How do I give financial advice to my parents?

how to discuss finances with your parents

Ask the Experts: Talking about money with your parents

My parents are looking at losing their house (foreclosure on their 2nd loan). They have a new(er) car they spend a lot of money on. They are obviously not good with money. How can I GENTLY tell them to get rid of the car and get some serious budgeting/foreclosure help? I think they have given up. – Nicole

Nicole,

That’s a very tricky situation. You obviously want what’s best for your parents, but you can’t make them take any actions that they aren’t comfortable with. And if they’re as prideful as most of us are, the idea of asking for help is a difficult pill to swallow.

So what’s the best approach to get them to listen and take action? There’s no single solution and every parent will react differently, but here are a few suggestions for broaching tough subjects and getting your parents to listen.

Have someone else do the talking

Parents have a hard time taking advice from children, no matter how old both sides are. That reversal of accepted roles is difficult to deal with, which means that a lot of important advice from children isn’t heard.

So have someone else deliver the advice. Discuss the issue with a family friend and ask them to speak to your parents. It may be easier for parents to hear that same advice from a peer rather than their own children.

Focus on outcomes

Shame has a way of making bad situations worse and preventing all of us from moving forward and finding solutions. Any parent dealing with money problems could very likely be feeling ashamed that they’ve come to be in such a situation.

To make the conversation productive, shift away from any criticism of what your parents have or haven’t done and put the focus squarely on outcomes. “This is what will happen. These are your options.” Don’t tell them what to do – simply present them with the facts and let them make their choice.

Be understanding

Any sort of advice – no matter how well intentioned – can feel like a criticism. To get past that, let your parents know that you understand that they made the best choices they could with the information they had, but the information has changed and their actions need to change as well.

Remember the good things

It’s easy to feel hopeless and overwhelmed, especially when your concerns seem insurmountable. If your parents feel hopeless or overwhelmed you’re going to have a hard time convincing them to take action – especially any sort of difficult action with no guarantee of success.

So keep the focus on the things that they care about, and show how their efforts will positively impact those things. If your parents love their house, keep the focus there, and remind them that anything they do to save their house – whether it works or not – is time well-spent.

You are not alone

More than anything though, make sure your parents understand that they are not alone. Here at MMI, we counseled nearly a quarter of a million people last year. Hard-working, well-intentioned and intelligent people run into financial problems all the time – and that’s why we’re here.

So tell your parents to give us a call. If they’re not comfortable speaking to a counselor by themselves, offer to call in with them. The important thing is simply that they call. No judgments. No shame. Just solutions.

For more information on debt and budget counseling, visit our debt counseling page.

For more information on foreclosure prevention, visit our housing counseling page.