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If your loved one keeps making bad money decisions, should you intervene? And if so, what’s the best way to approach it?

Welcome back to #RichGirlRoundup, Money with Katie's weekly segment where Katie and MWK's Executive Producer Henah answer your burning money questions. Each month, we'll put out a call for questions on her Instagram (@moneywithkatie). New episodes every week.

This is not financial advice; we are not certified financial professionals—please do your own due diligence.

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Our show is a production of Morning Brew and is produced by Henah Velez and Katie Gatti Tassin, with our audio engineering and sound design from Nick Torres. Devin Emery is our Chief Content Officer and additional fact checking comes from Kate Brandt.

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Mentioned in the Episode

• Rich Girl Roundtable with a CFP & Therapist: Money, Marriage, & Combining Finances

• How to Get Out of Debt, from the FTC

• Rich Girl Roundup: Loaning Money to Friends

• What is a Bankruptcy Attorney?

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Katie:

Welcome back, Rich Girls and Boys to the Rich Girl Roundup weekly discussion of The Money with Katie Show. I'm your host, Katie Gatti Tassin, and every Monday morning we have a little casual convo, but before we do that, here's a quick message from the sponsors of this segment.

Okay, so the main episode this week is in honor of International Women's Day on March 8th. I find the economic power of women to be really astounding and just regularly underestimated and disrespected to a frustrating degree. So buckle up it's soapbox city. Onto our roundup. Henah, how are we today? What are we working with?

Henah:

It's Friday, so I'm great. This week's question—I like how I went from good to great this week. This week's question is from someone who prefers to remain anonymous, but we of course understand why. So they asked what is the best way to help family? My sibling is in a lot of debt, but they're too stubborn and prideful to accept that they need help. I don’t know how bad it is, but I know it's causing major stress.

So first I just wanted to caveat that Katie and I probably don't have the right answer because neither of us are therapists despite my psychology degree. I'm sorry dad, but it's a question we've gotten a few times. So I thought that it would make for an engaging conversation.

Katie:

Well, this is also an opportunity for me to say something that I've been thinking for a while about Rich Girl Roundup. So—yeah, buckle up everyone. I mean we picked this question because we felt it was so interesting and significant, but didn't really have a straight answer, so to speak. And I think one thing that I want to say explicitly or admit is that there is something about the q and a style format that we have created the Rich Girl Roundup, that we like it because it's a way to have more casual conversations and it's a way to kind of hear from our community what is on your minds, and what you're thinking about and what you care about and to kick things around.

But the downside is that it almost necessarily positions us as the solution havers as though we hold the answers and we're going to dole them out from on high, from our lips to your podcast app. And so sometimes that feels a little bit off to me because I don't consider us experts just like humans that have a greater than average interest in personal finance class dynamics, how money impacts families and lives and things of that nature.

So I think this is the perfect opportunity to say that because something that came through when I was reflecting on this question was like A, oh my gosh, that sounds so challenging and that sounds so emotionally difficult.

But also that it occurs to me that being stubborn or being prideful, these adjectives that we're using about why it's hard to maybe break through to this individual that typically I think those tend to be secondary emotions. Usually fear and insecurity are the more visceral things that are being protected by this decoy emotion of pride and stubborn. So I do wonder if that resonates at all and if there's something there that's actually present for your sibling where the approach that would best address the issue is something that more directly gets at that under the surface emotion of maybe this person is feeling very scared or very alone and so they're puffing up their back. I don't need any help, but if that's the case, trying to convince them, no, you do need help and no, you're bro, you're blowing it. That type of attitude which you might think someone needs because they're very stubborn and prideful is actually the opposite because it's really just protecting this soft chewy center, this caramel center that's like, no, I'm actually really scared and I'm afraid to admit that I don't know what I'm doing.

Henah:

Yeah, that's really poignant. I think whatever they're realistically experiencing involves a lot of shame probably. I know when we did the Rich Girl Roundtable with the couples’ therapist and we asked about one partner having debt and the other one kind of figuring out how to address that bill was like that person on the other end is usually dealing with shame in some way. And so I think you're spot on that it's probably not feeling like they got it and they know that they got it because I don't think they would be in that situation, but more of just how can you go into a conversation if you decide to have one with as much kindness and grace and lack of judgment even as possible. And I think that's a really strong place to start.

Katie:

What was your initial reaction reading the question?

Henah:

Well, I think I've actually shared on the show before that someone did come to me for money help once. And so I was reminded of that experience, and in that scenario someone came to me and asked me because they knew I worked here, what I should do. We looked at everything together, I built the spreadsheet and then I gave them next steps that they should follow. I said, you should consolidate all your debts in a zero interest card and you should X, Y, Z. This is how much you could feasibly save per month to be knocking these things out.

