How to Talk to Friends About Money Troubles

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Millennials and Gen Z seem to be more comfortable talking about money than older generations. Or at least the TikTok and Instagram trends would indicate as much. If you’re a member of one of those cohorts, I wouldn’t be surprised if you’ve had conversations with friends about whether to buy Bitcoin, your plans for buying a home and what’s the right way to save for retirement.

Still, we all probably have those friends who don’t like discussing money matters — even when we think they should. Say your friend is a financial train-wreck. They talk about credit card debt as if it’s expected, worry about moving or trying to buy a home because of bad credit or just generally seem to spend a lot for the salary you think they probably earn. You’ve tried all kinds of things to help, from giving them personal finance books, to recommending podcasts to outright offering advice. Yet nothing changes. What’s a pal to do?

Although I’ve written a book on navigating awkward financial conversations, my stance here is to leave well enough alone. Unless your friend’s financial life is directly impacting your own, it is not your business how they handle, or don’t handle, their money. 

You can’t force someone to get their financial life together. So resist the urge to course-correct their behavior and instead focus on playing the role of sounding board. Let your friend know that you’re there for support should they eventually want your advice.

Here are a few strategies to negate that desire to meddle, or to set boundaries, if that’s what’s needed.

Use their conversation starters to share your own journey. 

We routinely speak in coded language about money. A comment about waiting to have a second child until the first is in kindergarten is probably more about the cost of childcare than the desire for a five-year age gap. Lamenting about an influx of wedding invites is likely not a humble brag about popularity but simply anxiety about a dwindling savings account. 

When you’re worried about a friend’s financial health and want to share some of your own journey, these moments can be used to naturally segue into the topic of money — if done with grace and tact.

For example, if a friend is fretting about too many weddings to attend and mentions the costs, you can reassure them by sharing your own stories about missteps and difficult decisions. Maybe you remember using a credit card to finance being in a friend’s wedding, because it was awkward to say no, only to end up in debt (it happens). Or maybe you’ve suffered friends’ disappointment after telling them you couldn’t afford to attend their nuptials. One study found that citing money as a reason to not attend a wedding is more palatable to a bride or groom than simply saying you don’t have time.

Sharing such experiences can help normalize that mistakes happen and that some expenses can be out of reach. Just don’t let these conversations turn into lectures.

There is one acceptable time to talk to your friends about their finances: when you’re asked for it.

If a friend does seek out your thoughts, be open about the strategies and methods that worked (and didn’t work) for you, as well as the resources you’ve found educational and inspiring. Don’t be dismissive of their emotional baggage when it comes to money and make sure they know it’s okay to falter on the road to financial health, but that the key is to keep trying. 

I’d caution against wading into investing advice outside of some basics on getting a 401(k) started or understanding how to open a brokerage account. No one wants to be responsible for a friend losing money in the market. Instead, point them to resources that have helped you on your investing journey.

Set healthy boundaries.

The most challenging aspect of having a friend who mishandles finances is learning to set the right boundaries. If you’re being treated as an ATM or are just tired of hearing your friend complain about being broke without taking steps toward changing -- it’s time to draw some firm lines. Statements such as these below can be helpful:

“I know that you’re in a tough spot financially right now, but I’m sorry, I can’t continue to loan you money. It’s beginning to damage our friendship. I would be happy to help in other ways if you’re open to it, but I can no longer give you money.” 

“You know I respect you and value our friendship, but I honestly can’t keep repeating this conversation about your finances. I want to help you make an action plan to start taking steps to improve. I’d be happy to help if you get books and resources that have helped me.” 

Yes, your friend may get defensive, pick a fight or even bring up times they’ve helped you. But it’s important to stand firm on your boundaries and provide other, educational resources to your friend. That’s the only way to ensure you both end up working toward feeling financially healthy.

The more you openly discuss money, the more likely people will ask you questions or seek your guidance. Being straightforward about financial pressures and anxieties, being open about mistakes and sharing how you overcame challenges can make it easier for others to share their experiences too. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Erin Lowry is the author of “Broke Millennial,” “Broke Millennial Takes On Investing” and “Broke Millennial Talks Money: Stories, Scripts and Advice to Navigate Awkward Financial Conversations.”

©2021 Bloomberg L.P.

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