Over the years my opinion on helping friends and family by dishing out financial advice has completely changed.
After I straightened out my money situation and felt firsthand how my stress melted away and my confidence grew, I couldn’t help but want to share my newfound knowledge with everyone. The problem seemed to be that despite my efforts nobody wanted to listen.
Giving family financial advice is one area that can backfire. Here’s what to do instead.
Do NOT Judge
One of the worst ways to go about helping someone is to negatively judge them. This is will only make that person defensive and have even less of a desire to take your advice.
Accept the fact that you have no control over this person’s actions and judging them will only put a strain on your relationship.
At the end of the day it can be hard to know someone is setting themselves up for financial ruin. But there’s also more to life than money. If you want to keep your relationship you need to push your judgements aside.
Only Give Advice if You’re Asked for It
There have been many times over the past few years where I didn’t bite my tongue when a family member was complaining about all of their debt payments and paycheck to paycheck living. I would chime in with a list of suggestions that went in one ear and out the other.
It can, at times, be hard to bite your tongue – especially if you hear someone bragging about their six year car loan or maxed out credit cards. But if you aren’t asked for advice don’t give it.
Nobody is going to change until they’re really ready to do it and you’re unsolicited advice can come off harshly. Nobody wants to feel belittled. (And you probably don’t want someone you care about to feel belittled by you.)
If you are asked for financial advice give it from a place of love and try to put yourself in the other person’s position. Encourage rather than shame. And be open about the changes you’ve made and struggles you’ve gone through.
People prefer to take advice from people who’ve been in a similar situation. If approach your advice-giving in a way that makes you seem superior you’ll diminish your efforts.
Lead by Example
What’s likely is that mostly of your family members will never directly ask you for advice. This is especially true for older relatives that had a part in raising you. (Would you want to take financial advice from your child?)
Even though you may not be asked for advice you can make a profound effect leading by example.
If others can see that you’re happy, financially stable and less stressed they’ll be drawn to that. Keep on making good decisions regardless of what others do or say.
Don’t Lend Money
Lending money to family member who is in a bad situation seems like a noble thing to do, right? But it can be a HUGE mistake. (See why here.)
If a family member is in desperate need of money but doesn’t have a track record of financial responsibility think twice before handing the money over. Give the money if you can and think that’s appropriate. Otherwise don’t lend money.
Accept the Fact that You Can’t Do Anything About It
At the end of the day, if you want to keep your relationships in tact you’ve got to realize that there’s nothing you can do to improve someone else’s financial situation. Everyone has to make their own choices and you cannot force change in someone else’s life.
Accept that there’s more to life than money. Continue making the positive improvements to your life but don’t automatically assume that other people want to do the same.
How do you handle giving financial advice to family members?