I have a relative by marriage whom I’m very close to. She has a master’s degree, but she makes such poor decisions for someone who’s smart and in her 40s.
This year alone, she’s already taken two trips. She makes a little over $9 an hour and she is on welfare. She rents a room from a family friend and has a brand-new car she finances thanks to the windfall she got after her dad died (she got a little under $20,000, the contents of his bank account, plus an extra $5,000 from a sibling who bought her out for their dad’s house even though their dad left him the house fair and square).
She blew through her inheritance fast and paid for the down payment on her car with credit cards. She already went through bankruptcy years ago, but obviously hasn’t learned her lesson. She is going on another trip in two months and asked me to join. I responded, “No, I have taxes to pay on my properties and bills.” I have no car note, and I hardly travel even though I can definitely afford it.
‘Is there such a thing as a travel addiction? She also smokes, so I know she has an addictive personality.’
She isn’t married and does not have kids or want any kids. She wastes money on weekly massages, acupuncture and these constant trips. I don’t understand how her government job allows her take off so much when she just started there. Is there such a thing as a travel addiction? She also smokes, so I know she has an addictive personality. She’s always broke yet doesn’t correlate this travel (she calls it treating herself) and addiction to being broke.
What are the future implications of her doing this? When she can’t pull money out of her retirement, she comes to us and asks us for money. She is bleeding her retirement dry and she needs help. What can I do to make her stop doing this? When I have told her that this is unhealthy she says we have different priorities in life. I said, “Yes, mine are paying my bills — and not your bills so you can take vacations.”
The Friend
Dear Friend,
Your friend is obsessed with travel, massages and other pleasurable activities — and you are obsessed with your friend.
I understand that you are concerned for her well-being and ability to retire in 25 years or thereabouts, but you also express anger, frustration and judgment toward your friend. That won’t help her and it certainly won’t help you. So while there are valid questions that your friend could ask to have a more balanced financial life and a more secure future, given her prior bankruptcy filing, my question to you is: Why do you care so much?
I’m loath to diagnose your friend, so to answer your questions more broadly. Yes, smoking is addictive and it’s bad for your health. But millions of people still do it. Living on credit is also far from ideal, especially with a limited income. And, you are correct, the earlier you start investing in your retirement, the better off you will be. You can’t make her do anything, but telling her your job is to pay your bills, not hers, won’t bestow her with self-belief and confidence.
You may say that it hurts to see her making bad decisions that will impact her future, but it’s also hurting you to focus so much on one person’s decisions. If you have, indeed, paid her bills, your job is not to try to fix her life and give free rein to passing aspersions on her lifestyle; your job is to have your own boundaries, and say, “I don’t believe it’s a good idea to lend money to friends.” And leave it at that. If she chooses to walk away because she sees that as a betrayal, so be it.
Maybe she has something missing in her life — she could lack self-confidence or be lonely — or maybe she’s having the time of her life and will figure out her own path in time. If she wrote to me, I’d probably give her advice about some things she could do differently. She is seeking new experiences, and maybe wants to escape her anxieties, for the moment at least. But travel is to your friend what she appears to be to you — somewhere to park your own unresolved feelings.
You may say that it hurts to see her making bad decisions that will impact her future, but it’s also hurting you to focus so much on one person’s decisions.
The Annals of Tourism Research published research in the aftermath of the outbreak of the COVID-19 pandemic and identified “travel craving” occurring where people are unable to travel for personal or health reasons. “Travel craving is a travel focused cognitive-emotional event with aversive or incentive properties experienced when a person who wishes to travel cannot do so, for reasons beyond their control.” This kind of anxiety could also, in theory, apply to limited finances.
You can lead and live by example. This study, “Friends with Benefits: Social Capital and Household Financial Behavior,” found that people can learn from wealthier friends by emulating them. Mixing friendship and finance, however, is risky. Just ask this couple, who wrote to me in 2021, wondering why they fell out with their neighbors. They were friendly until one day the “successful” neighbors introduced the letter writer to their financial adviser.
Rather than give her money or answer her requests with a snarky comment, offer to help balance her income and expenditure. Seeing her income and outgoings, which many people put their heads in the sand about, might (or might not) help her see that she can set herself attainable financial goals. Sometimes, if we believe that we’ll never achieve something, we throw caution to the wind, and think about today, tomorrow, but more rarely the day after that.
Dealing with facts and figures, rather than judgments and tit-for-tat is the most effective tool in showing a person the way.
If you really want to help your friend, and your friendship is a genuine one that you would like to nourish and sustain, you could give her the gift of an appointment with a financial planner. Make sure whoever you hire has a fiduciary duty to their client, and does not sell products or services based on commission, but rather works on a fee-only basis (rather than fee-based). This helps eliminate bias in their decision-making.
For anyone considering this as a gift to a friend or family member: Not all money managers are fiduciaries — that is, professionals who have to act in their client’s best interest under the Investment Advisers Act of 1940. Find out whether the prospective adviser is a fiduciary — rather than, say, a broker-dealer — and if they’re a member of the Financial Industry Regulatory Authority. Certified financial planners have similar codes of ethics.
Sometimes, cold, hard facts can shock a person into taking action (or analysis paralysis, it can go both ways). Obviously, the earlier you start saving, the better. Fidelity uses the example of “Sarita,” 25, who invests $7,000 a year in the stock market for 10 years. She ends up with a hypothetical $902,000 at 67. “Chris,” who starts saving the same amount at age 35 and continues to invest it for 32 years, has less than Sarita ($825,500 at the age of 67).
Ultimately, I’m a big fan of a piece of paper and a helping hand. Dealing with facts and figures, rather than judgment and tit-for-tat, is the most effective tool in showing a person the way. You can give your friend all the information she needs, so she can see the trajectory she is on in black and white, but then you must let go and allow her to live her life free of rancor or recrimination. It may bring you together, or make you see that you have grown too far apart.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
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