We all have friends who struggle to manage their money wisely. Telling them that they are irresponsible, need to pay down their debt, create a budget, and/or find ways to spend less on frivolous goods isn’t going to work.

Ask yourself how you would respond if a friend in better financial standing told you what it takes to manage money. You probably wouldn’t take it well. And generally, I don’t want to be told what I’m doing wrong, especially if I didn’t ask.
In many situations, our purpose in starting a conversation is to get the other person to change their point of view or behavior. There is nothing wrong with hoping for change, as the urge to change others is nearly universal, but it generally fails.

Trying to change someone rarely works because we are more likely to argue with and attack their story, and less likely to listen to their perspective. This approach increases the likelihood that they will feel defensive rather than open to learning something new.

Though young adults are more open to discussing topics that generations past would refrain from, personal finance remains a touchy one. While some people are willing to discuss it in depth, others will push back. If you have a friend whose finances you are concerned about, be cautious when you raise the topic. Creating a space for your friend to open up may not kick start a conversation right away, but your friend will know that you’re interested in their personal well being and willing to talk.

If a conversation does ensue, here are few things to consider:

Listen. Avoid telling and focus on listening. Make your friend comfortable, and ease him/her into talking about their situation.

Ask questions. Gather as much info as you can before you start giving advice.

You are not the answer to their financial problems. Loaning friends money or bailing them out of debt can often cause problems in the relationship later on. Rather, offer help in exploring the root problems (which might be be a denial of present finances, limited income, too many credit cards, etc.), and focus on what THEY can do to get out of it.

If you end up lending a friend money, it should be done in a professional fashion. There should be a written agreement and terms should be clear. If no written documents are created, you may find yourself with your own set of financial issues.

Recommend and become a trusted source of information. Provide your friend with reliable information (e.g. Qvisory). Once you become trusted, your friend might want to talk with you before making big financial decisions, and it is possible you can save them from making a big mistake.

Let go. Some people say that you should not care what your friends do with their own money because it’s not your business. Having good friends is more important than having a lot of money, but hanging out with people who have financial problems can be stressful. If your friend in dire circumstances chooses not to take your advice seriously and you are starting to get frustrated, step back, and stop talking about money. Ultimately, only your friend can mange his/her own money, as you manage your own.