The nationwide economic downturn caused so many people to have at least some amount of personal difficulties in dealing with their finances that most Americans know one or two people who struggled during the recession, and even after it ended. In fact, some may still be dealing with the fallout to this day.
You probably know at least a few people for whom the recession caused significant financial problems, and in some cases the effects may linger now. Whether those can be considered their fault, necessarily, is obviously going to vary on a case-by-case basis, but it's very likely that at least one of your friends or family members is still having serious money issues that can be having a massive negative impact on their entire lives.
"It's tricky to know when and how to intervene," Dr. Irene Levine, a professor of psychiatry at New York University, recently told Daily Finance. "But when a close friend is undermining her own success with a pattern of poor financial decisions, you would want to let the person know. This is no different than helping a friend face a problem with drugs or alcohol."
While the prospect of bringing up money management issues with someone else might be uncomfortable, in some cases, those who are still trying to get their finances in order might need a little urging to take the time to figure out how they can best go about tackling this rather dire issue.
When should you get involved?
If you have a friend or family member who is constantly worried about their finances, or complaining about their ability to pay various bills, that's usually a pretty good indicator that they're out of their depth when it comes to their ability to handle themselves fiscally. And while it's not always a good idea to become confrontational about it, you might want to figure out other ways to discuss the best methods to get debt under control, increase savings, and get a bad credit score built back up to respectability once again.
The odds are that, at some point in his or her life, this loved one had a pretty good handle on his or her credit and finances. Whether it was low debts or a decent amount put into savings, very few people have always been in significant trouble in this way. As a consequence, you might be able to find a little bit of success in getting him or her to remember what was being done right in those better times. For example, perhaps when that person didn't have a load of credit card debt, that was because those accounts were being used only for emergencies, and not for everyday purchases that led to balances growing quickly. Along the same lines, a diminished credit score is often the result of missed payments, and thus if this person has fallen behind on a few deadlines, a little nudging can get him or her to make sure all bills are paid on time and in full.
Be informed going in
Of course, this person might not listen to you, or at least take what you say very seriously, if you don't sound like you know what you're talking about, and therefore it could be wise to do a little studying before you have this mini-intervention. For example, knowing what factors are most important when determining a credit score (payment history and the total amount owed as a percentage of account maximums) and the best ways to get debt under control (larger monthly payments and discontinued spending) can give you the kind of authority that will give your words of encouragement added weight.
It is, however, important to remember that you should only try to be encouraging at this time. If you use language that isn't all that nice, or if you are appalled at the situation this person has gotten him or herself into, then your criticism might not be viewed as constructive, and therefore could prompt that person to disregard what you have to say. Being as caring as possible in explaining the ins and outs of properly managing a person's accounts can go a long way toward getting him or her on the path back to financial success.
At this time, it is also important to remind your loved one that taking the time to order copies of his or her credit reports will be vital to ensuring ongoing success even after doing what is necessary to run that initial repair work. Doing so may also help this person identify any potentially unfair markings which may be marring what should now be a healthier standing. Working with a credit repair company in the event that this type of entry is discovered may help to put things to rights more expediently.