All your loved ones will undoubtedly have flaws that you have come to accept. However, when it comes to shortcomings in financial behaviors, there is little room for acceptance.
When friends and family are bad with money, it can affect not only themselves but also those around them. Problems can spiral into something uglier as more people are drawn in to help square debts and cover costs. If these problems are left unchecked, these issues can be warped into seriously dangerous territory.
Therefore, it is crucial to help your friend break free of any poor financial habits while there is still time. If you want to support them through this period of being their own worst financial enemy, you may benefit from the following tips.
Assume They Have No Experience
There are no gentle ways to say it; it takes a special kind of idiot to be utterly irresponsible with one’s finances. Do not admit this to your loved one but use that outlook to inform your approach in bringing them up to speed with money management.
Even people who are relatively shoddy with their spending habits have some budgetary plan to cover utility bills and grocery shopping. If your friend or family member is genuinely financially reckless to an alarming degree, then it might be best to start from scratch in your teachings.
Sit them down and strap them in for a finance 101 lesson. You can teach your friend or family member about budgeting, loan procurement, and any number of other topics. There are also many money management tips that are not commonly discussed, such as investment opportunities and enterprising business plans. It may be worth discussing these options if you’re the person close to you is struggling to make money, too.
Host an Intervention
If they will not listen to you, who will your financially reckless loved one listen to? Well, everyone else, it is to be hoped!
Stage an intervention and gather all parties concerend under one roof. Facilitate a calm and meaningful discussion about the habits of the irresponsible spender and explain the strain that it will inevitably incur.
A reckless spender is not always a mean-spirited spender. Try to be gentle but firm in how you discuss these topics. After all, your reckless spender is likely not proud of how things have turned out, and pushing them further away and berating them may lead to intense feelings of ineptitude and isolation. All good helpers perfect the balance between empathy and action, so tap into that mood.
Try to account for the money personality type of your loved one too. After all, financial problems can arise from spending both too much and too little. Have a plan in place for anything they throw at you during your intervention, and you should hopefully have an answer to everything.
Seek Reliable Guidance
There is no rule that says you need to be the sole problem solver for your financially inept friend or family member. Sooner or later, they will need to take their learning into their own hands and take the reigns of their financial wellbeing.
Companies like Tally have resources that can help your loved ones set long term financial goals for their betterment. Everything from paying off debts to 401ks and IRA contributions is covered in rich detail here. They will also come to understand the importance of emergency funds also. Equipped with this impressive array of insight, the person you are helping can reclaim control over their money and make all the crucial adjustments they need to safeguard their future.
Helping someone else embark on their financial recovery can be challenging, and it may all feel like one big game of catchup while on the clock. However, resources like those from Tally can be an anchor point, an encyclopedia of knowledge that your loved one can keep referring to overtime. Hopefully, this may help you to eventually take a back seat in their progress as they take on more knowledge and responsibility.
Refer to Media Examples
The person you are dealing with is not the first person to experience financial difficulties.
A quick Google search will lead you to many high profile cases of financial ruin. Alcoholics, problem gamblers, spoilt celebrities – some money problems can be a tale as old as time. If your loved one is young or needs a reality check, linking them to articles of other people’s plights can be a sobering experience for them.
Still, do not just focus on the doom and gloom side of things either. Comeback stories are also worthy of mention, where those who initially struggled succeeded in turning their finances around. Trying to scare the person you are trying to help straight may only make them feel worse. Inject some positivity into the proceedings, and the person you are helping may feel less alone and hopeless with their spending.
Get Them in the Right Crowd
It is rare for poor spending habits to materialize as if from nowhere. It could be that the person you are helping has picked up their recklessness from a third party.
There are many influences out there that may be the driving thrust behind your loved one’s financial shortcomings. These could be:
- Irresponsible ‘friends’: Some social groups are toxic to the core. If the person close to you has friends who do not seem to care about much in life, who is to say they will care about a healthy bank account either?
- Online scams: It is almost impossible to navigate the internet these days without some form of advertisement cropping up. However, not all of them are from legitimate businesses and may exploit the desperation of specific individuals.
- Online shopping addictions: Few people can turn down a good discount in an online store. Several discounts across several stores, though, and even those prices will tally up sooner or later.
- Gambling circles: At its core, gambling is harmless. However, it can become an addiction if it is not managed correctly, so it is vital to keep things in check.
Try to identify who or what the culprit might be behind your friend or family member’s spending. Could they be depressed? Is someone else pressuring them to spend their money in a certain way? Investigate these matters as much as you can and get your friend or family member in the right crowd. This could be anything from self-help groups to integrating them into your social circles more.
A financially reckless loved one may latch on to you for support. Depending on how much free time or affinity you have for this individual, their desperation may not always be welcome.
Their problems must not become your problems, or at least to the same extent. Therefore, it may be a good idea to set up some boundaries. Politely explain that you do not wish to be called at specified hours or clarify that you will not be loaning them your own money either. You have every right to draw lines in these situations however you see fit.
Try to be strong in these circumstances. Many people who are beset by financial problems of their own making may play victim cards and look for sympathy. They can also be manipulative and even cruel when requesting money. While they may have been subject to some unfortunate events, you must stay committed to your approach and help only in ways that you feel comfortable.