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Personal Finance Round-Up: What To Do When Your Friends Ask You For Financial Advice

By Money Crashers

Money Crashers has been around for about four years now, so all of my close friends and family know about my passion for personal finance, and I get quite a few questions from close friends and family about their own finances.  I really don’t mind helping the ones closest to me.  Most of the “advice” that I give is common sense, and I don’t get too technical with my recommendations, because I’m not licensed properly to give certain financial advice.  Flexo, from Consumerism Commentary, recently ran an article about how to handle requests for financial advice. I really liked his advice about being careful to jump into financial conversations with acquaintances such as co-workers, and I also liked that he advised not to lend money to friends or family to solve their financial problems, because usually the problem isn’t money.  The problem is the decisions they make and the bad financial habits they’ve formed.  If you’ve never checked out Consumerism Commentary, it’s one of the top personal finance sites that I’ve been following since 2006.

Other great articles to check out from the past week:

  • Make and Save Money By Getting Rid Of Your Junk. I am a huge proponent of not being a pack rat.  My wife and I use the rule of thumb that if we haven’t needed it or thought about it in the past year, then we obviously don’t need it.  Depending on what it is, we’ll either sell it or give it away. [Free Money Finance]
  • When Will I Get My Tax Refund and What If The Check Amount Is Wrong? These are questions we all have during tax time! [Five Cent Nickel]
  • The Art of Saying “No”. I am the worst at saying “no” to people, because I am a people pleaser, but sometimes my time is too valuable, and I end up doing things that I shouldn’t get involved in. I also need to learn to say “no” to myself when I see a new gadget that I really like! [Frugal Dad]
  • How To Turn Your Failures Into Opportunities. Over the past few years, I’ve trained myself to become less fearful of failure. If I give everything, but I still fail, I can learn a lot from that experience. This article does a good job at teaching you how to turn those failures into opportunities. [Christian PF]
  • 16 Things Your Lawyer Won’t Tell You. It’s so easy to be charged too much from a lawyer, and you need to treat their services like you would any other purchase. This article will equip you with some information to help you save money when in need of an attorney. [Wisebread]
  • 8 Tips For Protecting Your Credit Information While Shopping Online. I don’t think about this stuff enough, so I thought I would share it with you all. [Gen X Finance]

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Comments

  • http://madsaver.com Mac

    Completely agree. Not lending money to friends or family is huge…especially if there’s any chance that the lendee cannot pay back in a timely matter. It could literally drive two people apart. Much safer to help in other, non-monetary ways.

  • http://www.consumerismcommentary.com/ Flexo

    Thanks for the shout-out, Erik!

  • Emily D.

    The financial advice for friends had a lot of solid ideas in it. I usually will offer up what I do personally but make it clear that it’s not necessarily the best thing to do (though hopefully it is). And never loan any money to friends or family unless you’re okay with never seeing that money again. I have quite a few friends who have made loans to “good” friends with money that they then suddenly needed back or without making clear expectations for paying back and interest… needless to say most of those relationships are no more.

    • http://madsaver.com Mac

      No doubt. My wife once loaned her ex $500 two separate times. How much did she get back? Nada. She tried for years after the relationship to get the money back, but since she did a poor job in documenting it, there is no chance. What a waste.

      • Karmella

        I wish I could say I’ve never done that, but I have. Even though I went in thinking I wasn’t expecting to really get it back, I really did. Lesson learned, I hope.

  • http://moneycrashers.com Cynthia S.

    As a general rule I don’t lend to friends and family, and my siblings sometimes will only lend money to close family members only.I once lent money to a friend (so I thought was a friend) go to a trade school with me.I heard promise after promise that she would pay me from her next paycheck.She owed $90.25 before we graduated from the trade school. Every time she sees me she avoids me even hides so I won’t see her. If we meet, she is very uncomfortable”says nice to see you, but I’m in a rush for time.” What a hard lessen and a hardship it created for me.
    Now I am disabled,the car I drive is 25 y.o. 160,000 miles needs some repair. I don’t want to sink anymore money into the car.I can’t get a loan from anywhere/anyone because I’m on SS and live on a fixed income of a few hundred dollars but can afford a car payment. I don’t have good credit as I use to have because my husband obtained credit cards with me being a co-signer;he sits in an out-of-state prison. When my husband was released,worked two jobs,the payments fell upon me. Then he was taken into custody and didnot violate his parole serving more time currently.I quit paying on the credit cards he signed my name as co-signer.
    Being on Disability,I can pay my own small accounts faithfully every month.My car was running like a charm-now my car constantly stalls because my husband made a few bad decisions trusting people.One decision was to bring my car to a repair garage,fix the main oil seal–front drive shaft. The garage replaced the NEW sparkplugs I gapped and installed myself a month before. I’ve been maintaining my own car with my husband being in prison for many years. Well, my husband told the garage to do a tune-up. I specifically told him “do not change the timing,It’s perfect. Car isn’t driveable-constant stalling,no garage will change timing-”timing is factory set on the 1985 Mercury-Cougar.Not true. I need to buy a reliable-used car.No family member will help me nor will any dealer,bank, credit union,etc. So how am I to get to Doctors appts that are in different areas.PVTA says I don’t qualify to ride their vans. I have MRSA Bacterial Blood Circulating through out entire body.I had part of left-foot amputated with metatarsal bone removed due to the spread of bacteria.My foot is painful,limp on foot with a crutch?I should have died,that’s what the doctor told me a week later in the hospital! What is a woman to do?Hitch-hike a ride from total strangers to go food shopping,visit elderly mother,doctors appts,go to pharmacy for prescriptions, visit family? I was ill in 1981 and I paid off my NEW car at that time with assistance from the Welfare Dept until I received my first Soc. Sec. Disability money.Rent and car payment got paid first, then medical dr’s.I Need A Good Used Car that will last me many years,like my 1985 Cougar I bought in 1995,65,000 miles. I kept my car clean and polished it twice a years.Recently I had to cut sheetmetal and pop rivet the rusted spots to pass inspection. Why wouldn’t SOMEBODY help a responsible woman to purchase a reliable car to last me many years???

  • http://ChristianPF.com ChristianPF

    Thanks for the include Erik!

  • Winston C

    Oftentimes, money is the cause in many failed relationship. That’s why I hate talking about money in any way with my friends. I will only lend money to my best friends, and of course close relatives too. I had a friend in high school who often asked me for loan. Since the money was relatively small (less than 10), I always gave it to him. And he never returned them. After a while, I got tired of it and ditched him.

  • Elizabeth I

    I think it is often best to live below your means, thus, if you aren’t flashy, people won’t ask you for money. I do not recommend loaning money to anyone, always consider it a gift. This way you will never be angry if it is not returned to you.

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