Personal Finance
Many Americans would rather talk politics than money. It could cost you
Voters cast their ballots on the second day of early voting in the 2024 presidential election at the Board of Elections Loop Super Site in Chicago, Illinois, on October 4, 2024.
Kamil Krzaczynski | AFP | Getty Images
There are few topics Americans would rather not talk about more than money.
They would even rather reveal who they’re voting for in the November presidential election than talk about their finances, according to new research from U.S. Bank based on a survey of 3,500 individuals.
That’s on top of separate research that found personal finances are almost as difficult to talk about as sex, a recent Wells Fargo national survey including 3,403 adults found.
Most people are reluctant to talk about money, according to Wells Fargo’s research, and revealing how much they have saved or how much they have earned are two topics they’d prefer to avoid.
Still, for most people to be willing to talk about the U.S. election over their personal finances is a “big surprise,” said Scott Ford, president of wealth management at U.S. Bank.
People are likely more hesitant to talk about money because it is wrapped up with their anxieties, worries and aspirations, said Preston Cherry, a certified financial planner, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin.
Moreover, while money is a “deeply personal,” everyday relationship, presidential elections are just once every four years, said Cherry, who is also a member of the CNBC FA Council.
Despite their reluctance, the research from U.S. Bank shows families are increasingly breaking the ice on financial topics, particularly with regard to conversations parents are having with their kids.
“The good news is people are talking more [about money], but it’s still at the surface,” Ford said.
U.S. Bank’s survey included 1,000 respondents from the general population, 1,000 mass affluent respondents with at least $250,000 in investable assets excluding their primary homes and retirement accounts, and 500 high-net-worth individuals with at least $1 million in assets excluding their primary homes and retirement accounts.
‘Missed opportunities’ of not talking about money
For both couples and families, not having those crucial financial conversations can cost them, financial advisors say.
“When you don’t have the knowledge, or you don’t feel like you have the ability to talk to your loved ones and people around you about money, then you also can’t build wealth effectively,” said Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is a member of the CNBC FA Council.
“Avoiding money conversations will lead to misunderstandings, financial misalignment and, overall, just missed opportunities to plan effectively for the future,” said Douglas Boneparth, president and founder of Bone Fide Wealth, a wealth management firm based in New York City. He is also a member of the CNBC FA Council.
Have talks ‘before an emergency situation arises’
On a positive note, some money conversations are happening more regularly, U.S. Bank’s research found.
Today’s parents are almost twice as likely to discuss financial concepts with their children — such as investing in stocks and bonds — than their parents did with them, according to the firm.
Still, 45% of respondents say they are unaware of their parents’ financial situation, U.S. Bank found. Many believe they will have to provide financial help to their parents or in-laws in the future, according to the research.
A lack of family financial discussions can become an issue if aging relatives have a health scare, said Ford, who recalled having to scramble to pay the property taxes for a loved one who fell ill, without even knowing where the checkbook was.
“What I tell everyone is you want to have those conversations before an emergency situation arises,” Ford said.
To start to better understand older family members’ financial situations, it may help to begin with everyday items, like the cost of prescription medications, and build from there, Ford said.
“Our advice is just to start to have the conversation, start small,” Ford said.
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If those conversations are avoided, it can prevent important estate planning, health-care decisions and intergenerational wealth transfer, according to Boneparth.
“When these things aren’t accounted for, there could be costly legal mistakes or tax inefficiencies, either presently or down the road,” Boneparth said.
Ultimately, families want to have a full emergency plan in place, complete with knowledge of bank account information, long-term health-care plans, a will and a durable power of attorney, which is a legal document that gives someone else the authority to make financial or medical decisions on someone else’s behalf.
It may take some prodding for older family members to open up about their finances, said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta. He is also a member of the CNBC FA Council.
“It’s always best to approach parents and say, ‘Listen, we could care less how much money you have. We just want to make sure the proper things are in place to make sure that we’re not dealing with tons of legal hassles down the road,'” Jenkin said.
Couples often don’t agree on money
A lack of communication among couples can also lead to financial problems.
More than one-third of Americans don’t agree with their partners when it comes to how to best manage their money, both when planning for their current circumstances and retirement, according to U.S. Bank.
At the same time, 30% say they have lied to their partner about money, the firm found. Other research has shown that dishonesty — often referred to as financial infidelity — can be common when couples aren’t on the same page financially.
“Couples sometimes struggle,” Cherry said. “They struggle with sharing each other’s perspective without judgment in order to reach a common goal.”
To work past financial standoffs, it helps for couples to create a more welcoming environment to engage their partners in money conversations, Cherry said.
Financial advisors can often serve as mediators and objective third parties in those conversations, Ford said.
More than half — 53% — of investors surveyed who have at least $250,000 in assets said their financial advisor has helped them work through uncomfortable family money conversations, U.S. Bank found.
Many people may be hesitant to consult a financial professional if they don’t feel they have enough money or know the questions they should ask.
But taking that first step — whether it’s talking to an advisor or doing the research to educate yourself about personal finance — can help shift your mindset and reduce financial stress, according to Sun.
“Most financial advisors, especially the good, experienced ones, will give you a free first initial consultation,” Sun said. “That is super powerful, and you should take us up on it.”
Americans are growing increasingly uneasy about the state of the U.S. economy and their own personal financial situation in the face of stubborn inflation and tariff wars.
To that point, 73% of respondents said they are “financially stressed,” with 66% of that group pointing to the tariff wars as a main source, according to a new CNBC/Survey Monkey online poll.
The survey of 4,200 U.S. adults was conducted April 3 to 7.