And I don't think they actually did any of those things, and this was probably two years ago now and they've never talked about money since. I think it's still something that because they haven't implemented the steps, maybe they're not willing to talk about it.

And so it reminded me of that analogy of you can take the horse to the water, but you can't force them to drink it. And so it's heartbreaking in the sense that you're trying, you want to give help, but ultimately there's not really much you can do. And I think in this scenario you have limited options here based on how close are you as siblings, what are their boundaries, what are your boundaries in the emotional conversation—because you can either offer to help and how they'll react is basically unknowable, even if you think you know what they might say, it may not be what actually happens. Or you just stay out of it. And I feel like that's also kind of a bummer that feels very helpless.

Katie:

Right. One thing that I was thinking about was it is difficult to force it partially because of someone is not yet at the phase where they are ready or desirous of change, a lack of information is not what they're missing. So giving them information doesn't really change the situation because information is not the gap. The gap is desire and readiness and… one thing that I really like about Ramit Sethi's approach with couples, I know these are siblings, but with couples is that if you're trying to talk to a spouse or a partner about money and it's a gap or if it's an area where you have maybe formerly had tension or that person has maybe a negative relationship with money and you want them to have a positive relationship with money so you can move forward, I really like how he always talks about starting with the end vision, the inspiring end state in mind, so you're not sitting down and being like, Hey, let's talk about how we're going to cut back on all the things that you love and fix your shit.

You're like, Hey, let's talk about our vision for the next five years. Where do we want to live? Do we want to send our kids to private school? Do we want to buy a house? Do we want to take more vacations? Kind of beginning from a place of excitement and generativity versus deprivation and scarcity, and then using that desire as the magnet of like, okay, how do we get there? And I think there might be a potential to implement something similar with a sibling if there is enough closeness in the relationship to be like, Hey, I've been thinking a lot about goals I have, and you want to bounce things off of one another about what we want for our futures.

Henah:

Are you essentially saying this as a Trojan horse solution where you're starting the conversation about something seemingly unrelated to meaningly aspirational for yourself, and then you're able to open it? Or are you saying someone has expressed that they're open to talking about it, but you don't want to start with the negatives?

Katie:

I don't know how open they are. I think that even if they're open, you don't want to start with the negatives. It's a side door. In the best case, even if they're open, you're still approaching it from a position where someone's not going to get their backup immediately or feel of defensive, but if they're not open to it or you're not sure if they're open to it, then it is a Trojan horse. Have you seen that meme where it's like, I receive nothing. Haha, don't worry about it. You receive this lovely wooden horse.

Henah:

Yes, I have seen that. That's actually a really smart way, I think, to approach the situation.

The other idea I had was if you've ever had money issues of your own, maybe you've also had credit card debt in the past or maybe you haven't now you can kind of make it more relatable and show them that this is a safe space for discussion or maybe you guys can tackle this together and find resources. I think it makes it a little bit less like I'm on my high horse, a lot of horse analogies today. You're not sitting on this high horse saying, I'm better than you and I have my money shit together, blah, blah, blah.

I think that might make it a little bit more approachable, but I do think that the calculus feels a little different to me when there's other issues or risks at play. So I would feel morally inclined to say something to show either support or actionable next steps or whatever. If for example, they have dependents who are relying on them if they have severe mental health conditions where worsening debt would put them in an even more precarious position, or maybe they're even at risk of losing their shelter. I think those instances that feels different. I would feel more inclined to say something in that sense and also to know for myself that I've done everything I could to prevent further harm or stress. What do you think?

Katie:

I think that's a really good point. Gauging risk and letting that guide your urgency or lack thereof. There's also this element I feel like is coming through a little bit where in the personal finance bubble, these questions seem so obvious when you're into money stuff and you feel good about it and you don't have blocks to work through or a lot of challenges that you're facing that feel insurmountable. It's like, oh yeah, well, it's easy. You just move this to here and get a 0% card and then you just stop spending money on this stuff. And those things feel so obvious, but there is such an emphasis in personal finance and in the United States on being able to shoulder all of this and manage it all well individually and alone that you should personally have this stuff figured out and that it's some sort of moral failing or reflects negatively on your competency if you don't.

I keep getting this sense of sometimes I think people in these situations that may seem reticent to accept help, it's like they need more community support that might not on the surface appear as though it's money related, but might help them get to a place where then they feel like they're capable of even thinking about it or addressing it. So I think that's kind of generic, but—

Henah:

It’s kind of like health.

Katie:

Yeah, I just am imagining how it would feel to be really deep in debt and to feel like there's no way out and to then also just be dealing with the other things that go wrong in life. And it's like when you feel like you have a community that's there for you, or sometimes I think just being there for that person in other ways like, oh, your car broke down. Let me give you a ride today. Oh, hey, come over for dinner tonight and hang out. Being there for them in other ways or lightning, their load in other ways might actually free up the mental bandwidth that they need to address these things. And so they might not need you for the money advice. They might just need support in other ways that then you are giving them indirectly you're helping them with this.

