Helping Friends/Family With Budgeting

[cytoglycerine]

Happy Monday, Everyone! Hope you're all doing well today


Have any of you ever helped a friend or family member with their personal budget, at their request? If so, how did it turn out? I've had 3 experiences with this, the 3rd of which just happened...


Over the past week, I helped friends (a married couple) put together a budget. They've been a financial train wreck for as long as we've been friends, but over the last couple of months things have taken a turn for the worse. Two weeks ago, they came to me desperate for help with managing their money - They had both just gotten paid 4 days prior, and even though it was still 10 days until the next paycheque would come, already their bank balance was nearly down to zero. They have debt obligations out the wazoo, one of them being to his mother, and they were being pressured by her to cough up the cash ASAP. So, I got all their bill/debt amounts, income and other details, and did some number crunching (my favourite!!). Luckily for them, their situation isn't "too far gone" that they literally cannot pay their bills - Their problem was more from an organization stance, as well as from a lack of discipline (read: they're addicted to spending everything on whatever tickles their fancy). I spent a lot of time last week hammering out budget details with them, and I put together a neat little interactive set of Excel spreadsheets to help them keep track of their finances and debt repayment. They were a little irked at how little spending money they were allowed to have in the new budget (I cut it in half from what they were used to), but all in all, they seemed very relieved to finally have some kind of a plan, and to no longer be flying by the seat of their pants. Overall, it has been a very positive experience so far (for me at least! haha!), and I hope they stick to it, and get themselves into a better place financially.


My other two experiences - The first one was with an old friend who was a compulsive spender/shopper. She wanted me to make a budget for her, with a debt repayment plan. I obliged, but when I presented it to her, she scoffed at it because I cut her spending (which was at ~75% of her net income ) down to a "reasonable" 20%. She insisted that was "not enough spending money". We stopped being friends shortly after that, so I don't know if she ever did change her spendy ways...I'm going to go with NO, though...


I also helped my sister make a budget twice in the past two years (one for when she was saving for grad school, and another for when she moved out of our parent's place). She has mostly followed it, and has saved over $20,000 during that time.


So I guess I'm batting .500 right now...We'll see how my newest guinea pigs do with their budget, and hopefully my average will go up to .667 ;D


How about you guys? What's your batting average in helping others with their finances?

[cytoglycerine]

Mar 7, 2011 8:58:58 GMT -5 @daphne87 said:

I've kinda discovered that people don't actually want to change their lifestyles. At least the people I know who are in financial trouble. Live and let live I suppose!

Yeah I've found this too - The people really want to have to change. My married couple friends certainly do. My friend from a few years ago, not so much!


But just to be clear - I didn't solicit this budgetary help to them...They came to me on their own and asked for help because they know I'm "good with money".

[Savoir Faire-Demogague in NJ]

I just read the subject title of this thread and did not even bother to actually read the initial post.

Stay out of it.

[Urban Chicago]

I only offer help if I'm asked.

Usually, it starts with how great I am, how "lucky" I am to be able to save money, etc... and they ask for help. I make suggestions and there's a stupid excuse for why they can't do even one thing. Conversation ends with neither of us happy.

[Anne_in_VA]

Tried to help a few people and echo what Urban said - most people don't really want help, they just want to continue to live the way they've been living and still save. Delayed gratification works but try telling them that!

[cytoglycerine]

I'm asking more about people who specifically come to you and say "I want help managing my finances - Will you help me make a plan?", as opposed to people who just whine about their problems to you, and are really only looking for sympathy. IMO, those people can't be helped while they're still in a "victim" and/or "others are to blame" mindset.

[whoisjohngalt]

I can't do it for two reasons.

One - my approach is too "cold". I don't take emotions into consideration and most people don't like that. And two - I HATE wasting my time, so if I do the budget for you and you just ignore it, it would piss me off bc you just wasted my time.

So, I stay out of it. I've made single transaction suggestions and left it at that.

Lena

[❤ mollymouser ❤]

I haven't helped family.

