everybody’s a director at this company.”
As opposed to, “Hey, if you were over here working at this 10,000-person company, that would not be your job title. And these are the skillsets you have versus skillsets over here.” I find it a little amusing, I worked for a startup at one point, and the bosses that hired me thought it was really funny to put as my job title Senior Executive Vice President on my hiring paperwork.
Because they had come from banking, where they’re like, the titles are just so bloated and inflated and really are meaningless, that that was the technical job title I had was Senior Executive Vice President. Not something I ever put on a business card, but it was just truly a nod to how oftentimes, these titles can be meaningless.

Mindy:
I think it’s disingenuous to give titles that mean something in the corporate world to people who aren’t performing at that level. I worked in the corporate world forever and a directorship is a big deal. You don’t come in and enter into a company as a director, unless you’re coming from another company where you’ve got 10 or 15 years of experience. So, giving you a title without you having a mentor or a sponsor or somebody to check you is not super helpful.

Scott:
Yeah. And that’s something that BiggerPockets did for example. And I think a lot of small companies do it, because what else are you going to do, you’re going to hire somebody and the third employee, and they’re going to be the financial analysts? No, they gave me the title Director of Operations, right? I was a third employee at BiggerPockets, I was called the Director of Operations, is that really my title? Would I really go out and be a Director of Operations at a Fortune 500 company? No way.
But anyways, I think it’s just a reality that’s going on in that. And of course, it’s bad practice by the small businesses and something that we’ve corrected for and began to work on internally at BiggerPockets. But it’s also, I think, important to the discussion with this, because especially in the smaller companies, which most of America works in, there is not going to be four counterparts for you to compare your salary to.
And you’re going to have a really difficult time of pegging actually what your market value is, is I think the point of what I’m trying to bring up with these types of things. And that’s where Erin’s point of getting a great mentor and collecting that information from peers as much as you can in other companies, I think, is so important to understanding your value. Because if you come in guns blazing with, I want $10,000 more, that might be what other people that do the same work in a different capacity in a slightly different company do.
But your employer might be like, “Honestly, we could hire someone to do your job for $5,000 less,” and your plan could backfire. And that’s what I’m trying to communicate with that.

Mindy:
Yeah. Something I heard Erin say a lot is that asking for a raise isn’t a spur of the moment concept. You need to do research. You need to do work in advance. You need to do a lot of work in advance. You don’t just go in and say, “I demand a raise because I feel like I’m underpaid.” I mean, you can but that’s going to be one of the things that backfires in your face a lot. And another thing she said was, if you have demonstrated that you are worth the raise, and that’s something that I want to point out and focus on for a moment as well.
Because I have friends who have said, “Hey, I’m going to go ask my boss for a raise.” I’m like, “Okay, what are your reasons?” They’re like, “Well, I just want to raise.” Well, I do too. Hey, Scott, I want to raise, give me $100,000 raise. Why? What? I haven’t proven that I’m worthy of it. I did successfully ask for a raise once. I went in. And I said, “This is what I was hired to do. This is what I’m now doing. Here are all the things that I am doing in addition to this. And I believe I deserve a raise of X.”
And they came back after doing some research on their own. They came back and said, “Well, you wanted X, we’re going to give you like X minus two or something.” Okay, hey, I shot high with my X, because I didn’t expect that but I would sure have taken it. And you can’t say, “I want a $5,000 raise,” and they come back and say, “Sure.” And you’re, “Oh wait, I want a $7,000 raise.” Shoot a little bit high, but give them reasons to give you a raise in the first place.

Erin:
Yeah, one of the ideas that I like is having a success folder for yourself. So, it can be in your email, it can be on your desktop, however you want to do it. But to track yourself, to track your metrics, to track those proofs that, hey, I have deserved this. And interestingly, I brought that up with a negotiation expert as something that I’ve always done for myself. So, anytime I got client praise or coworker praise or anything like that, or an assignment exceeded expectations, I would save it.
And the negotiation expert raised the point of like, “Your manager, if they’re a good manager, should know already that that is what’s happening.” But it never hurts to have that data aggregated for yourself as a bit of a refresher or if maybe your manager isn’t the greatest manager. Sometimes, people are just bad managers. That is a reality of the situation as well is you might just have a bad manager.
So, making sure that you also know how to quantitatively demonstrate, I deserve this because, and not going in with like, “You should pay me X, I have done A, B, C for this company, yada, yada, yada.” But saying, “I want,” that was a piece of the language that got recommended, not I deserve, not I would like, because I deserve is too strong. I would like is too wishy washy. “I want a $10,000 raise. Here are the reasons that I feel have earned that raise.”

