When someone you love is terrible at managing money, you may want to help, but how? The subject of money is fraught with emotion, and if you've made your share of money mistakes you may wonder if it's your place to offer budget help, particularly if they don't seem to want it. Offering the right budget help is a matter of evaluating the relationship, the severity of the problem, and how your friend's money problems affect others.
What Is Your Relationship With This Person?
If it's a casual office friend or someone you occasionally watch football with, an all-out money intervention probably isn't ideal, unless something very serious (like obtaining a loan from a questionable person) is going on. You may have to be content with setting a good example and being supportive.
If it's your roommate, sometimes you have to resist the temptation to help "just this once" unless it's an out-of-nowhere blow like an emergency medical bill. With family it's even trickier, because you want to help, but you have to set boundaries. Here are some tips for helping someone who has money problems but doesn't want budget help.
Lead By Example
When someone regularly sees you living day-to-day without major money worries, it makes an impression, whereas lecturing usually puts people on the defensive. It's not that there's no place for the candid, hard-hitting assessment, but starting out with a speech usually isn't wise. If someone sees that you are happy and fun even though you don't give in to impulse purchases or use your credit card at the drop of a hat, they can learn that possessions don't equal happiness. And if they eventually come to you with money questions, they'll be more receptive since they initiated the dialog.
Offer Budget Help at the Right Moment
Or, more realistically, don't offer budget help at the wrong moment. Financial behaviorist Syble Solomon suggests using the acronym HALT to determine if the moment is right: don't bring up difficult subjects when the person is hungry, angry, lonely, or tired (or when you are). Wait until you're both relaxed, and if the topic of money comes up naturally, you can steer the conversation to budgeting and money management. It can also help if you bring up times that you yourself dealt with money problems. You don't want to come across as a know-it-all.
Try Bringing in a Third Party
Your "third party" could be a helpful or relevant story you read online, a book that helped you learn to budget, or even contact information for a financial planner you trust. With some people, simply opening their eyes to the help that's available is sufficient to put them on a more positive financial track.
If, however, your friend or family member is headed for serious personal disaster, like if they have a gambling problem, you may need to take a more active approach. It will be hard, and it could strain (or potentially end) the relationship, but sometimes you have to lay the facts out there without sugarcoating them to prevent disaster.
Learn to Help Without Giving Money
This can be difficult if you're pressed for time. It's easier to hand someone a twenty from your wallet than to discuss why the paycheck they got two days ago is gone, but it's important to resist unless it's a true emergency.
If you're constantly lending your brother money that he spends unwisely, you have to change your tactics. Rather than giving him $50 for groceries, call him from the store when you're there: "Jane's favorite cereal is on sale two-for-one. Should I pick some up while I'm here?" Suppose your friend doesn't look for a part-time job because she would need a sitter. Offer to watch the kids one morning while she goes around to temp agencies. If they're receptive to creating a budget, this Lifehacker article offers some great practical tips.
Finally, if you offer budget help and the recipient makes the effort and makes progress, recognize it without making a big deal of it and continue to offer support. Help them set up a budget app on their phone when they land that full-time job so they can track spending conveniently.
When they're back on their feet and offer to pay for coffee even though you've always paid, let them enjoy the ability to do that. Go to their kid's birthday party when they've saved up to get them that new bicycle. Be supportive when times are difficult, and be their biggest cheerleader when they overcome problems. That's what being a good friend is about.
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