Should You Help a Friend Who Is Bad With Money?
As frugality lovers, it’s probably safe to say that we’re all pretty good at saving money (or at least working towards that point.) Due to our collective affinity for saving money, it can be hard to watch our friends and family members slog their way through it (sometimes somewhat unsuccessfully). We all have friends who are terrible with money; friends who roll up in a new car every six months; friends who get the very latest cell phone the day it’s released; and friends who spend their weekends at the mall.
I have a couple of friends just like this who buy, buy, buy nonstop and then complain that they’re always broke, which makes me cringe. What do you say to that? You don’t want to come across as a judgmental, condescending jerk by pointing out their poor spending habits, but you want to help them at the same time.
So should you help a friend who is bad with money? Should you offer advice? Should you give money if asked for it? Helping friends who are bad with money can be awkward, but it can be done if you can put your judgment aside. Here’s how to help a friend who is bad with money.
Don’t Offer Advice Unless Asked
First of all, it’s never a good idea to offer someone financial advice that they didn’t ask for. Unfortunately, this is something I learned the hard way.
Two years ago, I had a friend who constantly complained about being broke. Her husband had a low-paying job and my friend, a new stay-at-home mom, was considering going back to work, but she hated to leave her newborn in day care. Then one day she messaged me excitedly about a new SUV she was going to buy, even though she had a perfectly reliable car that she already loved.
She was going to finance it because the rate her bank was offering was so low it “didn’t make sense not to take it.” I cringed as I urged her not to go into a debt for a new car, reminding her that car payments aren’t worth the price, but she wasn’t looking for my advice. She had gotten the new car bug and there was no talking her out of it.
I hurt my friend’s feelings by trying to counsel her when that’s not what she was looking for, and we haven’t talked since. Losing a friend over unsolicited financial advice was absolutely not worth it, and if I could go back in time, I’d keep my mouth shut.
Do Lend An Ear but Don’t Judge
It’s hard to watch our loved ones battle money problems, especially when their financial woes seem so obvious on the outside, but it’s always easier to fix other people’s problems than to fix our own. At some point, you’ve probably been in their shoes, and sometimes the best thing you can do is empathize with their financial woes and listen to their struggles without casting judgment.
If you’ve been in a similar situation in the past, tell them how you handled your sticky financial situation when you were in a rut and remind them that they will come out the other side and be wiser for having gone through it.
Don’t Lend Money
If a friend does ask you for money, you probably shouldn’t lend it because it’s likely that you won’t get that money back. Although many of us have done so before (myself included), offering money to a friend in the form of a loan during tough times is a great way to lose a friendship.
The conversation will be awkward when you tell them no, but not as awkward as acting as a bank for your friend. If you lose their friendship by saying no, then you didn’t have much of a friendship to begin with.
Find Other Ways to Help
Instead of offering money, come up with other ways to help. There are plenty of ways to help that don’t involve loaning money.
Does your friend need help finding a job? Job searches can be daunting, so be supportive. Help your friend revamp their resume or offer to attend a job fair or networking event with them as a support buddy.
Does your friend need help starting a budget? Teach them how. (I happen to know of a good blog you can reference.) Show them how to use Mint or Personal Capital to track their spending.
Be the Best Example
Before you try to help someone else, first become an expert in your own finances. Be so good at managing your own money that friends do start coming to you for financial advice. After all, you can’t help anyone else until you’ve helped yourself first.
Luckily, you don’t have to give money or unsolicited advice to a friend to help them with their financial woes. Sometimes simply offering your support, giving encouragement, teaching someone how to budget or leading by example can be enough.
Have you ever lost a friend by offering advice they didn’t want? Have you ever loaned a friend money? (I would love to know how that ended!) What are some other ways you can think of to help someone who is bad with money?