Do’s and Don’ts When Dealing With Friends’ or Family Members’ Bad Money Habits

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If you’re here reading this financial blog, you’re likely working towards achieving your financial freedom – or at least are interested in learning how to achieve it. 

One of the hardest things you’ll come across on your financial journey is dealing with other people’s financial beliefs and habits. 

It can be hard to pass up on exciting vacation opportunities or tickets to the big game as you work towards paying off debt or building an emergency savings fund when you see your friends doing the complete opposite. While looking through all of their social media pics, you might wonder how they can afford to do so many extravagant activities when you know they’re drowning in debt.

In talking to these friends or family members about their expensive lifestyles and bad financial habits, you might be tempted to go into full lecture mode and tell them all the things they’re doing wrong and how it will eventually ruin their life someday. While that may all be true, is that really the best way to handle the situation?

How many people actually feel inspired to make huge lifestyle changes after being talked down to and made to feel like everything they value is worthless?

So, the next time you run into that friend or family member who you just don’t agree financially with, here are five ways you should and should not handle the situation.

1. DO set an example.

You may not realize it, but when you talk to your friend or family member about how you’re working towards paying off debt or creating a strong emergency fund, they’re listening. They may not agree with how you’re doing it – foregoing extravagant vacations for staycations near home and packing a lunch instead of going out to eat – but they can see what you’re doing. And they are more than likely jealous that you are making strides in becoming financially secure while their debts keep piling up.

Talk openly about your financial choices when asked, but don’t push your ideals upon your friends or family members. Show by example, not by criticizing.

2. DON’T offer unwanted/unsolicited advice.

As much as it makes you cringe to see your friend or family member plan extravagant vacations or buy front-row season passes when you know they have mounting debts to pay, don’t judge. Telling your friends and family members that they’re making terrible financial decisions won’t gain the desired result. You might ruin your relationship or at least ruin any chance of your friends or family members coming to you for financial advice in the future.

3. DO hold firmly to your convictions.

Budgeting and financial planning aren’t always the most exciting ways to spend your time. When you’re focused on reducing expenses to pay off debt or build your savings account, it can sometimes feel like there’s no room for anything fun. It can often be hard to see your friends or family members making these choices because, in some way, you might be a little jealous of that carefree attitude. It might be tempting to throw away all your financial goals and values for a little fun in the sun with your friends and family.

However, you should remember that you can save money and have some fun. Go ahead and plan a fun reward for when you achieve a certain financial goal. For example, you could buy a new dress when you pay off one of your credit cards. Or you could treat yourself to a football game when you reach a certain amount in your savings account. Having fun rewards along the way to your financial freedom will help motivate you to keep going when it seems too daunting to keep going.

4. DON’T let it ruin your relationship.

It can be hard to be friends with someone who has such different financial values. It can be frustrating to agree upon a fun activity to do together when one wants to go big while the other wants to stay close to home. However, don’t let your financial differences ruin the relationship you’ve built. Find a way to meet in the middle and do something you can both agree upon. Or just avoid the subject of finances altogether. Talk about other things you both enjoy and build your relationship in other areas like your taste in music or a sport you both love.

5. DO respond with love.

If you try not to judge or show judgement towards your friends or family members while they make financially questionable decisions, they will know where to turn to if they ever decide they need help. If you help your friends or family members feel loved and supported no matter what they choose to do, they will trust your opinion when/if they ask for it. 

Ultimately, it’s up to them to decide what to do with their money. Just as you’re responsible for your own financial decisions, they are responsible for theirs. In most cases, people have to hit rock bottom before they realize they’re on the wrong path and are willing to make a change for the better. The best thing you can do is to be supportive and love them no matter what.

What did you do when you saw a friend or family member make a bad financial decision? How did you respond? We’d love to know. Share your own experience in the comments below.

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