How to Give Financial Advice People Will Actually Follow
Money advice, when unsolicited, often goes unheeded – much like an unwanted fruitcake. Yet, those financially savvy often feel compelled to help struggling friends and family, especially remembering how timely financial advice once helped them.
Drawing from neuropsychologist Moira Somers' expertise in her book "Advice That Sticks," here are effective ways to offer financial guidance:
Ensure Receptiveness Before offering advice, confirm the person wants it. A gentle approach works best: "I've noticed your struggles and have some ideas that might help. Would you like to hear them?"
Use Supportive Language Avoid shame or blame – these tactics rarely motivate positive change. Instead, offer warmth and empathy. Everyone makes financial mistakes, so approach conversations with understanding and encouragement.
Break Down Barriers Financial problems often paralyze people with overwhelming complexity. Ask questions to understand their specific challenges: "What makes this difficult for you?" Then break solutions into manageable steps.
For example, help overspenders by:
- First turning off one-click ordering
- Then setting up online banking access
- Finally implementing daily transaction reviews
Provide Active Support Consider offering practical assistance:
- Accompany them to meet with financial professionals
- Help set up appointments with credit counselors
- Connect them with qualified financial advisors
Sometimes, the best help is directing someone to professional guidance. People may be more receptive to advice from neutral third parties than from friends or family members.
Remember that effective financial advice requires the right approach, timing, and delivery. Focus on being supportive while respecting boundaries and personal choice.