DR Podcast 299: How to Help Others with Their Financial Struggles

We all know someone in debt or someone who simply makes poor money choices. It could be a friend, a family member, a child, even a co-worker–here’s how to help others with their finances.


Money issues transcend all walks of life. No matter how much you make, no matter your job or family situation, and no matter your age, you can find yourself in trouble financially. Of course, there are ways that you can try to ward off money problems, and even steps you can take to mitigate them when they arrive.

Even still, we all know at least one person who always seems to struggle with money. Maybe they’ve made some bad decisions in the past and simply don’t know how to dig themselves out. Or perhaps they overspend to an extreme, and find themselves blowing every penny they make (or going into debt) no matter how much they make each year. Are there ways that you can help others with their finances, especially if they aren’t exactly interested in your advice?

One of our Dough Roller readers, Jacob, posted recently in the DR Facebook group. He had an excellent question, which warranted its own article (and podcast!). His question was:

“I would like a podcast discussing how to get others involved with their finances. I know several people with consumer debt and no savings, but no matter what I seem to say, they don’t care.”

Helping others financially is a tricky topic, and can be even more difficult to put into practice. Let’s talk about the ways that you can use your knowledge, and even your personal experience, to walk someone else through their own financial struggles… or when to stop trying.

It Hurts to See Others Hurt

If there’s one thing I’ve learned through my own personal finance issues over the years its that it really hurts to see someone else struggle. Maybe you’re watching a loved one make dumb decision after dumb decision, always wondering how they got where they are. Or perhaps it’s seeing an acquaintance repeat some of the mistakes that you yourself made once upon a time, and you want to save them from the experience.

Offering your advice on other’s money problems, though, is like walking a tightrope.

If you’re not careful, you can destroy relationships. You might do more harm than good with your well-meaning advice. Or you could drive someone to make even worse decisions out of spite.

No matter the case, there are a few things that you need to keep in mind if you want to help someone else with their finances, especially if they don’t exactly want your help to begin with.

Reminder 1: Some People Can’t Be Helped

Having poor financial habits is, in many ways, the same as a substance abuse problem. In fact, for some people, the rush experienced from an exciting gamble or big purchase can rival that felt by an alcoholic or drug addict. It’s almost just as easy to get “hooked” on certain financial actions.

With that in mind, then, you can understand why you can’t help someone financially who doesn’t yet want your help. Just like with an addict, you can offer support and even advice, but you cannot force another person to take your guidance or make chances with their habits. You can lead a horse to water, but you can’t make him drink.

This was probably one of the most difficult lessons for me to learn. I have dealt with a loved one who had a substance abuse problem, and I have also dealt with a loved one who seemed to intentionally sabotage her own financial situation. In both cases, they would end up feeling depressed and helpless about the impact of their actions, but they were the only ones who could change their choices.

The important thing to remember here is that while you cannot change someone’s situation and habits for them, you can guide and support them. You can inform them, let them know that you are there for them when they are ready to accept your help, and you can even offer them resources that they may need.

Down the line–maybe when they come to their own realizations or even hit rock bottom– they could come to you for help. That is when you will be able to make lasting changes in their lives. Until that time comes, though, you are limited to offering advice and support.

Reminder 2: Consider the Relationship

Before you go offering your insight into someone else’s finances or even offering to help them resolve some of their problems, you really need to take into account your relationship with that person, as it can dictate both their response to your help and even how you approach the problem.

If you have an older child who is making poor decisions with their money, it’s much easier to step in and offer (or even try to force) your guidance. After all, as their parent, it’s your job to lead them and give insight into the things they are doing wrong. You may be met with resistance–what parent isn’t?–but you can certainly force the issue a lot further with your own kids.

On the contrary, if you have a friend, coworker, or other acquaintance who is putting themselves in a bad place financially, you’re not in the same position to help. Not only might they be less willing to accept your help, but you also have to stand back if they shut you down. If it’s not someone you are close to, and especially if it’s not someone with whom you have a loving relationship with, you’re much more limited in how far you can force the issue.

No matter who in your life needs financial guidance, you’re likely to be met with some resistance. After all, you are going to be critiquing not only their choices and lifestyle, but also their ability to be responsible with their own money. People have a way of really “getting in their feelings” about money, and may even be embarrassed that you felt the need to intervene.

In this case, it’s important to know when to back down.

Reminder 3: Tread Lightly

Have you ever watched the show Hoarders? Loved ones barge in to their parents’, siblings’, and even friends’ homes–along with a television crew and dumpsters–to save someone from themselves. Of course, many of these homes are unhealthy and hoarding to this extent is a sign that someone needs psychological help. However, I always wonder how much emotional damage is done by forcefully trashing the things that someone else deemed valuable.

Inserting yourself into someone else’s finances can be a similar situation. By forcing yourself upon a fiscally-irresponsible parent or friend, you can cause serious emotional harm. It’s much more impactful to lead them to make their own decisions, rather than making the decisions that you deem best, for them.

Reminder 4: Do No Harm

I hate to keep relating money woes to substance abuse, but the parallels are there. Just like with addictions, for example, it can be very easy to do financial harm to someone in the long-term even when you think you are helping them. And the damage can be lasting.

For example, we all know at least one parent who supports their adult child far beyond the age that is reasonable. Their child may have trouble holding down a job, even well into their 20s, or tends to spend all of their money on “necessities.” When you look closely, though, you see that they receive free rent and board, have a smartphone, and might even drive a nicer car than their parents.

