Formalizing money matters within a family can sometimes be important to keep the system running smoothly, avert crisis, follow plans, and avoid confusions. There are different situations in which it would be recommended to have family meetings about money.
Averting Crisis. If there is a financial problem that has been growing beyond controllable limits such as high utility bills, high expenditures on other things, or inability to pay necessary commitments like rent or mortgage payments, then having a family meeting about money is essential.
In the meeting, you need to make sure that the entire family is made aware of the exact nature of the problem and a suggested solution. Everyone can be asked to suggest a solution too and point out where they can contribute towards it. All family members who earn money or spend independently (children, wife, etc.) should attend this meeting, and the frequency of its occurrence should be every two weeks or monthly depending on the seriousness of the issue.
Discussing Change. Another situation to have a one-of-a-kind family meeting about money is when the family is going through a significant change in terms of the financial situation. This might be because of a change of jobs, a significant event in the family business, or the start of a major expenditure like repairing the house, start of college, or large healthcare bills.
This meeting needs to happen once (ideally) to keep the entire family informed of the financial implications of this shift and individual responsibilities. The timing should be a bit ahead of the event (unless it is unforeseen of course) to make sure everyone’s mind is made up to, for example, cut on extra expenses to accommodate the repairing bill for the house.
Following financial plans/budgets. A more regular type of meeting a family should have is when they are trying to put into affect financial plans. These might be monthly budgets with specific expenditure and income targets, savings or reduction/increase in some item.
These meetings should happen more regularly, but the ideal frequency is on a monthly basis since that is a good time to re-assess the situation and analyze the real values against the planned ones. Again, everyone who earns in the family or spends independently should attend this meeting.
An important thing about family meetings about money is that they should include an open discussion on solutions and problems because unless everyone fully understands and appreciates the overall issue and the individual part they need to play. An open and honest dialogue can teach your children and get them involved in the healing or helping process. Like my boss always says, “Bad news does not get better with age”. And, likewise, how can you accomplish your financial dreams as a family if everyone is not on the same page?
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