I haven't helped friends.

But I have helped friends of friends, coworkers, and people from my church (and a few strangers, actually) who've asked for assistance. At one time I was a trained "budget coach" for Crown Financial Ministries (www.Crown.org), and was on the list of local resources. Most of them, as far as I know, made some significant and positive changes.

I've also gone through the Dave Ramsey Total Money Makeover workbook with a few people, too.

And I provide occasional advice and budgeting assistance on a christian forum I frequent that has a Finances subforum.

[Tiny]

I once and only once attempted to actually help someone put together a budget after they asked how to do it - but they didn't seem to want to face the 'light of day' by actually looking at their expenses other than how much they paid in rent... they weren't sure how much they paid each month for utilities and seemed afraid to look at their records... they got even more evasive when we moved on to their credit card bills. Mind you I wasn't even taking down their numbers. I was trying to get them to list/write down all of their numbers on paper so they could eventually set up a spreadsheet. I didn't see any of the their numbers. Denial isn't just a River in Egypt.

Now, if 'how do you budget' ever comes up I direct the askers to the worksheets/budget 101 articles at Bankrate dot com. If they are ready to take off the peril sensitive glasses - they can easily figure out how to budget on their own (with a search or two on-line). It's not rocket science.

[money100]

Hey Lena, what does this mean:

"I've made single transaction suggestions"

I do agree with the majority of posters here. I try my best to stay out of it. Certainly, I would never ask or involve myself with even the most subtle of comments. But even if someone were to request help from me, I'm afraid I would be quite hesitant and do as ATSiaRU and point them to the internet. However, this rule doesn't apply to my mom. Few rules are the same for mommies

While I said I stay out of it, that doesn't mean I don't feel blinding rage at some of the things people around me have done. My BIL is living with a lovely girl who is a total freeloader. She insisted on friending me on Facebook so I'm incessantly treated to updates about how she's not going to work because it snowed, she just bought an iPhone 4 and is unable to cook or clean because she doesn't feel like it. I feel angry about it. Imagine my poor BIL who works a stressful and physically exhausting job for close to 10 hours with an hour commute each way, coming home to have to make himself dinner because he's saving money for concert tickets and language lessons for the both of them.

Then again, you teach people how to treat you, right?

[raeoflyte]

I helped my sil put together a budget when she asked for help. She was living with us (separated from her husband) and had already signed a lease on an apartment. I don't think she has opened any debt since moving on her own, but everytime I see her, the first words out of her mouth are, 'I'm going to start saving next month', seconded by, 'I spend way too much money going out to eat/drink'.

My sister asked for help with a budget a few years ago. I offered her my spreadsheets, but said that I didn't feel like I could be objective enough to help with her specific finances. My parents were paying for her to live in a unit of a triplex I owned (jointly with my parents). She worked full time, but had over a dozen cats to support hence not being able to pay rent...

I will send out my blank spreadsheets to anyone who asks and tell people how I budget/track (if asked).

[DVM gone riding]

I have done "mock" budgets for people-category specific for that person with vague numbers in excel.
And shared the spreadsheets I use (sans numbers) but I wouldn't ever be so willing as to do all the true number crunching for them, mostly because I don't want to know that much info about them and to do it right you have to know everything. and I think it is a lot of work to do right when most people can't be bothered to follow basic advice anyway.

[whoisjohngalt]

Hey Lena, what does this mean:
"I've made single transaction suggestions"

I strongly encouraged to a friend not to sell her 3 yr old car to buy another brand new car. She didn't listen.

I suggested to another friend to start his 401K. He did listen.

Things like that.

But I refuse to get into more details than that.

