Learning How to Handle Friends Asking for Financial Advice
The easiest way to end up in an awkward, uncomfortable situation is for someone close to you to ask you for financial advice. This puts you in a very sticky circumstance that you should do your best to get out of without causing any offense.
After all, you do not want to be accountable for anything that may happen to your friend or family member because of your advice. If you want to keep your relationships intact and healthy, avoid giving any kind of financial advice.
If they do come to you, there are some things you can do to handle the situation gently and tactfully. First, determine your friend’s true intent.
Are they looking for someone only to listen to a complaint, or are they willing to accept specific suggestions? This is one key to communication that would be difficult to interpret if you are not speaking face to face.
Sometimes, a concerned friend is looking for only confirmation that a purchase will not have a long-term negative effect on their finances, and not a detailed spending plan. Keep in mind that a friend’s willingness to talk about money is not an invitation for you to offer your suggestions.
Look for specific questions directed to you, and try to determine if they want a truthful answer, or just a friendly ear. Once you determine this, you can better know how to proceed.
You may want to consider redirecting your friend’s attention to experts. If the question is simple, feel free to offer a few opinions, just make sure that they know that they are only opinions.
When a friend is looking for a quick recommendation for a new savings account, feel free to tell them what you use, and why you like it. You do not have to be an expert to handle this kind of request-opinions based on personal experience are generally welcome, and safe.
However, when it comes to questions whose answers depend more on an individual’s full financial picture, like whether to invest in a Roth or traditional IRA, avoid giving concrete advice or helping them make decisions.
Perhaps you could simply suggest some resources that might help, or a financial adviser who will take the time to analyze all the relevant numbers. Just make sure that you do not become that financial adviser!
Be careful not to offer any unsolicited advice. If you see a friend in financial trouble, it might be tempting to offer your help.
It can be very hard to watch a friend or family member make poor financial decisions, and not know how to manage their money. It can be very tempting to want to jump in and help, or stop them from doing something you see as a mistake.
However, remind yourself that it is none of your business. Inserting your opinion without being asked for it can be extremely offense, and sever the relationship completely.
There may be a point at which intervention is necessary, for example, if their financial choices hurt others in addition to themselves. This is usually only in extreme circumstances, however.
Whatever you do, do not lend money to a friend or family member to help them with financial problems. You can basically end the relationship right there.
Adding another obligation is usually just a temporary relief, not a solution. Your friendship will turn sour if your friend cannot pay you back, and you will be bitter when you see them spending money on anything other than repayment.
Once you lend money, you do not want to see your friend taking vacations rather than accelerating their credit card debt payment. It is better to let them go to a lending service, and keep being their supportive friend.
Last but not least, if you do give advice, remind them that your thoughts are only opinions. No one knows for certain what will happen in the future, and even when considering only the present there are few absolute truths.
Your opinions are formed from your own circumstances and experiences. Any one person’s experience might not fit the model of the typical American.
Just make sure to handle the situation with tact and discretion, while keeping your relationship at the forefront of your priorities. With the right care, you can be a good support and friend, without getting involved in personal matters.
Jack R. Landry has worked since 1988 as a tax attorney. He has written hundreds of articles about finding a tax lawyer Henderson Nevada.
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Jack R. Landry
JackRLandry@gmail.com
http://www.TaxCrisisInstitute.com
