10 Updates

Have A Friend Or Family Member In Money Trouble? Take These 7 Steps

Apr 29 2014, 8:04am CDT | by

Up until a few years ago, I was terrible with money (as I touched upon here ). In my 20s, I loaned someone thousands of dollars on my credit card, and then, while I was carrying a balance for that...

Filed under: news

 
 
 

12 weeks ago

Have A Friend Or Family Member In Money Trouble? Take These 7 Steps

Apr 29 2014, 8:04am CDT | by

Up until a few years ago, I was terrible with money (as I touched upon here ).

In my 20s, I loaned someone thousands of dollars on my credit card, and then, while I was carrying a balance for that person, amassed my own debt.

I eventually had to go into credit counseling which required closing down my cards and committing to a payment plan to get out of the Ponzi-like scheme I had created with my credit card balances.

And who showed me the way out? One of my best college friends.

Looking back, I realize how awkward it must have been for her to suggest I enter credit counseling, so I called her up this week to ask what it was like to watch me (mis)handle my money while knowing better.

“One of the big red flags was you went into credit card debt to loan your friend something like $10,000,” she says. (Actually, I think it was more, though I don’t remember the exact amount.) “The fact that you were loaning money that you didn’t have was a big red flag.”

But she didn’t say anything at that time even though, as she describes it, I was a “train wreck” with money. At one point, I remember she loaned me something like $700, which I then didn’t pay back for at least a year.

Finally, a few years later, when the situation had become completely untenable, she suggested the credit counseling. I asked her why she didn’t say anything until then, a few years after I’d loaned the $10,000+.

“It’s a weird and sensitive thing, but even though we’re really good friends, there’s this strange barrier when it comes to money,” she says. “You always hear, ‘Don’t lend money to really, really good friends,’ and even lending money to your family members can be a potential problem down the line if you expect to get paid back and they don’t pay you back. So, there’s this taboo.”

My friend is right. Jacquette Timmons ,  a financial behaviorist and the author of “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate,” says, “The reason [trying to help your friend with money] is tricky is because — whether directly or by implication — there’s a lot of of judgment and shame attached to it. There can also be a sense of ‘I know more than you.’”

And any time you have more money than a friend or handle it better makes for some awkward money situations, as these stories from people who have more money than their friends demonstrate.

Odds are good that you have a friend in money trouble. According to Nerd Wallet , in December 2012, 47% of American households had credit card debt. As of April 2014, households with credit card debt have a balance of $15,191. And credit card debt isn’t the only kind of financial problem people have. Some people are underwater with their mortgages, some aren’t saving for retirement, some don’t have an emergency cushion, and others have gambling addictions.

“None of us are immune from bumping up against a financial challenge — sometimes of our own own creation other times for reasons we are not prepared for,” says Timmons. “Sometimes you have to rely on friends and family to help you out. I don’t know of someone who hasn’t asked for help at one time. That’s why it’s necessary to be able to broach the conversation about it because you never know when you’ll need to ask or when someone you love and care for will need help.”

Here are seven steps to take when a friend or family member is in financial trouble.

1. Be fairly certain a problem really exists.

Because money is a taboo topic, don’t create an awkward situation by jumping to conclusions too quickly. If you suspect your friend has money problems, gather enough evidence first./>/>

“If there’s just one red flag, then I don’t think you should jump the gun and have a serious conversation about one little something that came up,” says Anthony Saccaro, president of Providence Financial in Woodland Hills, Calif. Then again, he adds that since you probably know roughly what he or she makes and spends, “You kind of know with your friend, what financial position they’re in.” So if you feel like things just aren’t adding up, don’t ignore your intuition.

2. See if they bring it up first.

“You’re having to listen to tip-offs — things that people that say that warn you there could be a problem,” Saccaro says. “If people mention something to the effect that they’re living check to check, or that they’re behind on their mortgage, or that they’re running up credit card debt, or if you’re inviting a friend to the movies and they don’t have the money to go, then I think that is a red flag.”

If they bring up money worries, it could be their way of asking for help. That opens the door for you to say something, says Timmons.

3. Try reaching out yourself.

“I would apply what I call the three-touch-point rule,” says Timmons. “Make overtures to help out either through inquiries or sharing your own story. After the third time, if they’re not listening to you or not expressing any openness to what you have to say, then you just leave it alone.” The third time, you could be more direct, she suggests. You could try saying, “I’ve noticed you do X and I’m really concerned that you’ve been going out a lot and buying this and that, but I also have a good sense of how much you earn and what your overhead is, and I’m concerned you’re putting yourself in a bad situation. Is there anything I can do to help?” And if they say no, just leave it at that, because if you keep pushing, you run the risk of that person shutting down.

4. Start with your own story.

If it seems your friend is ready to talk, then show them that you empathize. “Talk about when you struggled financially yourself,” says Saccaro. “That makes the conversation. Say, ’It wasn’t always like this for me.’”

Timmons suggests you also explain how you turned things around for yourself. You can tell them either your current habits or steps you’ve taken to get to your current situation. “I would share the top three things you do to stay on top of your own money…. Share what you do that keeps you, on a day-to-day, week-to-week, month-to-month basis, in a healthy situation.”