Lena

[money100]

Thanks, Lena

[Cookies Galore]

BF's sister asked me a couple of weeks ago if I could help her plan a budget and I'm going to help her.She recently moved back to the state to start her professional career and is excited to start saving, move out (staying at their Dad's temporarily), etc. I took her out to lunch to celebrate her starting a new job and she asked if I would sit down with her when she gets her first paycheck and help her figure out a plan. I absolutely am going to give her some advice.
I was 23 not too long ago, so I can remember being young and doing dumb things with my money. I'm sure she'll have hiccups, much like myself in my early 20s, so I think it might be good for her to have a cheerleader on her side who has seen and done it all.
I did send her the link to this board, so I wonder if she'll read any of this! ;D

[whoisjohngalt]

No problemo

[blackcard]

Stay out of it, like several others have mentioned. At least if you want to keep them as friendly family and friends. I speak from experience. Several of my old college classmates of mine are not speaking to each other, over this exact issue.

[TheOtherMe]

I watch my niece and her husband living in the "we have to have it now" world and no the other shoe will be dropping someday. Nephew who bought a new house is doing the same thing.

Many, many years a very good friend asked me to help her balance her checking account, as she had never done it. She had always let her husband take care of it, never looked at the financial stuff and had just received a call from the bank that she was seriously overdrawn. The account was only in her name.

We went to the bank and paid to get the statements and all the canceled checks for the previous month. When we went through them, it was very apparent what was happening. He was writing checks to cash and forging her name.

When she confronted him, he admitted he was buying cocaine with the cash and she threw him out of the house. Best move she ever made. I never did like that guy.

[sbcalimom]

I'll help people make a spending plan/budget if they ask but I try not to get emotionally involved with regards to the outcome.

My mom has asked for help countless times and never really sticks to any of my suggestions which used to drive me batty. Now, I just don't really care. If she was to ask again, I probably wouldn't help and just say I was too busy which isn't that untrue anyways.

My sister has asked for help a couple times and has done really well. The first time was during her last semester of college when my parents handed her the money for her last semester and said, figure it out. She had absolutely no idea how to figure it out so she asked me and we set up a plan that would allow her to pay all her bills and apply to grad school. The second time she really just asked my opinion on how much she was spending since she hadn't really lived on her own yet and wasn't sure how reasonable her spending was. Now, she'll occasionally ask for advice on how to open a cc or Roth or something like that. I think she's the perfect example though of someone I'd love to help - she learns and applies the knowledge and comes back with intelligent questions.

[cytoglycerine]

Thanks for all the replies so far! Interesting to see the responses, however I must admit I am a little surprised that the majority of people are saying to stay out of it, and the minority saying they have or would help in the same situation...I figured it would be the other way around. I dunno...I have the time (TOO MUCH time ) and desire to help, and the technical/math skills to make nice spreadsheets with nifty formulas - so why not help? If they came to me first, I don't see why it's so bad. A few of you suggested they would direct advice-seekers to the internet but somehow that seems a little cold and uncaring to me. Who knows, maybe I'm doing it more for me (for the love of math & spreadsheets, and just for something to do for a change) than I am for them...True altruism doesn't exist I suppose.


However, if it turns out that this was a huge mistake and everything blows up in my face, I will post about it and admit the error of my ways, lest someone else do the same thing in the future.

[ca]

I wish I was asked by my brother and sister in law. Although, they have no income and 4 kids...so not sure how a budget would help them. "Get a damn job!" would be more effective.

I think most people would be reluctant to showing you their income, which is necessary for a budget. It's akin to showing you their naked body...

[cytoglycerine]

Mar 8, 2011 10:00:07 GMT -5 @ca said:

I think most people would be reluctant to showing you their income, which is necessary for a budget. It's akin to showing you their naked body...

Interesting analogy...These friends I just helped were more than willing to show their income, but they were very embarrassed to show their debts (also necessary for a budget). It would seem that they felt most naked revealing what they had spent rather than what they had earned.

[Wisconsin Beth]

I tend to point people here, for the most part. Or ask if they're tracking their expenses so they know where their budget holes are.

[money100]

@ cytoglycerine, I do understand what you're feeling with the "help yourself, there's Google" approach. Like you, I love playing with Excel and different formulae to figure out where we'll be next week, month, etc. What we'll be able to actually save for a DP to a nearby condo when we finally finish paying off our $30K debt.

