What do you do when someone you care about is completely out of control with their finances? Maybe they’ve run up lots of debt and can’t find a way out. Maybe it’s not the first time this has happened. Maybe you are tired of bailing them out over and over again but you don’t want your loved one to lose it all.
At what point do you butt into someone else’s business? And if you decide to go for it, what is the best approach? You don’t want to just stand there and watch the person you care about self-destruct. But at the same time, you don’t want to stick your nose into someone else’s business when it’s not wanted. Where’s the balance?
1. Get a consensus.
Before you go too far, make sure you see the situation is real. Talk to others who are familiar with the circumstances. Do they agree that there is a problem? Remember, you’re not a therapist (and neither am I) so don’t jump to conclusions. See if others agree that there is a serious problem before taking further action.
2. Clarify the problem and get the right help.
Sometimes bad finances and credit problems are just the result of bigger troubles like substance abuse. If there is such a problem, that needs to be addressed first. Call a professional who works with alcohol and substance abuse for guidance. If you are certain that money is the source of the problem, look for an expert who can help in that domain. There is too much at stake to try to do this all on your own. Get professional help.
3. Expect resistance.
If you are convinced that the issue is money and the expert you hired suggests that you continue with the intervention, that’s fine. But expect resistance. The fact that everyone except the money abuser sees the problem proves that this person is in denial.
Be ready with facts, figures and forecasts. Give them a damage report on the consequences of their behavior. This includes investment statements, credit card bills, credit reports on that person, bank statements and anything else you can use to build a solid case.
4. Bring others who recognize the problem and care about the person.
This step is crucial. It demonstrates that the problem is real and that the person will have lots of support during the process of recovery.
5. Offer a course of action.
Your goal is for the person to start a program of recovery. This can be with experienced professionals or in a 12-step program. The most widely known program is Debtors Anonymous. It deals mostly with overspending but the lessons can be applied to any financial behavior that is out of control.
When you decide to stage a financial intervention, your goal is simply to get the person to admit there is a problem and to commit to taking action. Do all your homework and be prepared. But don’t expect miracles or overnight cures. If the subject of the intervention doesn’t want to get better, you can’t do anything it.
With this in mind, I strongly encourage you to get professional guidance before you make your approach. There are plenty of good resources to find qualified help.
Have you done a financial intervention? How did it go? What was the result?