How To Teach A Curious Friend About Financial Independence

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This post was inspired by the wonderful Ms. Mod over at Modest Millionaires. She recently helped a friend with their finances and asked if I had any tips to help the meeting go smoothly. After being on this path to financial independence for over four years you better believe I do 🙂 !

Throughout the years, dozens of people have asked me to explain financial independence and how I’m retiring at 30. This explanation is usually met with indifference (people are so weird) and possibly them scoffing behind my back (I can only suspect).

However, a curious few ask to know more. This leads to me setting up my favorite kind of meeting: A FINANCE CHAT! Some people just want help reigning in their spending and others are interested in how they also can retire ASAP. Regardless of how deep into FI they want to go, I’ve found that there are some constants to all of these interactions that have helped pave the way for more conversation and actual action on their part! Here are my tips for teaching a curious friend about financial independence:

1. Let Them Come To You

I think this is the biggest one. Finances in the US have the weird distinction of being up there with sex, religion and politics for topics that we don’t often discuss. They’re taboo. I wish this wasn’t the case with finances, but that’s our current reality. For that reason, people are sensitive to money talk.

Despite feeling extremely lucky that I joined this community, I am not one to push my ‘agenda’ on others. However, I am extremely open about the fact that I’m retiring next year. All my friends and family know this. The only people I’ve kept this information from are my coworkers for obvious reasons, but even a few of them have found me out. Maybe I should stop yelling at people to actually contribute to their 401(k) and stop debating the value (or lack thereof) of cryptocurrency.

Anyway, several friends and a few savvy coworkers have come to me and asked for financial advice. Since I let them come to me, I believe they were more open to the idea and waited to talk to me until they were actually prepared to make a change in their lives.

2. Have Them Come Prepared

For these super fun Finance Chats, I usually schedule an hour at a comfortable place like a coffee shop and ask the person I’m meeting to come prepared. By that I mean that they need to bring all the relevant financial information we will need to analyze their situation, which usually includes information about how much they are spending and on what (this is usually based on Mint.com data), information on what they’re making (W-2s are good for this), and any passwords they will need to access this kind of information. The password trick I learned after watching a friend try to figure out various financial institution passwords for 20 minutes. Complete waste of time.

In order to save time, I also like to bring prepared excel sheets with easy calculations already in there (like how long you are to retirement based on your spending and income). Easy stuff, but I’ve found that being able to just plug-in numbers instead of recreating these sheets while talking to people saves some time. I also usually email them a list of these things to bring as a reminder to make sure they actually follow it. I guess my neurotic project management tendencies are leaking into my real life.

3. Provide Gentle Encouragement

So you’ve had the meeting! In the most extreme example, a colleague of mine walked away realizing that if he got his shit together he could retire in 6 years at 31. Mind blowing. He was given a list of things he needed to accomplish to get there, which included cancelling the TWO annuities his father had gifted him (yes you read that right), putting 100% of his last 2 paychecks of the year into his 401(k) to max it out, maxing a traditional IRA and being more intentional about his spending in case there are areas that reveal themselves as easy to cut.

All of this can be overwhelming, which is why after sending someone off with a list of actions to take, I like to provide constant, gentle encouragement. When I see them again I might ask for example “how’s cancelling that annuity going?” If they haven’t gotten to it yet I don’t berate them or anything, but gentle reminders seem to help keep people on track. Life can be very busy and it can be hard to prioritize yourself and your finances so I’ve found these nudges to be helpful even though it may take a while for people to make the changes they need to.

Conclusion

And that’s it! The tips I’ve found that are most helpful when assisting curious friends with their finances. I know a lot of people in this community practice stealth wealth and are pretty tight-lipped about their journey to financial independence, but I’ve found that if you’re willing to put yourself and your goals out there a little, the people who are genuinely curious or looking for help on this taboo subject will flock to you.

Have you helped others with their finances before? What tips have you found most helpful?

40 thoughts on “How To Teach A Curious Friend About Financial Independence

  1. Definitely agree with letting them come to you. I try to stop myself if I find I’m initiating a finance conversation as I don’t want to come across as preachy – especially with friends who don’t earn as much. But I’m always surprised by how interested most people are in this supposedly boring personal finance stuff when we get started on it.

    1. Ooh people are interested in it? That’s awesome. I’ve usually found that people feel overwhelmed and (even when we sit down to chat) are reluctant to do so. I need to find some more friends like yours!

  2. These are some good rules for starting the conversation, especially the first one. Nobody wants something thrust on them.

    I finally turned Mrs. BF on to financial independence in a big way over the last few months. Now she’s telling everyone with a pulse about it, and it typically elicits a confused look if not explained well. We need to work on a better approach with our family and friends, and maybe these rules can help!

