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Advice for My Friend, The Financial Disaster


Recently, a very dear friend began to confide in me about her financial situation. Over the course of the past few months, I had begun piecing together that things weren’t going so well for her, but I had no idea just how bad it was until she slowly started to talk about the numbers. Before I continue, I must say that I’m in no way passing an ounce of judgement on my friend–especially because I’ve been in financial dire straits in the past and I know how hard it can be to make ends meet when there’s much of nothing coming in.

Sharing is Caring

I share a bit of her story and what we’ve discussed because I’m genuinely interested in hearing your advice for her–and I know firsthand that reading about someone whose financial situation is different than yours is a fantastic way to entice you to look over your own budget, spending, and saving habits. I also have to admit that I’ve wanted to write about this on my own blog, but I haven’t had the heart to lest she finds the post and clams up now that we’re making some serious progress in helping her through this latest chapter of hardship.

This story is being shared in the spirit of helping; not embarrassing, judging, or shaming.

Head in the Sand, Credit Card in Hand

One of the biggest issues my friend is struggling with is her inability to manage her spending. A while back, she lost her full-time job for a variety of reasons. In the months that followed, she continued to spend as she had while still working–pricey dinners out, new clothes when she wanted them, expensive hair cuts and colors, etc.

I could see that she was clearly depressed and in denial about her situation, but I didn’t have the heart to say anything because I didn’t want to alienate her. Instead, I pushed frugal ideas such as cooking at home (I bought the groceries and wine and had her come over) and exercising as a way to socialize. This worked well, except for the times we weren’t together (which is every day of the week minus one!).

I’m not sure reality hit her for months until one day when she found herself unable to make the minimum payment on her credit card (and with zero dollars to give her roommate for her share of the month’s utilities).

Borrowing…from Friends

It was on this evening that she decided to fill me in on the details of her struggles…and the picture she painted was far from pretty. But what struck me the most was that she was sharing because she wanted me to give her money. And she had already collected money from a few of our other friends. While I wanted desperately to help her, I have a strict ‘no money to friends’ policy–I won’t lend a dime because I don’t want the friendship to be marred in money issues (and I won’t give unless it’s to charity because I’ve seen in the past how it becomes a crutch).

However, what I will do is offer food, shelter, transportation; even the clothes off my back if the situation warrants it.

A Cold Dose of Reality

Explaining this to her was not easy, especially while we had discussed how well my new freelancing efforts were going the night before. However, it seemed to be exactly what both of us needed–a wake up call for her that she needed to get a handle on her situation and a way for me to help her without enabling any negative behaviors. Moving on from that night, we’ve since discussed a new budget for her (she set it up the following evening after we talked) and I shared some of the things I did to pull myself out of my own financial abyss years ago.

While I know her future is bright, there are a ton of difficult steps in front of her. I’m here with her every step of the way, and I’d love to hear what advice you have for her so please leave a comment about your tips/ideas for getting out of debt, reducing spending, managing a budget….all of the above!

This post was written by Jen, a staff writer from The Happy Homeowner



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. You have a good policy and you are very generous to help your friend. Does your friend ‘see’ the path she needs to take now for getting out of debt? Does she have plans to save now?

    • Thank you, Theresa! I do believe she is on the correct path, but I think there are still going to be some tough decisions and conversations ahead of her. I really hope this is the beginning of permanent change though!!

  2. Here biggest hurdle will be changing her own spending, as you well know.
    She cannot stray from her budget for the next 1-3 years until she gets her spending under control, and if possible increase her income through part time work, etc.
    She should also know that she can make it through this with comfort and help from her very kind friend Jen. 🙂
    Maybe knowing that other people are in her situation, or have been in the past (such as yourself), can help her to understand that it isn’t the end of the world, but merely a transition in the sometimes rocky waters of life.

    I agree about lending money to friends or family. I may call it “lending”, but I will not feel an ounce of grief if they don’t return the money.

    • “Here” in the first sentence should have been “Her”. I’m getting terrible with my self spelling and grammer checking nowadays. LOL

      • Haha…no worries!

