• What’s The BEST Financial Advice I Can Give?

    Posted on April 24, 2012 by in Emotions, Power, Psychology, Relationships

    I often get asked, “What’s the best financial advice you can give someone?”

    When I’m asked this question, I’ve noticed- over the past few months- the answer comes out involuntarily…

    NONE!

    No, I’m not kidding. The best financial advice you can give is none at all. Even when it seems like someone is asking for advice about money, what they’re really asking for are ideas, options and perspective. They’re looking for you to point out things they haven’t seen or thought of yet.

    Most people don’t want (or like) to be told what to do.

    Think about this point for a moment. What happens when someone gives you advice? Do you actually follow it? Probably not. You might be polite and thank them for it. But chances are, once you walk away, you roll your eyes, make snide comments under your breath or, at the very least, regret saying anything to them in the first place.

    When someone is dealing with a financial conflict (or any kind of difficult situation), the last thing they need is advice. Advice is what’s known as a Communication Blocker.

    People avoid telling others about financial problems because they’re afraid of being:

    • Judged For Their Actions (losing social or professional standing)
    • Diagnosed With A Problem (psychological labels)
    • Forced To Defend Themselves (bombarded with “why” questions)
    • Told Their Problem Isn’t A Big Deal (minimizing their feelings)

    These are all Communication Blockers which stall productive communication and positive action. Although the other person may have their best interests at heart, it is not perceived as a positive interaction by the individual with the problem.

    The moment someone tells them what to do or gives them instructions on what they should do- they disengage or shut down.

    The best option is to give knowledge instead of advice. Help them come up with several different options and let them make a decision.

    Rather than tell them what to do- share a personal story or experience from a similar situation in your life. Explain what you learned and what you did to make things better. Tell them how you felt and how you dealt with those feelings. Don’t make it seem like your experience was worse or more important- make the situations as similar and equal as possible.

    You can also provide potential resources for them to use. Point them to websites, books or other people who might be able to offer some insight.

    By working with them to come up with several different options and choices, you’re still assisting them with their problem. However, you’re letting them decide what to do and when to do it. You’re giving them independence, power and control over their decisions.

    Think of it this way- they’re asking you for directions to get somewhere. Instead of telling them to take the path you always take to get there, you show them a map with several different routes. You might not like to take the road through the forest because you’re allergic to the tree pollen, but that doesn’t mean they are too. They might enjoy the scenery. Let them decide.

    Do you like to receive financial advice or do you normally ignore it? What kind of financial advice have you given to others? Did they take your advice or ignore it?

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17 Responses so far.

  1. […] @ Financial Conflict Coach presents What’s The BEST Financial Advice I Can Give?   – “When someone asks for financial advice, is that really what they’re asking […]

  2. Jeremiah says:

    I like the idea of telling a story as a way to share perspective. Doing so helps to convey why you think/believe what you do opposed to it seeming arbitrary. I know when I am giving financial advice to someone close to me, such as a family member, it always comes across more gently when I convey my thoughts based on an experience I have had in the past.

  3. [...] What’s The BEST Financial Advice I Can Give? (Best): When someone talks to you about their money problems and asks you for financial advice, is that really what they’re asking for? In my experience, they’re actually asking you for something else- they’re asking you to give them options they haven’t thought of yet.  [...]

  4. [...] @ Financial Conflict Coach writes What’s The BEST Financial Advice I Can Give? – When someone asks for financial advice, is that what they’re really asking for? In my [...]

  5. [...] @ Financial Conflict Coach presents What’s The BEST Financial Advice I Can Give?   – “When someone asks for financial advice, is that really what they’re asking [...]

  6. [...] worth it. Find out why I am investing in real estate.Dave @ Financial Conflict Coach writes What’s The BEST Financial Advice I Can Give? – When someone asks for financial advice, is that really what they’re asking for? In my [...]

  7. [...] to collect rain water and reduce your water usage costs.Dave @ Financial Conflict Coach writes What’s The BEST Financial Advice I Can Give? – When someone asks for financial advice, is that what they’re really asking for? In my [...]

  8. [...] Dave presents What’s The BEST Financial Advice I Can Give? posted at Financial Conflict Coach, saying, “When someone asks for financial advice, is that really what they’re asking for? In my experience, they’re really asking for something else- options. [...]

  9. Dr Dean says:

    As someone who is paid to give advice every day, (medical, not financial) your suggestions are dead on. Most want validation. When faced with a morbidly obese patient, it’s difficult to say “you’re doing great!” with a straight face. But if you say they are eating too much and are too fat, they will shut down and not listen to a word you say.

    Stories, suggestions and alternatives work much better!

    • That’s why weight loss program success stories (like Jared from Subway) work so well. If the host/announcer just looked into the camera and said “you’re fat, do this and you won’t be” no one would buy the product/program.

      Thanks for the comment!

  10. WorkSaveLive says:

    I came over from The Free Financial Advisor (AverageJoe).

    I think you’re right on with you assessments. I’m a financial advisor and Dave Ramsey counselor and I agree with you completely.

    Some people do want you to tell them EXACTLY what to do, but others just need to be educated. The more knowledge they have the more likely they’re going to make the best decision for them.

    • Thanks for visiting! AverageJoe was very kind to include me in that post this week.

      While there are always exceptions to generalities & “rules of thumb”, most of us are rather predictable.

      I sometimes think “personal finance” should be changed to “me too finance”. You gravitate towards blogs/books/media you can relate to. Clustering can be beneficial but, at some point, you have to make your own decision.

      Again, thanks for visiting & for the comment.

  11. [...] This week’s quote should be “new guy gets it done!” because a new-to-me blog called Financial Conflict Coach has written a piece I’ve fallen in love with entitled: What’s the Best Financial Advice I Can Give? [...]

  12. AverageJoe says:

    This is always frustrating for me. Because the VAST majority of people are as above, I completely feel “different” here. Because of several incidences when I was younger, I enjoy someone telling me exactly what they’re thinking and giving me advice. I love to hear how I can make improvements and seek out people who will do this for me. I would love to have a full-time Simon Cowell or Gordon Ramsay on my team.

    They’re so, so hard to find, though because people tiptoe through advice-giving because (as you eloquently stated) most people shut down and don’t hear it.

    My own financial advice has been widely taken by others. I think it’s because it’s proven to work in the past. I get into trouble if I try to give advice in areas where I’m not an expert.

    • I, too, feel “different” because I am known for telling people the brutal, honest truth. I always hoped for reciprocity, but too many people are afraid of hurting your feelings or insulting you. They hold back.

      If I screw up, I want someone to say so. Or at least say something BEFORE I screw up.

      I just couldn’t understand why everyone wasn’t like me. That’s part of the reason I studied dispute resolution- to learn how others react in difficult, stressful and awkward situations. It’s completely changed the way I interact with other people.

      I am still brutally honest, but I learned to frame it in a way that doesn’t seem quite harsh. Of course, I’m human and still revert occasionally. But I am able to recognize what I’m doing faster & adapt as needed.

      Thanks for the comment!

  13. I think this goes for home improvement advice, too. As a blue collar guy, I always size up people’s homes and think of things they could fix or make more efficient. I’m always eyeing the work of the guy they hired to do something. But I’ve learned that people DONT want my advice on that stuff unless they actually ask!

    • TB,

      Thanks for the comment!

      Advice is difficult to give and, in a lot of instances, even more difficult for most people to receive- no matter the subject.

      I’ve also observed that even when they ask for “advice”- some people are really looking for approval and acceptance for what they’ve already done.

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