Mindy:
Oh, earned.

Scott:
Yeah. If you’re looking for an off cycle raise or raise outside of the standard of what other folks are getting, your manager may not be the decision maker at the end of the day either. They may need approval from another layer or higher up in order to do that. And so, that’s another point reinforcing your successful idea.

Erin:
Yeah, absolutely.

Scott:
And by the way, giving a raise is not something that like, “Oh, I don’t want to give a raise.” Giving a raise or promotion to somebody is usually the result of significant value-add for the company being achieved. And so, it’s a good thing. It means that value has been created at the end of the day. And so, aligning yourself to that, I think, and getting that documented is really important.

Erin:
And that was an interesting piece too that got brought up is this idea of, for people who feel uncomfortable asking, having that mental reframe of, I bring value to this company for X, Y, Z reason. So, maybe part of the reason you do your success folder is for your own imposter syndrome and your own self-doubt. So, you can remind yourself, this is the value I have brought in moments where maybe you forget. It’s really easy to forget. And it’s also very easy to just hang on to the negatives and the fails, and not necessarily the successes.

Scott:
Absolutely. Man, these are tough conversations, just to go into how it works, and all that stuff, much less thinking about preparing for your own request for a raise or compensation adjustment, so.

Mindy:
What I’m hearing is that you need to be prepared. You need to have your money in your mind. And you need to think through some of the things. If you’re not willing to just spend money at every turn, you need to think through some of these things that will come up. And I love your book, Erin, because at the end, you have 20 pages of conversations topics and conversation starters. It’s not just, “Hey, I can’t afford that, bye.” It’s a lot of different options for a lot of different scenarios, like all the big ones that come up as an adult.

Erin:
Yeah, I would like to think so. They are sprinkled throughout. But yeah, so I did an appendix at the end that got a lot longer than any of us thought. So, that also gives you a sense of just how many scripts are actually in the book. And that was a fascinating part about writing this is that, I thought I had a good sense of all of the topics that needed to get covered in all of the scenarios, but then certain interviews are like, “Oh, yeah, that’s such a good point.”
I remember doing one interview about how to talk about money with your parents. And the woman was going down the rabbit hole of, then if you need to break it to your siblings and how to talk to your siblings. And I was asking her all these questions. And at the end of the interview, she went, “Have you talked to any only children?” I’m like, “No,” right? Because I have a sibling so naturally, you think from your own lived experience.
Yeah, that is a different experience if you are an only child trying to figure out how to care for aging parents compared to having siblings that you might be able to rely on. She’s like, “Yeah, you should interview some only children.” So, that’s in the book too.

Scott:
Well, Erin, this has been really fun. I think these are two pretty like deep topics here with how to discuss money with your friends and your employer, right, to those not airplane type acquaintances that you don’t want to get financially naked with. Speaking of financially naked, if you are interested in hearing more from Erin on the BP Money podcast, we have Episode 24. It’s actually, I think, titled, I think, Getting Financially Naked with your Partner with Erin.
And then, we have an Investing Basics episode in Episode 81. So, go back and listen to those too. And we talked about a lot of other topics here and really go deeply into the how to bring up finances with your spouse or romantic partner, which can be another challenge. I think you cover in a lot of depth in your new book as well, so.

Erin:
I do. It’s four main topics. So, we’ve touched two of the big four. So, it was work family, friends, and then talking with your romantic partner. So, I know we have dug deep into my favorite prenuptial agreement conversation in previous episodes that people should definitely go check out regardless of your opinion on a prenup. I challenge you to go listen to that one.