        Yeah, I agree completely w what you’ve said–she’s going to have to make a permanent commitment, not a temporary effort. I think the reason she opened up to me in the first place is because I sensed what was happening and shared my own past blunders with her–hearing how much I’ve changed gives her some hope that she can too. But the beauty is that I’m being brutally honest since we are such good friends–no sugar coating here!! 🙂

  3. I think you made the right move by not lending her Monet. Hopefully that is enough of a wake up call for her to start moving in the right direction.

    • Thanks, lance! I’m hopeful this will be the beginning of serious change for her

  4. I have a policy to not lend money to friends. I have lend money before, and it was not good.

    I only give money to my mom, but I consider that a gift, completely different.

    • I really think it’s the best policy. I’ve seen it too many times in the past where mixing money and friends is a recipe for disaster!

  5. I’m not sure why people keep spending when they lose a job. I guess they assume another one will come along? We watched my in-laws continue to spend when they both lost jobs. It was painful. We didn’t offer them money, and they never asked, but another relative did give them a pretty big amount, which was blown through pretty quickly. Eventually they lost their house and had to move into a tiny rental. It was a real shock, but they live within their means now, and it was wake up to us to get our finances on track. I hope everything works out for your friend.

    • Wow…so sorry to hear of what happened with your in-laws! Unfortunately, it sometimes takes extreme measures for people to make permanent changes. Happy to hear they’re doing much better now!

      I think my friend has a long way to go, but I’m hopeful that these initial steps she’s taking are the ones to get her on track for the long haul. Only time will tell!

  6. I think you totally made the right call Jen. We have a similar policy ourselves and would only do it if they absolutely needed it and we would only give it without expectation of it being paid back. But, I’d still be hard pressed to do it. That said, I think the biggest issue will be overcoming that spending problem. I know it was for me and it just came down to me cutting up those cards and go cold turkey. I know it sucks, but I had to take drastic measures.

    • I hope that she understands what cold turkey really means, but I suspect there are still hurdles to get through–ideally she’ll see the light sooner than later because I think she’s smart enough to get it together once she has her final wake-up call!

      I agree about the notion of just giving the money without expectation of payback, but I won’t give dollars because I feel it’s too much of a crutch.

  7. When it comes to financies often people think the only way they can help their friends is by loaning them money but there are so many other things you can do. You’ve already helped her by explaining your past situation and letting her know there are other ways, such as freelancing, to increase income. It wouldn’t be a permanent fix but maybe she could take some of those clothes she spent her money on and sell them to pay off a smaller debt. You could help her sell them or just continue to show her how to cook different meals at home is a great help. She needs to focus more on friends like you who are willing to do things at home together instead of going out to eat or expensive events. I think it will help her to know there will still be ups and downs but in time the changes get easier.

    • Yes! I agree!! Money is only one piece of what we can do for our friends and loved ones when they’re struggling financially. I really hope she can make the necessary changes, and I’m happy to help her as much as I can each step of the way without giving money!!

  8. Good for you with sticking to your plans. You’re probably helping your friend much more with knowledge than you ever would with money.

    I know someone who, once she confronted her spending issues, got a part-time job (on top of her full-time job). It got tiring for her, but the jobs were different enough that she got variety. Working all the time meant she didn’t shop much either. It was a crazy decision, but it worked for her!

    • I love the idea of more work because it was what helped me make some changes when I needed to most (at one point, I had 7 jobs in the mix but I realize how extreme and crazy that is…haha!). I suggested this to her and she did say it was something she’d consider, so hopefully she’ll make a serious effort to attack this from both sides–cut spending AND bring in more. Fingers are crossed and support is at the ready! 🙂

  9. You’re right – being honest with herself would be the first step. Even this may come in small increments, though, which is OK.

    • Definitely–this is going to take time so small, manageable steps are key!

  10. I think you did the right thing in helping you friend begin to change her poor financial habits instead of enabling them by simply giving her more money. I hope that she understands the wisdom in that and listens to your advice!

    • Thanks, Anton–I hope so, too! I’m looking forward to checking in with her this week to see how things are going

  11. I had my own wake up call earlier this year when I was told I would be furloughed for up to 22 days. (I work for the DOD) Took a long hard look at my finances and realized I was way over spending. Trying to get back on track as we speak. First thing I did though was to lock the credit cards in the filing cabinets. No more spending what I don’t have.

    • Sorry to hear about the furloughs! Kudos to you for being proactive about how they will impact your budget…that’s a great step in the right direction!!

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