However, I know I would be pissed off beyond belief if my friend/family member told me their "dirty" secrets and bad habits, committed to getting themselves out of the red, and then I noticed they perpetuated the same habits again. I guess I'm preempting the maintenance of a good relationship. I do say vague things like "I've noticed allowing myself only $X dollars a week works best for me because I can't manage a longer term budget." I do wish to help them. I do care deeply and want them to lead stress-free lives but I'm certain that our relationship would be ruined if we added this financial component.

[azphx1972]

The biggest challenge I find with helping people is getting their emotional baggage in check. I mean a budget is pretty straightforward; it's just a matter of allocating what's coming in into outgoing categories according to one's priorities. If someone's only problem is being bad at math, then it would be a simple matter to get them straightened out. However, for most people, that isn't the case. They just can't say no to themselves, contain their pride, or keep from acting out of fear.

I remember when the stock market dropped into the 6000 range a couple of years ago. A friend of mine, in her 50s, was so scared about losing everything that she decided to move everything into cash. I told her that I wouldn't sell if I were in her position, but I'm not one to force my opinion on anybody, and I had no crystal ball to prove that my advice was any valid. So she sold at the worst possible time, and completely missed the rebound. It was the latest in a string of questionable financial decisions that I was privy to. I did point her to Suze Orman's podcasts, as she claimed to value Suze's opinions. However, I didn't notice a huge change in behavior. She ended up walking away from her house recently, even though she purchased before the boom, because she refinanced several times to take equity out to pay for bills, and when her sister moved out, she didn't want to get roommates to help pick up the slack. It's just sad to see someone making ~$80k go down the tubes financially, but I know it would have created resentment and tension in our friendship had I tried to be more forceful about exerting my opinion.

[patchwork150]

Recently, this happened to me- my BIL's spouse asked me for help. We are pretty close in terms of relationship but not emotionally. We live in the same apartment building, have dinner together all the time, I'm always babysitting my neice, etc. I try to be there for her. We're not best friends though. We have very different opinions on things, but look past them for the better of our family.

Anyways she always complains about not having $, and I know having kids is not easy. I usually offer small suggestions but mostly give her the sympathy she wants. Lately she's been talking about needing to save $ but not being able to, and asked for help.

I showed her how I budget and made up a spreadsheet for her to customize and use, showed her the basics to budgeting (she doesn't). I pointed out that paying her electricity and TV late every month was costing her $10 extra every month. I pointed out that she needed to know where her money goes, and write it down for a month to get an idea of her overall finances. I even took her with me to cash in the bags of bottles we have for $- I suggested she put it into savings ($35 or $40) to start. She bought McDonalds instead.

Since then, she has not used the spreadsheet, and continues down the same path. I ignore it. I gave her help when she asked, and I will be here to help her if she wants it. Since she didn't follow through with what I started her on, I won't pursure it- it's all up to her.

Privately though, I think she's a financial mess. She will buy sweetbread from the bread guy every week ($30), but won't pay her bills on time. She has no savings, and a 3 year old daughter. Her <s>husband</s> (they're not married, but they act like husband and wife) let's her handle the finances and is very hands off- he likes to blame her but will take no responsibility. Not a situation I would like to be in! Her main weaknesses are: grocieries, wating out, and random expenses from people that sell stuff out of magazines (candles, avon, pizza, girl scouts, etc). She spends $350 twice a month on grocieries, plus stops 2x a week at the big M or dollar store in between. AND she gets WIC. Her kid is on medicade, and she has reduced daycare ($25 a week). I don't understand how she can't make ends meet! Her husband makes $500 a week, she makes $290 (after taxes, etc). I hope she can gradually work things out, in the meantime I will just be (hopefully) a good example.

edit: she gets wic/medicade/etc because she reports her income only I think. Last time they both reported, but she used 4 paystubs when her kid was sick and she only worked like a day or two each week), and my BIL used paystubs where he missed work too. I try to stay out of it.