Henah:

Well, it reminds me too of we had Gabe Dunn on the show and they said, when you're already dealing with one bad thing, they tend to compound and then it tends to worsen very quickly, snowball. And I think that's usually the situation a lot of folks are in, which is they didn't mean to get into debt, they weren't being frivolous on purpose. It's usually this thing that just snowballed.

And I think your suggestion is great because if they're unwilling to have the conversation or accept help, I would then ask myself, what can I do to not make their situation worse? So your idea of let me give you a ride or come over for dinner. I don't think you have to say, I'm trying to save you from spending more money, but you could say, Hey, how about we spend quality time together for my birthday this year? That's really the thing that I wanted the most. Stuff like that where you're not worsening their situation by any means.

Katie:

I also think that if depending on the relationship, I could also see a position where I could imagine saying something like, Hey, privately one-on-one. I can imagine how overwhelming it might feel to be dealing with student loan debt and credit card debt at the same time. And I know that can be very isolating. If you ever want another person to kick around payoff plans with or to workshop how to attack this debt, I got you and let's sit down and do it. I think it would be, I'm on your team and I want you to know that, and I'll help you figure this out if you're feeling some type of way about it.

And if the debt is an unspoken thing where even bringing it up that head on would maybe cause some issues, maybe not, but depending on how much it's already out in the open. I don't know. I think maybe simple show of support or just the offer of, I'll help you make a plan and help you stick to it. I could see that going a really long way. I think sometimes people just don't know where to start, and so it feels so insurmountable and so isolating that you just don't want to even look at it.

Henah:

Yeah, I had written there are some options if they are willing to accept help, and that was one of them, which is you sit down and do it together and you kind of walk them through best practices as long as you feel equipped and they're willing to share. If you don't feel that way, please don't give financial advice.

Katie:

Let us give unqualified financial—you should just send them The Money with Katie Show, send them this episode. I'm just kidding. Just start blasting them with links to The Money with Katie Show, no context.

Henah:

Just no context, nothing written on top of it.

The other option is you can show them vetted resources of people who can help them do this. There's usually some psychological stuff that you want to unpack about the situation and any money, trauma. So maybe that's while they're going through it that you want to find them a counselor that they can talk to or after they've gotten through it, but you just want to make sure that they don't go right back into the same situation if that's something that they've expressed concern about. And also because we've talked about this, usually debt is not debt for debt's sake. It's usually there's something else at play there. So there's that. And then we did a Rich Girl Roundup, I think it was our second one ever about lending. Maybe it was our first one ever.

Katie:

Oh, the lending money to friends. Yeah.

Henah:

I mean, so you could offer to gift them some cash to help if they feel like they need it, but I wouldn't expect to see the money or you'd have to have some sort of conversation about strings attached to that. But I mean, I don't know much about this. Maybe you do, Katie. I guess they could explore bankruptcy and other legal alternatives if it feels like it's too overwhelming. Is that an option?

Katie:

Yeah, depending on how, I mean talking to a bankruptcy lawyer, if it seems like, okay, this is actually insurmountable, this hole is never going to get any, usually it's not that bad. I think usually people find themselves in these situations and just with a year or two of effort can dig back out the offering to supply a counselor, the certified financial professional who's also a certified financial therapist, kind of double whammy like Bill Nelson was finding someone and almost offering like, Hey, I would love to gift you this if you think that that would be useful to you or helpful if you're interested in figuring this out. And you would like some professional help. Because sometimes maybe you're the younger sibling and your older sibling feels weird about taking advice from you even though you're adults. And there's some weird dynamics there, even just if you're in the position to do so. I'll gift you the session or two with the planners that you can start making a debt payoff plan. But yeah, I think bankruptcy is something that then a professional could recommend, and then you're not the one being like, yo, chapter 11.

Henah:

100%. There are instances in which however you approach it will come across patronizing. So I think it's most important to figure out the script of what you'd want to say and how you'd want to say it based on how you think your sibling would react.

I am part of several Facebook groups where people will talk about money and usually people will say, I have an insane amount of debt, and then someone will ask how much it is and it's $10,000, $20,000. And it's not that that's nothing. That's obviously a nice chunk of change, but I think to your point, it is something that with a year or two of concerted effort they could get out of. And so I think being able to understand what is the scale of the debt and helping them to even walk back from the ledge if it feels to them that it is insurmountable and it maybe it's not, could also be useful.

Katie:

Yeah, absolutely.

So that is all for this week's Rich Girl Roundup. Dear listener, if you end up moving forward with any of this, please reach back out and tell us how it goes. It would be nice to be able to give an update if you're comfortable, but otherwise we will see you on Wednesday to talk about women's economic domination.