In this case, the “help” that’s being provided is actually causing harm. And it’s creating both habits and expectations that are unsustainable in the long-term. Whether this help is supporting an adult child for too long, loaning money to a friend (who either spends it unwisely or regularly comes back for more), or encouraging a spouse to buy toys rather than save for retirement, the fact remains: enablers do harm.

It’s called tough love for a reason… it’s tough to rip off the bandaid. However, by giving someone the resources they need and then forcing them to manage their own finances, you actually set them up for success. By supporting them time after time, you only succeed in creating a dependency. You don’t allow them to make their own mistakes, learn their own lessons, and implement their own changes for the future.

Sometimes, it takes cutting someone off or kicking them out to prompt action. You truly can help people by not helping them, if that makes sense.

Reminder 5: Wait for Them to Ask for Help

This goes back to reminder 1, that some people can’t be helped. If they don’t want your help or your insight, there is nothing you can do to successfully force it upon them. You truly need to wait for them to ask you for help before you can step in and have an impact.

Remember that talking about money isn’t the same as asking for help. If a friend or family member comes to you with their financial woes, they might just need a sounding board or outlet. Use this opportunity to offer resources, or even your help, but don’t take it upon yourself to jump into the situation.

You can help in a subtle way, being sensitive to what the other person is actually asking for. Being aggressive will only get you shut down and shut out, and can wreck an otherwise-great relationship in the process.

What You Can Do

Luckily, there are some great, impactful things that you can do to help others, especially if you see someone needlessly struggling with their finances. After all, whether you have learned your own money lessons through your parents, your career, or old fashioned trial-and-error, you might be able to spare someone heartache and lost money with your insight.

Here are a few steps you can take to help someone else with their finances in a way that will be well-received and impactful.

Ask Questions

Whether someone comes to you or you simply notice an issue happening, the best way to help is to start the conversation. Use your relationship to ask questions about their situation or maybe a recent/planned purchase.

You could start by asking what something they bought costs, such as that new car in their driveway. You don’t want to pass judgement here; honestly just ask the questions from a place of curiosity. Ask what it costs to insure the vehicle, how much the expected maintenance will be, etc.

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Don’t even offer your insight here! Your only goal is to get them to think about the impact of their own actions on their own in a subtle, passive way. Believe me, when they say the numbers aloud, it will resonate.

Maybe the person in question will talk about a new job. Start the conversation by asking about their 401(k) options. Does their new company match contributions? Well, what does the company invest in? How much are the expense ratios on those funds?

Get people thinking their own questions and lead them to the answers rather than force them. By asking the questions in the first place, you might open doors for them that they didn’t even know existed.

Give Thought-Provoking Examples

When you’re trying to climb out of debt, your extra $100 payment a month seems like a drop in the bucket. If you’re 22-years-old, the idea of saving for retirement (a lifetime away, right?) isn’t very enticing. This makes it really important to offer someone struggling with money a concrete, short-term example of the impact they can have.

This might mean showing a college student how much they’ll have in 10 years if they save $500 (or $100, or $50) a month now. With compounding, you’re talking about almost $100,000 tucked away, before they’re even in their mid-30s.

You might show someone how quickly they could get out of debt by utilizing either the debt snowball or debt avalanche methods, or by throwing an extra $150 at their balance each month. Perhaps you could calculate how much they’d save by transferring a high-interest balance to a 0% APR credit card.

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Giving concrete, short-term examples can make an overwhelming financial situation seem more encouraging, even exciting.

Offer Non-Threatening Resources

People might be uncomfortable or unwilling to accept advice from a friend, or even talking about their financial troubles. By suggesting (or even sending them) a book, you can offer a non-confrontational way to bring these issues to their attention. Even if they don’t read it right away, it can get them thinking about their own situation, on their own time.

By giving them a book that they can read and then implement into their lives, you also empower them. After all, they took the initiative to do something, in their own way.

Some great books for financial newbies (or those questioning their choices) are Your Money or Your Life and Simple Path to Wealth. Both of these are easy to read and insightful, no matter the audience.

You could also recommend some podcasts or blogs for them to visit. This allows them to read about specific topics without committing to an entire book. Some of the best podcasts and blogs also feature stories from different people, offering multiple perspectives and experiences, instead of just the author’s.

One huge bonus to podcasts is that you can listen to them in the car, on the plane, etc. Some people don’t like to read or can’t force themselves to sit down and get through the pages. However, they can listen to a podcast on their commute whilst still absorbing the important facts.

Of course, Dough Roller is a great place to start. You could also recommend that they start listening to Dave Ramsey’s podcast. Either one will let them get an idea of different people’s circumstances and perspectives, as well as hear real-life situations.

Blog-wise, Mr. Money Mustache is excellent. His methods can be a bit extreme for some, but you definitely learn a lot from his posts. Humble Dollar is another great one, as are the personal finance threads on Reddit.

Helping someone else with their finances isn’t easy, especially if they aren’t explicitly asking for your help. There are plenty of things you shouldn’t do, for the sake of the relationship and for the sake of their financial changes. Making the wrong move or forcing yourself/your opinions on them can often do more harm than anything.

Luckily, though, there are many things that you can do to help others who are struggling. By offering them resources, a sounding board, and your assistance (if and when they want it), you can help those you love make better decisions with their money. In turn, you’ll help them reach a better future.

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Topics: Podcast

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