# Watching friends dig themselves into a hole....



## hystat (Jun 18, 2010)

Anyone else experience this a lot?

I know several couples that just can't get their act together financially.
Otherwise very intelligent people, very logical and competent people. But when it comes to money, they can't seem to manage.

I know one couple about to spend $100K more on a "nicer" home as they struggle to make the mortgage pymnts on the one they are in. They still owe their parents for the first house.
I see a copy of "the wealthy barber" on their bookshelf amidst dozens of "for dummies" books on finance, investing and such...

Another couple succumb to retail therapy continually (they justify it by spending on their kids, not themselves). They also have not repaid a penny of a huge loan to a parent from 12 years ago when they bought a house.
They are off to Florida for 2 weeks to watch their kid become the next dance idol... yeah right.

It is hard to watch. Both couples look at my situation as if I am "lucky" to be in a secure position.

yep, luck... that's what it was 

How do you deal? Is there anything a friend can do? It seems like the most touchy territory any friend can enter...


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## Addy (Mar 12, 2010)

I've seen couples, friends of ours, go bankrupt because of spending like this. They were home owners, moved and never bought again, spend the money they made off the house on frivilous things.... she balks at buying ANYTHING second hand for her children or herself, yet they have only $55K income per year.

Her van which wasn't that old, was a lemon, so on impluse they went out and bought a brand new dodge caravan.

Meanwhile, our family income is double what theirs is (not quite, but close to) and I buy lots of stuff second hand, we have one vehicle on the road (they have two) which we barely drive, and we have managed to pay our home off this year.

It was difficult for me to watch them go into the hole (they had over 80K in consumer debt when they declared), but I wasn't sure what to do. I tried suggesting we go shopping for puzzles at the thrift store.. but no, she wanted to go to Walmart and buy new as anything used grosses her out (she has a germ phobia BIG time!). A few times, more out of excitement over us having paid off our mortgage, I bragged a bit about it, and looking back that wasn't very nice of me considering the situation they were in... but on the other than, it's not my fault so why should I stiffle my excitement?

In the end, she (not so much he) won't talk to me, most likely out of embarrasement of having declared bankruptcy. I think it may be a good thing for them, considering they are forced to go to credit/financial counselling.

On top of all this, I assume she has, or at least had some huge psychological issues because she ended up sleeping around on her husband, a lot..... and he knew about it! Not that this has directly anything to do with their finances, but I wonder indirectly if it was because they argued about money so much. It's sad, very sad. I honestly hope they can learn to budget and stick to it, and their relationship improves and they can someday soon see the satisfaction of having savings vs debt.


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## Max (Apr 4, 2009)

You have to offer financial advice like you would feed a lion. Just lay it out there and walk (or run) away. If they pick it up, you can lay out some more and hope you have made a friend, if not, at least they don't turn on you just for walking around with food while they are hungry.

Other people have strange priorities and who is to say they are wrong. Most of us finance geeks have a strong sense of consequence and as a result, we attach a strongly negative response to actions which will jeopardize our future.

Counter-arguments:
1) I am in the prime of my life, I should enjoy myself now or I will regret it later
2) What if I die young? All the preparations I make for the future will be in vain. I should instead enjoy what I have while I have it.
3) In a market crash like the most recent one, I could have lost everything, and would have been better off spending everything I had to improve my quality of life.

None of the above are truly wrong, just another point of view. We have to live with our choices, and we cannot save those who knowingly sacrifice their future under a similar philosophy as those arguments shown above.

While we can attempt to educate those who unknowingly sacrifice their future, we cannot claim philosophical superiority when doing so. Only to illuminate that another point of view exists (take it or leave it).


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## hystat (Jun 18, 2010)

Max said:


> You have to offer financial advice like you would feed a lion. Just lay it out there and walk (or run) away. If they pick it up, you can lay out some more and hope you have made a friend, if not, at least they don't turn on you just for walking around with food while they are hungry.


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## ShowMeTheMoney (Apr 12, 2009)

Max said:


> You have to offer financial advice like you would feed a lion. Just lay it out there and walk (or run) away. If they pick it up, you can lay out some more and hope you have made a friend, if not, at least they don't turn on you just for walking around with food while they are hungry.
> 
> Other people have strange priorities and who is to say they are wrong. Most of us finance geeks have a strong sense of consequence and as a result, we attach a strongly negative response to actions which will jeopardize our future.
> 
> ...


Well said, I couldn't agree more


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## Ben (Apr 3, 2009)

Nice words Max - I like it.


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## Berubeland (Sep 6, 2009)

Lots of people who know me have learned not to ask me what I think I even give them an opportunity to back out. I always ask them if they are sure. 

