Helping a financially troubled friend (without spending a cent)

By Georgie Miller

So you've done it: Your financial life is under control. You've strengthened your finances by completing most, if not all, of these key financial tasks:

• Created a budget to ensure you're not spending more than you earn.
• Stashed some funds in a high-interest savings account in case of an emergency.
• Taken advantage of a low interest balance transfer to decrease the interest you are paying on consumer debt (or paid off your debt entirely).
• Optimized your spending by choosing the best credit card reward programs for your habits.

You feel like shouting about your success from the rooftops! You are excited to share how time, patience and determination allowed you to conquer your debt demons. Unfortunately, friends or family may not appreciate your success story -- particularly if they're still struggling.

How can you help the people you love through their financial difficulties, especially when lending money to loved ones can be dangerous? Let's say you can't (or won't) drop a wad of cash to solve someone else's money woes. Try these simple strategies for offering support:

1. Give them time to recognize their mistakes

It can be tempting to lecture people if you believe their problems are of their own making -- especially if the solution seems obvious to you. Similarly, it can be tough to hold your tongue when a loved one is on the verge of making what you believe is a financial mistake. Not surprisingly, however, many people don't respond well to being told they're in the wrong.

So how can you provide advice without coming across as overbearing? Sometimes you can tactfully ask questions designed to make the other person think, or tell a story about a similar problem you faced and how you overcame it. Other times, though, the hard truth is that there is nothing you can do until the other person realizes there's a problem. In circumstances like that, all you can do is make sure that you're not financially endangered by their situation, make responsible decisions in your own life, and wait.

2. Make sure they really want your help

OK, your friend (finally!) realized they're in deep financial doo-doo. The waiting's done -- or is it? Sometimes, people just need to vent. I have a friend whose recently-paid-off car just got totaled. We went out for a slice of pizza and she talked for almost an hour about how scared, frustrated and overwhelmed she was. However, she didn't need me to do anything except listen.

Even after someone's reached a turning point in their financial life, that doesn't mean they need (or want) you do anything except commiserate with their setbacks and cheer their successes. If you're not sure whether the person is asking for help or not, ask! Do you just want me to listen, or are you looking for help?

3. Recognize that help can mean many things

Help doesn't always take monetary form. In fact, even if someone asks you for money, don't be afraid to offer to help in a different way. For example, I might take my newly car-less friend to the grocery store once a week while she waits for her insurance check. It doesn't cost me anything extra (in fact, it's probably cheaper than joining her for happy hour would have been) and helps her with a genuine need.

Other examples might be sharing the URL of the personal finance blog that was most helpful to you when you were getting back on track (hint, hint). Or you could write down a few of your favorite cheap and easy recipes to help your pal transition into brown-bagging it to work. Or you could let someone use your laptop to revamp a resume and submit job applications.

There's lots you can do to make a difference to someone who's struggling without committing any cash. It just takes patience, emotional support and a little creativity.