    1. Totally agree – nobody likes to be preached to unsolicited. Congratulations on Mrs. BF getting onboard! And yeah I was the same way (excitedly telling everyone) in the beginning and learned to have a more tempered approach after getting those confused looks 🙂 .

  3. Having them come to you has been hands down the biggest one for me – and the best part about being so open about my blog. They can read and follow along anonymously, and then a number of them have THEN come and asked my advice when they were ready.

    1. That’s so cool! I’ve never thought about that perk of being open on the blog. You’ve giving me a lot to think about 🙂 .

  4. I agree completely about having them come to you. A lot of times if the topic of finances is brought up it seems to be taken the wrong way and even as an attack toward the other person’s lifestyle and financial choices.

    This is a huge reason I started a blog, so that I can have an outlet for one of the biggest interests in my life (financial freedom!) and letting people come to it on their own terms. financial freedom!

    1. Yes! That’s a great point about why we start blogs. Rebelling against a society that doesn’t let us talk about money 😉 or something less extreme. Thank you for stopping by!

  5. i have had a whole bunch of friends and acquaintances ask if i would help them with this money stuff. i tell them they should call any time and we can set something up at my house. i’ve even suggested emailing back and forth is they’re out of town. i use the appointment type approach because it ‘s usually a social event when they express interest. folks rarely follow through. the one who does is malevolent missy from my finance rules for young employees series. she just bumped up her retirement contribution and later we’ll look at the tax tables to make sure her withholding is about right. i don’t push it, either.

    1. That’s so interesting – I haven’t had anyone express interest and not follow through…maybe because I put an appointment on their calendar so they can’t escape lol? I’m not sure. Though you mention they usually express interest in a social setting – if alcohol was involved I find it interesting that a tipsy person would want to get their finances in order while their sober version wouldn’t. Congratulations on your successful student! That’s awesome she’s taken those steps.

  6. I take pride on the fact that I got 5 people at my school signed up to start their 403B (we have Fidelity), and 4 people to switch from a shitty company we were with to Fidelity. They were charging 2.5% in fees.
    Now my expense ratio is 0.017%
    Retirement is something that always comes up in conversations with fellow teachers. Usually, it starts with “I wonder how some people retire in their 30’s and 40’s? A couple of years back, that would have been me.
    Now I answer to that question with “well, the math behind retirement is pretty simple…”
    And we go down the rabbit hole.
    I enjoy reading a few of your posts. I agree with you, standardized tests suck! Kudos to your mom for supporting you, giving you stepping stones and not a wall.

    1. Those are amazing accomplishments – Congratulations! And it’s awesome retirement comes up a lot with teachers. It’s literally never been mentioned at my work (except in 401k presentations). Love that you take them down the rabbit hole! Glad you’ve been liking the posts and yeah I’m very lucky with my Mom and how she decided to raise me.

  7. Thanks for the tips. I usually go to my close relatives and friends who obviously make good mony without any planing. Like to be an eye opener so they will start at least tracks their cash flow.

    The question is how ppl know at first place about u ? So they will come to you?

    1. That’s great – have you had any success helping them know where their money is going? People close to me know I’m trying to retire early so they come asking how and that evolves into talking about finances in general. Thanks for stopping by!

  8. Ugh, the only time I “helped” someone with their finances was my in-laws. It didn’t go over well. Mainly because I sat them down forcibly. I know, I know. But it’s because neither one of them would stop blaming their poor financial situation on the other. I couldn’t handle it anymore.

    They essentially shut down as soon as we realized that they were each spending significantly more than they thought (one was plowing through cigarettes, which is a painfully pricey habit). They didn’t really change their habits, buuuut they stopped blaming each other in my hearing. So something good came out of it.

  9. Oh my that’s a tough situation. I’m glad they stopped blaming each other and realized their spending was more than they thought. That’s something! And yeeeah cigarettes – I have to keep my face in check if someone is smoking while telling me how they have no money for X. To each their own!

  10. So…can random folks off the internet contact you for help, folks not even based in the US? I’m based in Canada, but always down to get help if it’s available.

  11. I had a friend who begged me to help her create a budget to pay off her credit cards. So I created a spreadsheet showing income, expenses, how to pay off credit cards, and what she could save. Then I found out she never opened a 401k…she worked at her employer for 15 years. I kept telling her the importance of opening one up, and she finally got around to doing it (even though I have no idea what she invested in).

    For the most part, I don’t chime in when my friends talk about money. They honestly don’t want to hear anything I have to say since I look like the “poor” one compared to our group of friends. I honestly do less and less with that group because all they do is spend.

    As for my immediate co-workers, I make the least amount so I don’t know what I’m talking about when it comes to investments, budgeting, finances (I have the highest net worth out of the group). I just shake my head…it must be nice when people actually listen to your advice.