I'll tell them but never unless they ask me. Still you can't save your face and your *** at the same time.


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## the-royal-mail (Dec 11, 2009)

The problem with NOT offering at least some basic comments or "advice" to those you care about, is that YOU will be picking up the pieces when their mismanagement ends up in failure. If someone you care about keeps making incorrect decisions, I think it's natural that you will try to offer some advice so they prevent their future pain, kind of like a pre-emptive strike.


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## CrazyDink (May 10, 2010)

I tend to think a serious sit down discussion is warranted. My inclination has always been that friends have a responsibility to look out for their friends, even if society normally tends to call it being nosy.


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## Addy (Mar 12, 2010)

CrazyDink said:


> I tend to think a serious sit down discussion is warranted. My inclination has always been that friends have a responsibility to look out for their friends, even if society normally tends to call it being nosy.


I totally agree with this, my concern is (which was validated in my case) is that you would lose that friendship. I think even with close relatives it's a touchy enough subject that you could cause "family feuds".


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## the-royal-mail (Dec 11, 2009)

Yep. It causes friction in relationships too.

This is one of those things that seems very difficult to change. People either get it or they do not. I sat down with my ex for 2 hours one night showing her a very straightforward excel sheet as the solution to her financial woes. In one ear, out the other. Seems the incompetent people don't like to listen to advice from others on how to manage their finances. But we keep getting the tears and pain which result from their management. About all you can do is offer them the advice and if they don't follow it, then next time they come crying, say that you offered to help last time and they didn't listen and that's about all you can do.

I think part of this problem is societal as well. We don't live in the era of personal responsibility, but of the gov't should pay for everything and perpetually bail people out when they don't listen.


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## dilbert789 (Apr 20, 2010)

Its one thing when they're behavior only effects them, its another when it also effects you!

I see the same behavior with my mother-in-law. She was divorced about 4 years ago and only took $30k cash, he kept the almost paid off $250k house and everything else. She has almost no savings and spends like it's the end of the world. This bugs the crap out of me as its going to be my wife and I helping her financially in the future. 

I've been with my wife now for about 8 years and she's gone from a ton of rotating debt to none. However my MIL takes her shopping and when she gets home she points out 5 items she bought that were 'Stupid & too expensive' that she'll take back. These were all things her MIL said she should buy. One example is receiving blankets, we talked the day before and were going to take a pack of 4 back because we have like 1000 of these things already, she comes home with a new pack of 7 that was $15...


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## Dana (Nov 17, 2009)

This is what is known as a lose-lose situation. If you offer advice without being asked, you will be "preaching" and/or "bragging". If you do nothing you will be 'selfish'. 

Do they confide in you about their financial situation? Or is observation how you are aware of their financial situation?

If they are confiding in you, then you certainly have the right to let them know that they are welcome to ask your opinion and you will give it. If they haven't confided in you directly, then tread carefully. 

Sometimes people don't want help, they just want someone to listen to them complain.

Also, next time they tell you how "lucky" you are to be in your situation - be sure to stand up for yourself and tell them that your "luck" took a lot of planning and sacrifice to make.


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## Underworld (Aug 26, 2009)

Haha great analogy - thats completely what I think.



> You have to offer financial advice like you would feed a lion. Just lay it out there and walk (or run) away. If they pick it up, you can lay out some more and hope you have made a friend, if not, at least they don't turn on you just for walking around with food while they are hungry


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## dagman1 (Mar 3, 2010)

If there is one thing I've come to realize, it's that you can't give advice to those who don't think they need to hear it.

Generally, I find that if you come to someone with advice, unasked, not only will it be ignored, but you will come off as arrogant and a know it all. I have a tendency to do this, so I always have to be careful to not offer unsolicited advice.

The time to give advice is when people ask it of you, because at least they acknowledge there is a problem. This can also be frustrating because they won't follow your advice anyway even when you know it's right. But you just have to give the advice and forget about it, hoping it gets used.


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## Bullseye (Apr 5, 2009)

We have friends who are far wealthier than us, and friends who sound like those described above, buried in debt. All of them know that I am a personal finance 'guy', and an accountant. I don't often bring up money topics, but when I do, it's the wealthy friends who pay attention, and are the ones who ask me lots of questions.


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## FrugalTrader (Oct 13, 2008)

I'm of the same opinion as Dagman, in my personal life, I do not offer personal finance advice unless asked. People generally do not want to hear what they are doing wrong.


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## brad (May 22, 2009)

Dana said:


> Sometimes people don't want help, they just want someone to listen to them complain.


That is so true. I learned it the hard way.


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## Underworld (Aug 26, 2009)

Thinking about this topic of conversation I guess I definitely fall into the category of people that are not afraid to ask questions. If I find a good source of knowledge, I'll try to learn everything I can from that person.

