Meet Frank. Frank doesn’t have a picture, because he doesn’t exist.
Frank is your friend, and he’s terrible with his money. He smokes, gambles, drinks and eats out practically nightly. He’s got an expensive car and does his best to impress the ladies by throwing around the cash. He spends too much money and then when it runs out, he just cracks out his credit card. He’s slowly drowning in a pool of debt, and he’s not slowing down anytime soon. Frank is the antithesis of most everybody who regularly reads this site.
Because Frank is a good guy, you decide you’re going to help Frank get his finances back in order. So you sit down with him, over an adult beverage at your place (because that’s cheaper than going to the bar and you’re frugal) and you tell him your plan. If you can cut a mere $500 per month from Frank’s extravagant lifestyle, he could pay off his debt soon and start saving for retirement. If Frank could find a way to cut his expenses $1000 per month, he would be well on his way to financial independence and early retirement.
As you lay out your plan, Frank quietly nods in agreement. He’s no idiot, he can see the merits of your plan. You two part agreeing that Frank can easily get his finances in order, all it’s going to take is some hard work.
A few weeks later, you and Frank meet up again. How’s his progress?
Frank has accomplished nothing.
Why Can’t People Change Their Habits?
There are all sorts of reasons why people spend too much money. They might be trying to impress people. They might be overcompensating for something. They might not be very good at math. There are a thousand psychological reasons to explain why a lot of people aren’t good with their money. But we don’t care about any of that, because I can sum up why a lot of people suck at money in one sentence.
It’s because they don’t care.
Going back to our imaginary friend Frank, it’s not that he doesn’t care about money. Of course he does, and of course he would like to have more of it. It’s just he doesn’t care enough about getting ahead. He’d rather have nice things now than wait and have them in the future. He’d rather have a nice car than a fully funded retirement account. It’s not that Frank is stupid, it’s just that Frank is shortsighted.
How many real life Franks do you have in your life? And how do you help them?
Stop Giving Unsolicited Advice
A little over a year ago, I was unsatisfied with my weight. I ballooned to 270lbs, which is pretty heavy even for a tall guy like me. (I’m 6’3) I decided that I was going to lose it, so I started working out and eating better. Slowly, the weight started melting off. Eventually, I reached my goal weight, and today I am a comfortable 215lbs. I like to refer to myself as a recovering fat man.
When I was losing weight, guess how many people had an opinion on what I should do to accelerate the process? Everybody. As soon as someone found out, they dug some useless nugget from the back of their grey matter and tried to apply it to my situation. Out of the hundreds of people who gave my weight loss tips, I probably listened to two people. I didn’t care about everyone else’s advice because I didn’t ask for it.
When you sit down your friend and tell him that you can turn around his finances, you’re committing the exact same sin. He doesn’t care what you have to say about his situation. And because he doesn’t care, he’s not going to take your advice. You might as well talk to a piece of french toast.
Change Starts From Within
Your friends are not going to change their habits until they get a good reason to. You know how a druggie has to hit rock bottom before they’ll put down the crack pipe? The same principle applies to finances. Maybe they won’t hit rock bottom, but something will happen that’ll shock them into change. That traumatic event isn’t going to be your gentle nagging, no matter how good your intentions.
The impetus for any good journey starts from within. Until somebody decides to take the steps necessary, nudging them in the right direction is useless. Nobody wants your unsolicited advice. In fact, you may be doing more harm than good by continuing to give it out.
Thoughts? How much PF advice do you provide without being asked? Do you think others really listen to you?