This guest post is by Mr. Broke Professional: the husband in the husband/wife team behind Brokeprofessionals.com.
Go on, you can admit it. Sometimes you feel just a tiny little bit superior. Not in a “I’m so great, maybe even borderline perfect” kind of way,” but in a “I’m so reasonable”, and/or “why don’t other people actively track and manage their finances like I do,” sort of way.
Why it is Sometimes Tough for Personal Finance Devotees to Properly Communicate with Others
You are frugal and informed. You are working hard towards financial security. Sometimes it is easy to feel a little superior. To perhaps scoff a little at those who do not know the difference between a traditional IRA and a roth IRA. To maybe even feel a slight bit of schadenfreude when a friend asks to borrow money from you when their car needs a repair, or the like. “Oh silly (insert name here),” you think. “You have to get your finances in order! If that happened to me, I would just tap into my emergency fund!”
At the same time it is not really schadenfreude, because all you really want deep down is for other people to do well. You want them to make the “right” choices. The problem is, if you have even the slightest air of snobbery about your “lessons,” then you will never be able to impart even a tiny fraction of your great knowledge. Whether you are trying to tell a friend that dollar cost averaging into a diversified index fund may be the best investment or attempting to get your spouse or loved one to start budgeting their money, people are going to likely be resistant to your perhaps unwanted offers of help.
If you are reading this site, then you are either a personal finance blogger yourself, or you read and/or are interested in personal finance. If so, with expanding personal finance knowledge will come a greater desire to help others. Whether you are assisting others through a blog or face to face, it is important to keep a few things in mind so as to inspire rather than turn off the person you are trying to help.
Tips for Keeping Another Person Interested in Your Personal Finance Advice
1. Give investing, debt reduction, or other personal finance advice with humility – Nobody enjoys being talked down to. Do yourself and the person you are trying to assist a favor and show some humility. As much as may know (or may think you know), there is without a doubt so much more that you do not.
On our site I try to constantly remind readers of my mistakes (better for me to remind them then for them to remind me). I find it is easier to facilitate an honest communication when our readers know that I make amateur mistakes all the time. Or the fact that I still owe six figures in student loan debt. The same applies in real life situations, maybe more so.
2. A Sense of Humor Will Help – As with most things, attempting to use a little humor should pay dividends. If Warren Buffet can incorporate some humor into his Berkshire Hathaway annual letters to shareholders, then you can feel free to mix a little humor into, for instance, your discussion with a friend about the best mutual fund companies. FYI: Vanguard is my personal favorite mutual fund company. (See, so you know it must be good, because I don’t even own a Van…note: it will help if your humor is actually humorous).
3. Be a Good Listener – On a blog the comments and the analytics will tell you what topics your audience finds interesting to learn about. In a one on one situation, it may be a little bit tougher to perceive such information. If you can act as a good and active listener, then the person you are attempting to help will open up. Thereafter your carefully chosen words can have a good chance of hitting home.
The other day my friend discussed his issues with choosing an investment strategy. I was going to say at his age a target retirement or other such index fund with 80% in stock might make sense. However, the more he talked the more I realized he was terrified of risk. I knew he would be the type of individual who would sell the stock at a low point and never get the return he should out of such a volatile and long-term plan, so I tried to adjust my recommendation accordingly. There is no one size fits all approach to personal finance.
4. Do Not Assume – This is something I have a tough time with sometimes during my day job as a lawyer. I have to remember that most people need me to provide them with a basic framework before they can move on to more complex issues. If you can’t get to that point when discussing personal finance with another person, then any conversation will ultimately not have the desired effect.
5. Be Compassionate – Personal finance is a sensitive subject. If someone is willing to open up about their problems, then you have to respect that. In other words, do the opposite of schadenfreude.
With any luck, you will be able to make a positive difference in another person’s life, which can be amazingly thrilling. Be careful to remember, however, that at the end of the day everyone has to make their own choices and their own mistakes.
Let me know what tips you use to help impart your personal finance knowledge to other people who are interested in learning from you. I am looking forward to reading and responding to the comments.
Broke Professionals is a personal finance blog aimed at over-educated and underpaid. Join the husband/wife blogging team of Broke Professionals as they attempt to dig themselves out of a combined six figures in student loan debt.