Americans feeling financially stressed
CNBC/Survey Monkey polls from 2023, 2024, and this year have found that, on average, more than 70% of Americans said that they are stressed about their personal finances. This year’s survey found that 38% of respondents overall said they are “very stressed,” and 29% of high-earners with incomes of $100,000 or more also shared that sentiment.
Consumers are, of course, increasingly stressed by rising prices for essentials like food, energy, and shelter. This is due to a number of factors, including rising inflation, supply chain disruptions and geopolitical events.
In the new CNBC survey, 86% of Americans cite inflation as the top reason for their financial stress, while 75% pointed to interest rates and 66% cited tariffs.
While inflation peaked at 8% in 2022, a 40-year high, it has since cooled significantly, reaching 2.4% in March. Despite this decline, the increased prices during 2022 have led to a loss of purchasing power for Americans, meaning they can buy less with the same amount of money than before.
It would take nearly $114 today to buy what would have cost $100 in January of 2022, according to the Bureau of Labor Statistics.
And while Inflation has eased, experts do say the fallout from President Trump’s trade war threatens to put upward pressure on prices in the months to come.
Tariffs are generally considered to be inflationary, economists say. This is because tariffs increase the cost of imported goods, which can then be passed on to consumers in the form of higher prices. This can lead to a temporary increase in the overall inflation rate.
“We know that tariffs are inflationary,” said David McWilliams, an economist, podcaster and author. “We know that’s hitting on people’s expectations of how much money they’re going to have in their pocket in a couple of months time.”
So, when it comes to financial stress caused by tariffs, 59% of those surveyed by CNBC oppose President Trump’s tariff policy, with 72% concerned about the impact on their personal financial situation.
As a result, 32% said they have delayed or avoided making retail purchases, and 15% said they have “stocked up.”
What’s more, 34% of those surveyed said they have made changes to their investments due to recent stock market volatility from tariffs.
Handling financial stress
Many investors are concerned about their retirement savings, but financial experts say it’s important for those with a long-term perspective to understand that short-term market volatility is a distraction that’s better off ignored.
“The biggest thing is that it’s unknown, and when we don’t know things, and we can’t control things, that’s when our anxiety and our worry can spike, and it’s contagious,” said licensed therapist and executive coach George James, CNBC Global Financial Wellness Advisory Board member, a licensed therapist and executive coach.
While the market could be in for a bumpy ride over the next few months, experts say it’s best to stay the course and avoid making major portfolio changes based on the latest news.
To manage investments during the latest tariff volatility, for example, financial advisors urge investors to maintain a long-term perspective, review and potentially adjust their asset allocation, and consider diversification to mitigate risk. It’s also smart to bolster emergency funds, review your risk tolerance, and explore opportunities for tax-loss harvesting.
Financial experts also urge investors to focus on their risk appetite — and their goals.
“This is the time to evaluate short-, mid-, and long-term financial needs, concerns, and goals. Evaluation before action or inaction is essential,” said Michael Liersch, head of advice and planning at Wells Fargo, said in an e-mail to CNBC. “Getting specific on exact dollar targets, timelines around these targets, and their level of importance [priority] can create clarity around what should be done, if anything.”
Hinterhaus Productions | Getty Images
As investors digest the latest bond market sell-off, advisors have tips about portfolio allocation amid continued market volatility.
Typically, investors flock to fixed income like U.S. Treasurys when there’s economic turmoil. The opposite happened this week with a sharp sell-off of U.S. government bonds, which dropped bond prices as yields soared. Bond prices and yields move in opposite directions.
Treasury yields then retreated Wednesday afternoon when President Donald Trump temporarily dropped tariffs to 10% for most countries but increased levies on Chinese goods. That duty now stands at 145%.
As of Thursday afternoon, Treasury yields were down slightly.
Still, “there’s a massive amount of uncertainty,” Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania’s Wharton School, told CNBC.
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Experts closely watch the 10-year Treasury yield because it’s tied to borrowing rates for products like mortgages, credit cards and auto loans. The yield climbed above 4.5% overnight on Tuesday as investors offloaded the asset. As of Thursday afternoon, the 10-year Treasury yield was around 4.4%.
Kevin Hassett, director of the U.S. National Economic Council, told CNBC on Thursday that bond market volatility likely added “a little more urgency” to Trump’s tariff decision.
As some investors question their bond allocations, here’s what advisors are telling their clients.
Take the ‘proactive approach’
Despite the latest bond market sell-off, there hasn’t been a recent shift in client portfolios for certified financial planner Lee Baker, owner of Apex Financial Services in Atlanta.
“I’ve been taking a proactive approach” by shifting allocations early based on the threat of future tariffs, said Baker, who is also a member of CNBC’s Financial Advisor Council.
With concerns about future inflation triggered by tariffs, Baker has increased client allocations of Treasury inflation-protected securities, or TIPS, which can provide a hedge against rising prices.
Consider ‘guardrails’
Ivory Johnson, a CFP and founder of Delancey Wealth Management in Washington, D.C., has also been defensive with client portfolios.
“I’ve used instruments to give me guardrails,” such as buffer exchange-traded funds to limit losses while capping upside potential, said Johnson, who is also a member of CNBC’s FA Council.
Buffer ETFs use options contracts to provide a pre-defined range of outcomes over a set period. The funds are tied to an underlying index, such as the S&P 500. These assets typically have higher fees than traditional ETFs.
Take a ‘temperature check’
With future stock market volatility expected, investors should revisit risk tolerance and portfolio allocations, Baker said.
“This is a good time for a temperature check,” he said.
Market turmoil has happened before and will happen again. If you can’t stomach the latest drawdowns — in stocks or bonds — this is a chance to shift to more conservative holdings, Baker said.
“We’re not selling because I’m concerned about the market,” he added. “I’m concerned about comfort level.”
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