    1. Did she end up paying off the credit cards based on your spreadsheet? Glad you at least had a partial win with her opening the 401k (despite not knowing where she’s invested). And yeah obviously I don’t know your friends, but they don’t sound like the most helpful group (if they care if you look ‘poor’ – whatever that even means…)

      You co-workers all know what each other make? That’s awesome! Not sure why that would equate to who knows how to handle money though. My boss makes over 5x what I do and still asks me about investment advice (and obviously knows what I make since he gave me the offer). It is nice when people I care about follow my advice, but honestly it doesn’t sound like that friend group or your coworkers qualify for that criteria.

  12. I think you hit the nail on the head with your #1. Let them come and ask a specific question regarding finance. This way, at least they have an interest in hearing what I have to say.

    Volunteering nuggets of golden advice would be useless if the person never asked for them. That person would just either zone out the conversation or think of you as a “know it all” and nobody likes to listen to a “know it all”.

    1. Totally agree. Telling people something they’re not interested in hearing makes it go in one ear and out the other. I also don’t want to be known as a “know it all” 🙂 since I definitely don’t.

  13. These are all great tips, Purple. That first one is tough for me, especially when it’s someone I care about. If I see how making one change could completely shift their situation, I share it. Most of the time, it goes in one ear and out the other, like you said, but my little sister actually listened. I’m working on minding my business unless asked, though lol.

    1. So glad they were helpful! That’s fair that it’s hard when it’s someone you care about. I’m so glad that worked for your little sister! Otherwise I have found similar outcomes (they don’t listen) or worst case they get defensive and think I’m judging their choices for some reason. It can be hard to keep your mouth closed when people are making money mis-steps, but they’re their choices to make.

  14. Fantastic tips! When I first learned about FIRE, I’m sure I turned people off when talking about it. I couldn’t help it as I was so excited! However, most people didn’t share my excitement. Now I generally take the same approach that I do with all other things – it’s attraction rather than promotion. Let them come to you!!

    Additionally, when I meet with women who want help with their finances, it’s so crucial to have them come prepared. Great tip about the passwords. I hadn’t thought of that one.

    1. So glad you liked them! And I’m totally with you – I was the same way. I just found an idea that was changing my whole life and was eager to share. “Attraction rather than promotion” is a fantastic way to think about it. And yay for you meeting with women to help them!!! That’s amazing. Thanks so much for stopping by!

  15. I’m slowly rubbing off on my friends.. but since I have the highest income of my friends so I’m met with some disbelief.

    It does make me feel awesome now that they come to me with general investing and finance questions. I’m hope the topic of money continues to become less taboo! The Purple Life is helping that cause!

    1. That’s awesome you’re rubbing off on them – and awesome you actually know what they make. I’m not to that level with a lot of my friends. I’m willing to share, but they’re still tight lipped about it (which is fine). That’s amazing they come to you with questions – I love that stuff! And yes – let’s keep working to make it less taboo! Glad I can add to the cause.

  16. Purple – You might have yourself a little lifestyle coaching business in your future.

    In all seriousness, someone who’s paying you will be more inclined to follow your advice. I am struggling when I give out my advice for free because it infuriates me when I see people not taking it. I guess I can’t get away from that coach in me from my corporate days

    1. Haha THANK YOU! I’ll add that to my list of possibilities if I ever feel like less of a lazy person. Totally agree someone who is paying would be more likely to follow my advice. I’ve actually thrown around the idea that if people keep asking me for financial advice in retirement and they’re not a close friend I’ll tell them it costs $20 or $50 so they don’t waste my time/not show up last minute/reschedule last minute when I was building my beach time around this appointment. Incentives! I feel you on it being annoying when people don’t take your advice. It’s annoying when they basically waste your time in that way. I hope you have better luck in the future coach!

    1. There’s no such thing as late here 🙂 . Glad you liked it!! It is definitely hard to hold back about it – especially since I would be pissed if someone discovered it and didn’t mention it to me. It’s a delicate balance lol. Thank you for stopping by!!

  17. Someone just Twitter posted this and it came at the right time. I’m starting to get a rep as the wise guy with finances and a couple of people are asking questions. I’ve never pushed it on anyone, I never wanted to, but am happy to help anyone who asks. You posted some great tips above that will be super useful!

    I’m currently helping two people on very different ends of the spectrum – one is a former big spender who really settled down a lot and is looking to really get her finances in gear; the other has a pretty good nestegg and after my advice took the high paying job she was offered with the goal of working it a few years until her nestegg matches 25 times per spending level.

    The coffee shop is my usual haunt for these things too, but the last one was literally on the side of a mountain! haha

    1. That’s so exciting!! So happy I could help. Sounds like you have some awesome protege in the making. Coffee shops are great meeting points, but the SIDE of a MOUNTAIN?!? That’s next level!

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