Aside of the whole keeping up with the Joneses I think a lot of people feel embarassed/belittled if they don't know something and react in a defensive manner or just make up an answer.

"Knowledge is the realization that you know nothing" - I like that


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## randomthoughts (May 23, 2010)

I think it's important to realize whether people want sympathy or advice. 99% of the time, it's the former. In these cases, I'll just commiserate on how expensive things are and how hard it is to save money (truthfulness is not an obstacle for me when it comes to making someone feel better).

If someone asks for advice, I'll test the waters by relating general truths: It's easier to control what you spend than what you make. If you can't afford to buy it outright, adding interest charges won't help.

In general, the reaction to this will indicate how receptive the person might be to more specific advice. 

Most of my friends in this situation either don't think they need help or don't want to do things differently. And that's ok, different perspectives.


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## dogcom (May 23, 2009)

My step-son and his girl friend have a spending problem and now he can't even get a credit card, but he does have a good job. 

I wait until they come to me with stories about how they couldn't come up with the money for something before I give advice. I also like to tell stories about how bad I am doing and how hard it is and blah, blah, blah right back at them so they don't try to look at me as some kind of cash cow. 

In my own house I also like to keep the wife thinking that times are tough and we always must be careful how we spend. This is the great thing about people who are not great with money and don't understand it, you can use that lack of knowledge to your advantage and contain them.


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## Addy (Mar 12, 2010)

This is a good tactic and I have used it occasionally... but I think I need to learn to keep my mouth shut because I am a little *too* proud of having come from a very poor family (as did my husband) who squandered what little they did have... into owning a house outright, and having savings, and all on our own with no help from family. I will try and remember dogcom's tactics and try and encorporate them a bit more into my conversations with friends.


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## HaroldCrump (Jun 10, 2009)

I'm on the opposite end in this discussion - I wish my friends would give _me_ free advice (needed or not).
I would like to just sit back and listen how they save, what they invest in, how their investments are doing and so on.
Too bad my friends are just as taciturn as I am when it comes to personal finances.
I wish I had more garrulous friends


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## Shadow_6 (Feb 8, 2010)

My roomate came to me one day with his money worries and how much debt he had. Commented on how it will take him 5 years to pay off his consolidation loan. 
I myself am 6 months away from paying off a consumer proposal. During this time I have learned to save and manage my money. I like to use quicken 2007 and have a budget on it and track my monthly spendings. 
So back to his story, while talking to me about this I happened to be balancing accounts on quicken, so i took the time to show him how i manage my money and budget on quicken, within 30 seconds he stoppped paying attention, i could see my words going in one ear and out the other. I even offered to set him up an account and on quicken and he could start learning to manage, he quickly declined. I even asked him his spending break down for the month, and worked out a rough spending budget on paper for him. I showed him how he could free up about $375 a month just in his alcohol spending. Ya he likes to drink a bit. So after taking my time and trying to help it was all for not. This was a few months back. He has made no progress on his debts and still cries to anyone who will listen about how rough his life is. 
I still offer to set him up a quicken or have him just collect receipts and will do the leg work for him. One day he will take the bait meat and I can start taiming his habits.


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## Single Mom Rich Mom (Jul 2, 2010)

I have a friend that asked me to do up a debt repayment sheet for her. She's over $35k in debt with credit cards and went into a HELOC and refinanced the house when the market was high - fortunately it hasn't come all the way back down or she'd owe more than the house is worth. Just the week before she asked me to do the debt repayment, she went to Banff for the weekend because she just NEEDED to get away. I told her I wasn't willing to waste my time doing anything unless she was changing her definition of NEED. 

Some people just have to pee on the electric fence. And I'm convinced that most people just don't get it at all - and never will. I think in 20 years we'll see a huge number of seniors that have to work to supplement social security unless their parents leave them some dough - which they'll probably spend.


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## Four Pillars (Apr 5, 2009)

It's hard not to butt in when it comes to people's money problems.

One of my fave articles of all time...

http://bly.com/blog/general/why-i-never-give-unsolicited-advice/


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## Cal (Jun 17, 2009)

Great post FP. Worth the read for everyone, and not just financially applicable.


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## kcowan (Jul 1, 2010)

And then there are some regular posters who are always soliciting advice, e.g. ending posts with "What do you think?" but never take the advice given.


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## the-royal-mail (Dec 11, 2009)

kcowan said:


> And then there are some regular posters who are always soliciting advice, e.g. ending posts with "What do you think?" but never take the advice given.


Or even responding to the comments provided. Many will post and then disappear, reappearing months later with a whole new thread and never responding to or participating in existing threads.


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