Can't Keep Up with the Joneses? It Might be Time to Rethink Your Family's Financial System

Jul 14, 2022

How do you feel about your family’s financial life? Family relationships around money can be messy. If your financial life doesn’t look like the Jones’, you’re not alone – most of us grew up in families with some sort of dominant financial philosophy that probably did not match the socially desirable image of the Jones’. 


If you want to experience more financial intimacy in your life, it might be time to rethink how your family runs their money. Today, we’ll go over a family financial system and how it impacts your ability to experience more financial intimacy in your life and marriage.


The Financial Socialization Process

Each family has its own unique way of thinking, feeling, and acting related to money. Much of that comes from the family system, or a shared set of core beliefs, feelings, and communication styles that make up a family. 


Financial socialization is like the water we swim in— it is the process by which we absorb what’s in our environment about how to manage our finances. Our families play an essential role in helping us develop our financial identity and mental health, but they also have their limitations. 


A child who grows up in a household where money is used as a tool for control might struggle with issues around personal boundaries later on in life. For example, some families use money as a reward for good behavior, while others use it as punishment for bad behavior. Some parents give children an allowance while others withhold it until adulthood. 


How Differentiation Works

Psychological differentiation helps you create your own patterns around money while staying connected to family. The concept is simple: As we age, our relationships change, and differentiation allows us to develop close connections while increasing autonomy. We find the gray space between dependence and independence. 


Differentiation can seem like a tall order, but research shows that as people become more differentiated from their families of origin (i.e., psychologically separate from them), they also report being closer to their families and in better communication about money. 


Research consistently finds that psychological differentiation increases psychological well-being and can move us towards financial closeness. In other words, as your differentiation increases, so can feelings of closeness to one’s family members regarding finances.


Consequences of Low Differentiation on Financial Intimacy

Families with low differentiation often lack financial transparency. This can lead to feeling overly financially loyal to mothers and fathers instead of spouses and yourself. When a child is born into a family system that requires or fosters high financial loyalty, they learn at an early age that they will not be free to make their own financial decisions. 


One of two patterns emerges. Adolescents either then start to rebel against the family financial values or become consumed by them, leading to deep financial dependency. 


Living with parents who refuse to share information about spending habits, among many other financial topics often cause children to either lose interest in financial matters as adults or become obsessed with trying to figure out financial matters. As adults, we struggle to develop proper coping mechanisms for stressors related to finances. 


For example, feeling angry when our significant other buys something expensive without consulting us first is understandable. The angry partner with high differentiation would recognize their anger. They would use a healthy coping mechanisms like taking a walk to cool down and getting some perspective. Then they would invite their partner into a conversation about what they can do together to have more financial transparency. 


In comparison a family with low financial transparency and differentiation will handle the same situation differently: For example If a mother purchased new furniture without talking to her husband first  he might yell at her in front of their children (if he was present) and tell her how irresponsible she was being with their money.The husband would likely fail to see that he can be controlling with the money, which makes it hard for his wife to talk about her purchasing desires. 


At one layer deeper they would both likely fail to realize they have financial fears and anxieties that come from their own childhoods that are shaping the way they now approach sharing and coordinating their financial lives together. 


Sadly this father's and mother’s reaction then perpetuates the message to the children that money is “stressful” and money differences can not be resolved. Before you think I am blaming the parents, I want to acknowledge that few couples have had any formal training or modeling on navigating financial differences within an intimate relationship. So how could we expect something different? 


Getting Started on a New Direction

Learning effective communication skills and healing psychological wounds are significant steps towards differentiation. Without these steps, your family system will likely still show signs of enmeshment and avoidance because we learn both our behaviors and patterns of relating throughout childhood.


If you come from a family system characterized by enmeshment (so close it was suffocating) or avoidance (you wondered if anyone had your back), you may suffer in ways you don’t yet recognize. Many therapists focus on helping their clients develop greater levels of differentiation through modeling effective communication skills and exploring their clients personal wounds—and for good reason: This leads to increased differentiation and mental well-being. 


In short, a therapist works as a more highly differentiated person that can help your mind and brain start to recognize what is like to experience healthy autonomy and interdependence. These new relational experiences then get translated back into your intimate relationships. 


Tips for Starting the Conversation

If you’re wondering where to start, try asking your partner these questions.


  1. What would it be like to talk more honestly, openly, and transparent (HOT) about money? 
  2. How would this be similar or different than what we experienced in the families we grew up in? 
  3. What would it be like if we shared our financial goals more openly and connected more deeply around that conversation?


Remember, take small steps; healing and growth are incremental. If talking about money doesn’t feel right to you yet, don’t force it. Take time to build trust and connection first. Starting a new way of relating to your partner and money can sometimes be scary. 


After all, most of us were raised in families where we did not have healthy role modeling about talking honestly, openly, and transparently (HOT) about family finances.  This has made many of us uncomfortable when having discussions about personal finances because it feels like foreign and unfamiliar territory for most of us. 

If you would like to have support having HOT conversations, then it is time for Therapy Informed Financial Planning. Schedule now your free 30-minute discovery call

Wishing You Healthy Love and Money,

Ed Coambs,


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