Today’s question comes from Amanda in San Antonio, Texas…
“I have a bit of a doozy for you. My best friend in the whole world is in about twenty thousand dollars of credit card debt with interest rates ranging from 25-30%. And her husband’s car was just repossessed for the second time in four years.
She has a stable W2 job. He works a job that is unstable and unreliable and also an hour and a half from their home, and now he can no longer commute to it. They are living outside of their means.
I don’t have all the details, but from what I’ve gathered, they’re going further into credit card debt month by month, and now there’s this car repossession emergency.
I’ve done a lot to try and help, suggested he get a job that’s walkable, and they save up an emergency fund. Everything you guys would recommend.
I want to be a good friend, and I have the money to help. But I also want to hold a boundary and I do not want to enable the behavior that got them into this position.”
The short answer:
We are so sorry to hear about what your friends are going through! It’s hard to sit on the sidelines and watch friends make decisions that continue to dig a deeper hole.
But the truth is, you can’t put their financial burdens on your shoulders.
Giving them money and helping them financially is likely to only hurt them in the long run. Not to mention change your relationship.
Remain Patient
It sounds like a lot of things need to change for your friend and her husband. It’s not just a single bad decision they made or an unfortunate circumstance.
They are in a recurring debt cycle. Turning this around will take time.
You are a good friend and should continue to offer encouragement, advice, and just be there to listen.
But also know that you can’t solve this for them. They need to make the changes themselves and build new financial habits.
Proactively check in with them. It’s during the down times when they are being silent that things are probably going wrong. Shame can be quick to take over, which can lead to a spiraling effect. So keep the door open and be the one they turn to for support.
The last thing you want is them commiserating with other folks in bad financial situations. They might get horrible advice that further stokes spending or making bad money choices.
A good friend like you should be the one to slowly prod and start the conversation. Be a mix of serious and empathetic. Your heart is in the right place!
Don’t loan them money
Giving money to someone with bad financial habits is like pouring water into a bucket with holes. No matter how much you give, it won’t hold unless they learn to fix the leaks!
Loans between friends and family, no matter how close, far too often end in hurt feelings and significant relational damage.
The best way to help is to continually nudge them in the right direction with good advice.
By the way, if you do feel compelled to financially help them, make sure you think of it as a “gift” and don’t expect the money back.
A good way to give money is by rewarding positive changes. For example, matching every dollar they put towards paying debt. It helps them, but they are also doing some leg work too.
Just blindly giving money or paying bills for them is a slippery slope. There’s no lesson attached. And again, it can lead to hurt feelings in the end.
Avoid shame
Living in debt and having your possessions taken away is truly embarrassing.
The biggest thing you can offer is a sympathetic ear and some very light guidance, preferably in a way that doesn’t involve shaming, which I’m sure you wouldn’t do.
Shame often perpetuates negative feelings, which tend to lead to more of the unwise behavior that has found them here.
One way to avoid that dynamic is to share some of your own mistakes! That can make them feel more comfortable learning from you.
The truth is, everyone makes financial screw-ups! That’s how we learn and get better.
Help them put these past events behind them by learning from the experience. Facing those ugly times in life head on will help them emerge stronger and wiser. If they bottle up their feelings and hide in shame, they’re likely to repeat the same mistakes.
Get them professional help
It might be a good idea to distance yourself a little from being their main source of financial info or help.
Consider connecting them with a helpful resource, like NFCC or MMI. These are both non-profits that offer credit counseling at no cost. They can also help create debt management plans, renegotiate debt terms, and aid in budget creation.
This situation could get worse before it gets better. There’s a chance that bankruptcy might be necessary. But the folks at one of those non-profit organizations can help determine that.
These credit professionals have seen plenty of folks in a position just like your bestie. So it’s easier for them to take the reins and get them back on track.
This isn’t to say that you don’t have the knowledge to help. It’s just that trying to be their budget counselor could do lasting damage to your relationship.
Help them find someone else to fill that role. That way you can be more of the supporter/encourager/friend who also chimes in with money wisdom or doubles down on what the counselor recommends.
As I heard someone else say, “be the wall that holds them up, not the roof over their head”.
It’s a team effort turning their financial life around. Call in the experts!
The Bottom Line:
If this was a single financial crisis where a friend needed help, you might be the perfect person to help. But because their situation has spiraled out of control significantly, you can’t take their troubles on your shoulders.
You can, however, be the one who gives them continuous encouragement, support and insight to improve their money choices. It’s rock bottom times like this when they need you the most!
Getting the help of a professional is a great idea too. You’ll be able to offer support from different angles.
They’ll probably have lots of questions as they learn more and it’ll be really nice to have someone they trust deeply who they can bounce them off of!
Good luck Amanda!!
For the full version of this discussion, check out Podcast Episode #895 (it’s the 1st question in the episode)
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