With the exception of a regular sit-down with your spouse, the annual goal meeting with your tax guy, or a consultation with a “real” personal finance expert, your budget should be something personal and kept close to the vest. Why? It’s best for you – and can help you to keep perspective in the day and age of spending more! Here are compelling reasons to keep it quiet:
1. People are hurting & your “insight” can make it worse.
Unless someone comes to you with a genuine interest in comparing budgets (which, let’s face it, never really happens), don’t spill the beans on how much you’re spending on what. Someone with a recent job loss doesn’t want to hear about your new-found passion for Australian handcrafted wines – even if it’s a reasonable budget allowance for you. In this era of so many scrimping to buy shoes for their kids and keeping the lights on, sometimes it’s best to tone down the volume on your own spending to a mum.
2. You may not really know what you are talking about.
Yes, I said it. It seems like anyone with a platform feels the need to give advice, and while you may have some golden nuggets of “what works for you” to share with others, you may also be way off base. Unless you live in their home, and see the ins and outs of a family in detail, it’s rather difficult to make safe recommendations that won’t throw their whole budget out of whack.
3. You won’t be listened to, or appreciated.
Do you ever wonder why some people ask about how to true up their budget, only to ignore or dismiss everything you say? Some folks find budgeting difficult, not because they can’t do math, but because they despise limits. It’s probably OK to say “maybe you should skip buying a new purse dog this month” but don’t be surprised (or hurt) when they come home with a new furry companion, a seasonal puppy wardrobe, and the poshest pet bed on the market. (Remember that some spending comes from emotional issues.)
4. You could be held liable.
While it’s not likely that you would be sued for sharing your tips for a more modest lifestyle, you can be blamed for the outcome. Since your friend has the freedom to take bits and pieces of your consultation and “skew” them to meet their own desires, you could end up in a situation where they kind of follow your advice and meet disaster as a result. Do you really want to be responsible for that?
5. You could be scrutinized.
One reason why I don’t feel comfortable with sharing my own budget is because I like to keep my spending habits private. Sure, I have the regular array of groceries, new tires for my vehicle, and health insurance premiums on my last bank statement, but I also have some business expenses that could be incorrectly classified as indulgences. (My iPhone, new PC, or trips to NYC, for example.) Be aware that, when you share, you also informally invite opinion.
So when is it okay to give financial advice to a friend, relative, or other who asks? Under the most secure of circumstances, I would recommend only giving general and timeless advice. Examples of this could include:
- Reminding your friend that you income must always be higher than expenses.
- Encouraging a thorough method of tracking purchases (software, budgeting forms, or online banking.)
- Supporting an open communication policy between spouses.
- Recommending an expert that they can get in touch with if they need specialized help.
If you’ve done all this, you are a true financial friend. Leave the details of who spent how much on what to the gossip mags.
Are you ever tempted to give other people financial advice?
|Linsey Knerl is a homeschooling mom of 5, the Community Manager for Wise Bread.com, and a freelance blogger and writer. She co-authored the recent 10,001 Ways to Live Large on a Small Budget, and you can read more about her at Lille Punkin’ and The Freelance Farmer.|