5. Be clear that your intention is to help, not judge, them.

Tone is really important here. “It’s not what you ask so much as how you ask it,” says Saccaro.

“It’s your responsibility if you see a friend doing something not healthy for them, to pull their coattail or tap them on the shoulder and say, ‘Hey,’” says Timmons. “I think the issue becomes less so about whether to do it, and more about the intention behind it — are you doing it to help this person or because you’re coming from a space of, ‘I know it all, and you should be doing it this way’?” (This last scenario is more likely to occur between siblings.)

6. Offer to be their accountability partner.

And offer to help them get on the right path, says Timmons. Set up a goal, schedule check-ins and commit to keeping the other motivated. During your check-in, you could say, ‘You said you would do X and you didn’t do X. What’s going on?’”

7. Determine whether help will be best received from yourself, another friend or family member, or a professional. 

But sometimes you won’t be the best person to offer help. In those situations, consider whether your friend might be more open to receiving help from someone besides you./>/>

Timmons even offers to act as a go-between for her friends with their children. “One of the things I’ve said to my friends with children is, ‘What do you want me to tell your child?’ They may not go to their parents but to their parents’ close friends, so I could pass along what their friends would want them to be told.”

If you decide the best person for your friend to talk with would be a professional, refer him or her to someone you work with. Say, “This is what I do. This is what works for me. I work with a professional, and I know so-and-so,” suggests Timmons. “It would be same as if you referred your doctor to someone or your hair dresser. It should feel that comfortable and organic,” she says.

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Raky ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

New Zealand All Blacks Squad Announcement
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Hus ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern s ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involvin ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Sche ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyw ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Lenovo to take on Google Glass
New York, July 28 (IANS) Lenovo is developing a wearable smart glass similar to Google Glass with an external battery to be worn on the neck.
 
 
New genetic risk factors for Parkinson's discovered
Washington, July 28 (IANS) In what could lead to new treatment for Parkinson's disease, scientists have identified 24 genetic risk factors involved in the disease, including six that had not been previously identified.
 
 
Device to help neuroscientists analyse 'big data'
New York, July 28 (IANS) In the era of unprecedented quantities of information via web, mobile and other internet-based operations, here comes a new device that can help neuroscientists make sense of the "big data".
 
 
Coming, lighter batteries with more life
New York, July 28 (IANS) You may soon be able to have a cell phone with double or triple the battery life as researchers have taken a big step towards accomplishing what battery designers have been trying to do for decades - design a pure lithium anode.
 
 
 

Latest from the Network

Forget injection, pills to cure hardest-to-treat hepatitis C
London/Mumbai, July 28 (IANS) On this World Hepatitis Day, there's good news for patients, particularly from India, for those suffering from hepatitis C. Two new pill-only antiviral drug regimens could provide shorter...
Read more on Business Balla
 
Lenovo to take on Google Glass
New York, July 28 (IANS) Lenovo is developing a wearable smart glass similar to Google Glass with an external battery to be worn on the neck. The device will have a five-megapixel camera, voice recognition and gesture...
Read more on Apple Balla
 
Piper Perabo weds
Piper Perabo has gotten married. The 37-year-old actress tied the knot with director-and-producer Stephen Kay in New York City on Saturday (07.26.14), after getting engaged in September. The 'Covert Affairs' star - who...
Read more on Celebrity Balla
 
Simon Cowell celebrates girlfriend's birthday
Simon Cowell splashed out on jewelry for his girlfriend's birthday. The 'X Factor' star - who has five-month-old son Eric with Lauren Silverman - treated the US socialite to an expensive gift before enjoying some family...
Read more on Celebrity Balla
 
Chatty Ed Sheeran annoys pals
Ed Sheeran has reportedly annoyed his friends by ''spilling secrets''. The 23-year-old singer is incredibly open about his life, and though he hasn't shared anything ''malicious'' about pals including Courteney Cox and...
Read more on Celebrity Balla
 
Stop violence in Saharanpur, says Pakistani daily
Islamabad, July 28 (IANS) The communal violence in Indian town of Saharanpur should be halted at once before it spreads and becomes uncontrollable, a Pakistani daily said in an editorial. The violence was a result of...
Read more on Politics Balla
 
New genetic risk factors for Parkinson's discovered
Washington, July 28 (IANS) In what could lead to new treatment for Parkinson's disease, scientists have identified 24 genetic risk factors involved in the disease, including six that had not been previously identified...
Read more on Apple Balla
 
16 killed in Philippines in Islamist militants' attack
Manila, July 28 (IANS) At least 16 people were killed and 13 injured Monday in an ambush staged by members of the militants group Abu Sayyaf in the Philippines, an official said. The official said the victims were...
Read more on Politics Balla
 
Device to help neuroscientists analyse 'big data'
New York, July 28 (IANS) In the era of unprecedented quantities of information via web, mobile and other internet-based operations, here comes a new device that can help neuroscientists make sense of the "big data"....
Read more on Apple Balla
 
Commonwealth Games medals tally
Glasgow, July 28 (IANS) Australia continue to lead the 20th Commonwealth Games medals tally ahead of England at the beginning of the fifth day here Monday. India's rich haul of medals Sunday helped them leapfrog New...
Read more on Sport Balla