Most people are loath to discuss their finances with their inner circle, especially when money is tight: One 2021 Insider survey of 2,130 Americans found that money comes in dead last on the list of topics people want to discuss with their friends. (Even politics and their health were preferable conversation starters to finances.)
When you’re in a close friend group, though, it’s not hard to suss out who’s worried about money: Maybe they’re always behind on Venmo requests or opt out of friend trips repeatedly because “money’s a little tight right now.”
As a friend, it’s hard to know what to do: You might want to help them get back on track financially because it’s hard to see someone you care for struggle to pay the bills on time or make important financial decisions like opening a 401(k).
The one thing you should never tell them, though? “You’re bad with money.”
When it comes to anything money-related, tough love is rarely the way to go, said Andrea Woroch, a consumer finance and budgeting expert.
Aside from the fact that it’s a rude thing to say (no one wants to be bad at anything: bad at love, bad at holding down a job, bad at money), remember, money is a taboo topic, and you probably only know a part of the story, Woroch said.
“There are so many reasons someone could be stuck in a tough financial spot that have nothing to do with their ability to manage money,” she said. “A series of unexpected bills, job loss, college debt, an injury that impedes on ability to work and other issues could be at play, affecting a person’s financial situation.”
“If someone has been constantly told that they are bad with money and it has been programmed into their subconscious, it can easily become something they believe to be true, that it's a part of who they are.”
Depending on the culture that you grew up in, your friend may be responsible for assisting their parents or siblings with expenses that are outside of their own, added Marsha Barnes, a certified financial therapist and the founder of the coaching service The Finance Bar.
“Additionally, we all have different forms of teachings about money growing up: some of us have been taught the scarcity mindsets, the belief that money is meant to be spent and not saved, or that those who have money are greedy,” she said.
“Judgment is just the wrong place to center how we think about others and their money decisions,” she said.
Blanket statements like “you’re bad with money” can become a kind of self-fulfilling prophecy, too: Hear that enough from family and friends and you might start to believe it or even act on it, said Jen Reid, a financial planner and the founder of BASE Financial Planning.
“If someone has been constantly told that they are bad with money and it has been programmed into their subconscious, it can easily become something they believe to be true, that it’s a part of who they are,” Reid told HuffPost.
That’s especially true if they have proof to go along with it, she said: missed car payments, for instance, being on the verge of having debt, or being confused by investing when everyone else seems to have it figured out.
Is there a better way to surface this topic if you’re worried for your friend? Or is it even your place to bring it up? Below, our financial experts share their thoughts on talking to someone you’re close to about their financial choices.
Only offer advice if they ask for it.
If you do have enough information to confirm that someone is making reckless decisions, Reid says to ask yourself: How and why does that affect me and why is it my responsibility to fix it?
AJ Ayers, the co-founder of Brooklyn FI, a fee-only financial planning firm based out of Brooklyn, New York, agrees that it’s probably not your business.
Generally, she says to approach giving money advice to your friends and loved ones like you would relationship advice: Only offer your commentary if your friend asks for it.
“Your definition of reckless spending is likely different than someone else’s,” she said. “It’s expensive to be poor in this country, so more often than not, I would say keep your judgments to yourself.”
If your friend is vocal about being stressed about money, then, of course, you can offer support to them ― through listening rather than offering solutions, at least at first.
“Giving a friend or family member a chance to speak openly, free from concerns of judgment, can lead to productive conversations,” Woroch said. “Maybe you can give advice if you’ve been in a similar situation or maybe you know of someone who can help.”
Plan outings that won’t break the bank.
If you notice friends are making choices you see as wasteful or unaffordable for their lifestyle, subtly suggest a cheaper alternative, Ayers said.
“Instead of brunch, go for a hike,” she said. “Avoid the costly group birthday dinner at all costs! Lead by example and show your friends your positive spending habits as encouragement.”
If they ask for help, send them links and resources.
If your (judgment-free!) advice is called on, outsource the help. Share links to articles with helpful financial tips or a podcast you like that addresses money management, Woroch said. (For instance, the aptly named “Bad With Money” podcast or “Oh My Dollar!”)
“Even something as simple as sharing a favorite cash-back tool like CouponCabin.com can offer some hope and put your loved one in the right directly,” she said.
“Sites like that offer up to 25% cash back for online purchases on everything from online grocery and take out orders to home goods to clothing to hotel bookings,” she explained. “That extra $20 or $50 earned each month can help pay down debt or build savings.”
If they’re in debt and ask for help, Ayers says to point your friend in the direction of free credit counseling or low-cost debt management programs.
“There are some fantastic free resources that help people in tough spots get a handle and see a path out of a dire debt situation,” she said.
Applaud smart financial decisions they make.
Remember, our relationships with money are complicated. This shouldn’t be a morality conversation: People are not their behaviors, most of us are doing the best we can with the resources we have, and we are all capable of change.
“Help the people in your life shift into an abundant mindset by reinforcing when they are doing good with money, or make good decisions,” Reid said. “That’s the kind of thing that will help shift those internal programs on a subconscious level.”