Scott:
Yeah. And I just want to share one quote that I think sums up a big part of how you have to approach that conversation with your spouse at some point. Because as Erin says, if you don’t put together a prenup, that does not mean you don’t have a prenup. I’m butchering your quote, but your prenup is the laws of the state that you are getting married in, or that you get eventually divorced in if that ever comes to pass. And so, you already have a prenup. It’s those laws.
It’s do you want those laws to govern your money situation and that of your spouse? Or do you want to create your own rules and get alignment on those? And so, go back and listen to that episode. I think it was Episode 24 if you’re interested in more of that. It’s a really important topic that we didn’t unfortunately get time to go today with. But we did have a nice hour with you about a year ago, maybe two years ago. Wow. Time flies.

Mindy:
Maybe three years ago, that was a lot of time ago.

Scott:
Three years ago, oh, geez.

Erin:
Cadence of the book drops is what’s happening.

Scott:
Yeah.

Mindy:
Erin, you just have such great information. Thank you so much for sharing with us today. The book is called a Broke Millennial Talks Money: Scripts, Stories, and Advice to Navigate Awkward Financial Conversations. Hey, Erin, where can I buy this book?

Erin:
You can buy it wherever books are sold. Although, I really highly advocate for you to please buy from local booksellers. And hey, if you don’t have an extra 15, 16 bucks to spend on a book right now, you got some other goals, maybe it’s not a current value as we got into earlier, check out your library. And if your library doesn’t have it, please request it.

Mindy:
Erin, where can people find more about you?

Erin:
You can find me on Instagram, @brokemillennialblog, on twitter, @brokemillennial, and of course brokemillennial.com.

Mindy:
Awesome. Erin, thank you again. It’s always lovely to talk to you. And we will talk to you soon.

Erin:
Thanks for having me back.

Mindy:
Okay, Scott, that was Erin Lowry from Broke Millennial, what did you think of the show?

Scott:
I always enjoy our conversations with Erin. She’s super sharp, really gets it, and really gets the practical challenges of actually getting into the nitty-gritty with money, especially when it comes to money and relationships. So, always enjoy your take on that stuff. Yeah, I think it’s just tough when you don’t have these conversations, and they’re not normalized, to aggregate a database or dataset in your head about what is normal, and what should be taking place with other people.
Because your whole database is what you think, given no information whatsoever, that your friends and coworkers are doing with their money. Because it’s not discussed. And so, I think that opening up the discussion is critical to changing that culture here in America.

Mindy:
And one of the big themes that I took away from today’s episode was, you have to think about this in advance. You shouldn’t be making spur of the moment money decisions, or spur of the moment money conversations. You should be thinking about, “Hey, these items are probably going to come up in my life. How would I ideally want to handle it? And let me think about ways to frame this so that when I am caught off guard, I’m not really caught off guard. I have a plan to have this conversation in advance.”

Scott:
Absolutely.

Mindy:
What is your saying, prior-

Scott:
Proper prior preparation prevents piss poor performance.

Mindy:
Yes.

Scott:
Seven Ps of success. From high school football coach.

Mindy:
Okay. So today, we talked about normalizing money conversations. That’s a lot of Ps.

Scott:
That’s right. Yeah. I’m sure I could layer in an eighth P somewhere.

Mindy:
Well, you think about that. And we’ll air that on a future episode.

Scott:
Proper prior preparation protocols prevent… okay, that was getting too far. Just the seven Ps, seven Ps is fine.

Mindy:
Don’t force it, Scott. Today, we talked about normalizing many conversations. But we fully admit that starting these conversations can be difficult. But lucky for you, we have an entire Facebook group with almost 10,000 members who are either having the same conversations or looking to start them.
So, if you would like to join our group so you can share tips, ask questions, or just have a money conversation with fellow money nerds, you can find us at facebook.com/groups/BPMoney. Okay, Scott, this has been lovely. It’s always a delight talking to Erin but it’s time for us to go. Are you ready?

Scott:
Let’s do it.

Mindy:
From Episode 169 of the BiggerPockets Money podcast, he is Scott Trench. And I am Mindy Jensen saying, got to bolt, colt.