How to be a Better Unofficial Financial Advisor to your Friends and Family: an Interview with Ashley from Money Talks


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Are you someone’s unofficial financial advisor?

A recent survey from PNC Bank showed that personal finance bloggers were the unofficial financial advisors of choice for those aged 28-29. More than one in three respondents aged 28-29 consulted the internet for financial information. Only a little more than one in five met with official finance professionals like bankers or financial advisors.

Sometimes the appointment to unofficial financial advisor has little to do with our knowledge or desire to give advice. Regardless of parental financial IQ, 65 percent of children approach their parents to discuss money issues. Over half of parents feel that they need to do more with their financial knowledge, and at least a third of parents grade their financial IQ below a “C.”

Whether our station as unofficial financial advisor was attained by self-promotion or appointment, it is important to understand that we are in a position of trust. It guarantees that not all financial discussions will be easy. In fact, our honest opinions and advice may not always be welcome. This leads us to the biggest problem with being an unofficial advisor: unofficial, by definition, means that we are not necessarily the most prepared or skilled people for the job.

That’s why Ashley of Money Talks is our special guest this week. Ashley is a successful financial blogger and a money coach.  Her blog is a finalist for the “Best-Kept Secret Personal Finance Blog” category in this year’s Plutus Awards. Today Ashley will share with us some of her personal insight about how to talk to friends and family about finance.

(Me)  What fences do people put up around their personal finance situations that make it difficult for them to openly discuss their finances, and how can we get around those barriers?

(Ashley) There are a lot of fences people put up around discussing their personal finances.  Mostly people just don’t want to be judged.  Our culture values presenting a certain level of wealth, it’s common for people to get into debt or make poor financial decisions so they can look like everyone else.  It’s pretty tough to then turn around and admit that it’s all financed and you are barely keeping up.  They think everyone can afford that lifestyle but them.  To say out loud, this isn’t me, I’m faking; it is HUGE.  It’s hard to take off that mask and be vulnerable.

Also, most people were not taught about finances growing up.  They may have seen their parents financing their lives and didn’t realize the stress that that can cause.  It’s hard to admit you don’t know the right steps to take.  You just do what your parents did.  Even when it starts to crash down around you it’s difficult to ask for help, you feel defensive of your ways even when it’s not working.  It’s very difficult to come to terms with the idea that the bedrock principles you’ve been following aren’t the best way. 

I think the best way to break down those barriers is to use stories from your own life.  We’ve all been there.  No one is perfect.  Let them know they aren’t alone.  It’s so common to be financing your lifestyle.  We all have stories where we felt pressured to project a certain image or made big financial mistakes.  Find that common ground.  It’s not “I’m the expert and you’re the student.” it’s “hey, we are all in this together, let’s dig in and figure out what works”

(Me) Once a discussion gets going, what boundaries do we need to be mindful of and have you learned any tricks for spotting them?

(Ashley) You can tell when you hit a hot topic.  You can hear it in their voices and they don’t want to talk about it anymore.  I know one person who is still supporting their grown child, when that topic comes up I can just feel them shut down.  Their answers become very short and they start to fidget.  I can hear the tightness in their chest.  I know they no longer want to be supporting their child but they feel trapped.  It’s clearly about more than money.  If I started questioning why they are still supporting their 25 year old child I’d not only be questioning how they handle their money but also their parenting.  That’s two emotional topics at once! 

How hard to push that boundary depends on the relationship and the nature of the conversation.  If it’s a casual conversation with a friend then you probably shouldn’t push it.  However if that person specifically asked for help then you might want to push it a little more.  If it’s a family member and it’s very important that issue get resolved, say end of life planning, then you probably need to go ahead and say what needs to be said… in a loving way, of course.

(Me)  What responsibility do we take for the advice we give and how can we avoid giving bad advice?

(Ashley) At the end of the day everyone’s choices are theirs to make and they are ones who are responsible.  I always try to back up any advice I give with resources for the person to get more information.   The goal shouldn’t be to give advice, but to educate.  I don’t tell people they should take a specific course of action.  Instead I will say “you could do plan A, which has this benefit and pitfall.  Or you could do plan B which has this benefit and pitfall.” and so on.  Back that up with resources and the person who has to live with the decision can make the choice. 

(Me) When we have a friend, acquaintance or loved one who is making poor financial decisions; is it ok to pull the trigger first? Can we broach the subject or is “waiting to be asked” always the best policy?

(Ashley) This is so touchy.  In general I’m going to say you should wait to be asked.  But it really depends on the relationship.  Financial problems are often not about money.  So you aren’t going to change someone’s financial life by setting up a budget and walking away.  No one is going to make changes in their life until they are ready to do so.  Really the most you can do is let your friend or loved one know that you are there for them.  Hopefully they will come to you when the time is right for them.

(Me)  What are some ways we can break the ice to financial discussions?

(Ashley) If you are trying to bring it up casually then you can start with a story from your own life.  Let them see that you aren’t perfect either.  If they feel comfortable talking about it then they might start talking about their personal finances. Then you can gently guide the conversation. It will probably take many conversations before everyone feels comfortable. 

If you are trying to talk to a loved one who has a serious problem then let them know you are concerned and that you want to talk.  Come from a place of love and concern not judgment.  Something like “I got a call from a creditor looking for you.  Is everything ok?  Is there anything I can do to help?”  Finances are deeply personal.  Short conversations will be less stressful than marathons.  I’ve also sent a few emails to loved ones instead of trying to talk face to face.  In email you can make sure you say exactly what you intend to say and the other person doesn’t feel the need to respond right away.  It’s less threatening. 

(Me)  When dealing with a loved one, we often feel a responsibility to intervene when bad decisions are being made, yet a person’s money is theirs to spend. Where does the fine line of responsibility end?

(Ashley) Like you said, their money is theirs to spend.  I certainly have family members that I wish spent their money differently, but there is only so much I can do.   You can’t tell someone how to live their life and it’s more important to keep the relationship intact.  People don’t change their ways unless they want to.  You can try to point out the consequences of their actions but it’s still their decision.  All you can do is be there for them when/ if they are ready to make a change. 

(Me)  Are there any questions or advice which weren’t asked, but you’d like to add?

(Ashley) I’m reading a book right now called “Difficult Conversations” by Douglas Stone, Bruce Patton, and Sheila Heen.  It’s about how to negotiate the murky waters of any difficult conversation, not just financial ones.  If anyone out there is struggling with this right now it might be a good resource. 

Follow Ashley on Twitter, Facebook or RSS.

Articles from Ashley that may interest you:

Enjoy Your Money

Are Elite Schools Worth the Extra Cost

Never Say I Can’t Afford it Again!

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