SubscribeSun 1 Jul 2007
J.D. over at getrichslowly recounts a conversation with a friend of his seeking some money advice. The basic summary is that his friend Gillian is having financial difficulties, and wants some advice. J.D. basically suggest some cuts she and her husband can make to their lifestyle. She hears, but refuses to listen. Gillian isn’t willing to make the sacrifices that would put her in better financial footing. Like many people Gillian wants to have her cake and eat it too. Sadly, life doesn’t work that way.
The bigger question in all of this is how does one advise friends, especially in financial matters? In general, I’m not fan of giving unsolicited advice. Even with the best of intentions, unsolicited advice often goes in one ear and out the other. At worst, it makes someone dig in more into a wrong headed position. I know this might seem strange coming from someone who positions himself as someone who likes to give advice “solicited and unsolicited.” I try to refrain from telling people how they should lead their lives (well most people), and at least not too directly. I rather in the course of conversation steer someone to alternative way of thinking. I’m not always good at this, but I do think it’s a better way of giving advice.
So for instance let’s say I had a friend who was considering buying a timeshare which I generally think is a bad idea, I would never start off saying that timeshares are terrible investments. I would actually acknowledge that timeshares can be quite useful, and a really effective way to vacation. However then I would start asking questions of my friend. “Do you think you’ll be able to take enough time off?”, “Have you looked into how easy it’ll be able to trade the timeshare?”, “Do you think the maintenance fee will increase at a higher rate over the years?”, etc. The questions should ideally be worded in way that is more inquisitive than accusatory.
Even if you can give money advise to a friend without offending their sensibilities, it still doesn’t mean they’ll take it. Like JD’s friend, Gillian, most people want a free solution to every problem. People sometimes aren’t ready to make changes in either how they spend or manage their money immediately. However as long as lines of communication are open, then change is possible. Ultimately that’s why we advise our friends about so they can makes changes for the better.
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July 2nd, 2007 at 5:41 am
I don’t advise my friends. Unless a friend ask me a very specific question, I try give as objective an answer as possible. I gave up on “advising”. I do what you do Dong, I don’t flat out say that’s a bad idea… However, my friends are sharp, when I try to “steer” them to alternatives, they quickly catch on and become defensive. They like to chanllenge my viewpoints to defend their own. Even if I just want to have a discussion or conversation [on money, politics...], it can easily turn into a debate, people often times spend most of their energy defending their position, rather than learning to be more receptive to new ideas.
Anyway, it’s no fun to communicate with people who are defensive.
July 5th, 2007 at 7:52 am
Defensiveness is never good. I’ll drop the conversation if I feel the tone has gone defensive. However, often times I don’t mind debating a position as long as it doesn’t get too personal - this goes with politics, money or whatever. I tend to take the counter argument in any discussion (I want people to see both sides), so I’m always disagreeing with people.
July 9th, 2007 at 6:33 am
Nice post! I also enjoyed your guest post on Well-Heeled’s blog.
I am guilty of offering my opinion when it has not been asked for. I did harass one of my friend’s weekly until she signed up for our companies 401(k) program (we have an EXCELLENT company match). However, I try to keep the advice about money to a minimum because I know that I have made and continue to make poor financial choices.
July 9th, 2007 at 8:16 am
I for one am glad you harassed your friend to sign up for the 401k. I hate to see it when people leave money on the table when there’s a company match. I think we’re all gonna make bad financial choices, but as long as we’re learning and improving, it only gets better.