When someone close to you is making one destructive financial decision after another, it may be time to step in
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
When someone close to you is making one destructive financial decision after another, it may be time to stage a credit intervention.
An intervention that focuses on a person’s spending and borrowing actions can be a life-changing event. It allows you to respectfully and lovingly show the person they’re on a dangerous path, explain how it impacts you and others, and offer options for resolution.
Signs an intervention is due
How do you know when the time is right to act? Karen McCall, founder of The Financial Recovery Institute in San Francisco. says the person may not be sleeping or eating because of their debts, but continues to rack up card charges. “They continue their behavior regardless of the negative consequences,” she says.
There are other indications a person is drowning in debt or making negative monetary choices, says Ray Williams, a personal financial consultant from Fort Worth, Texas, who leads financial interventions. Loved ones should be on the lookout for the following signs. For example, the person:
- Constantly receives collection calls or the mailbox is packed with letters from creditors.
- Always has credit cards denied at the store or constantly juggles cards to find one that works.
- Is a regular user of payday services or check cashing stores.
“In those cases, an intervention is in order,” says Williams. “It shows extreme financial distress that hurts everyone close to the person, especially if they live together.”
If you’re tempted to let the person connect their own dots before seeking assistance, don’t wait too long. “People are afraid to ask for help,” says Williams. “Sometimes they don’t understand they’re in a crisis because they don’t look at their numbers. Not even when they start receiving collection calls and foreclosure notices.”
Williams used to be a loan officer, and recalls a client whose vehicle was being repossessed. “I asked why she didn’t call the bank and ask for help,” says Williams. “And she said she didn’t know she could do that! By the time I talked with her it was too late.”
What an intervention looks like
Picture an intervention for someone abusing drugs or alcohol and it will probably resemble what Jess Young, a recent college graduate living in New York City, imagined. “I watch the show \u2018Intervention,’ and there is a person there who doesn’t know the addict and everybody is screaming and crying,” Young says. “It’s scary and sad.”
People are afraid to ask for help. Sometimes they don’t understand they’re in a crisis because they don’t look at their numbers. Not even when they start receiving collection calls and foreclosure notices.
|\u2014 Ray Williams|
Personal financial consultant
As a result, Young was nervous about confronting her deeply indebted sister.
“Me and my mom did an intervention on her because she wasn’t paying her bills,” says Young, “We were roommates then, and she got behind on everything and was always asking to borrow money from me. I was working and she was in college.
“She never, ever had the money for rent on time. We fought a lot, but she never told me what was going on, just made promises to pay me that she never kept.”
Eventually Young called her mother and they decided to hold a meeting.
“We wanted her to see what she was doing,” says Young. “I said, \u2018Mom is making us dinner tonight, so you need to go.’
When she got there, we told her we had to talk. It was just us three, no interventionist. We talked. I told my sister I was almost evicted because of her. I said I couldn’t live with her anymore because of it and we used to be so tight. I cried. My mom said she was giving her money so she could pay her credit cards, but she can’t do it anymore.”
It was an emotional but revealing process. Young discovered her sister had not completed her student loan paperwork correctly and had been trying to survive on loans and plastic.
When it was all out in the open, Young’s mother said she would take her sister to the financial aid department at the school to fix the problem. “I think [my sister] was very relieved,” says Young, who lives alone now. “She also went to credit counseling for her credit cards because mom said she wouldn’t give her any more money to pay them.”
There are professionals who can help
Nonprofit credit counseling agencies are a frequent site for professionally led financial interventions, says Michaela Harper, director of community education for Credit Advisors, a credit counseling agency in Omaha, Nebraska. Harper said Young’s situation is typical.
“A student goes off to college who is supposed to be living on loans, will ask mom and dad for more money, and they need an intervention on how to budget,” says Harper. “We get that frequently.”
For example, Joel Doelger, who works for Credit Counseling of Arkansas, says he had a case in which a mother brought in her two adult sons so they’d stop ignoring their student loan obligations.
“It seems that grandma was getting ongoing calls from collectors about the student loans,” says Doelger. “Apparently, she had been put on the loans as a contact person in the event that the borrowers (the sons) were ignoring efforts to reach them.”
The mother finally had heard enough from her mom and scheduled appointments for the young men and brought them in together.
“They acted rather sheepish at first, but admitted they wanted to address the defaulted loans,” says Doelger. Together they walked through the consolidation process to bring the loans out of default.
“I didn’t have to convince the young men that the loan issues had to be addressed,” says Doelger. “They knew that. Mostly, I just had to show them that they could be set up on affordable repayment plans.”
Although many interventions begin with relatives interceding, professionals can be introduced if they feel a third party would be more effective, says McCall. “I usually come in after the family tried or doesn’t know how to approach it,” says McCall, who can keep the conversation on track and peaceful.
When McCall leads interventions, she creates a plan involving a graduated approach.
“If the parent has just been bailing the child out of credit card debt, they say it stops here,” McCall says. “But the intervention is about helping the person become self-supporting. We work on that, how to achieve that. It sounds simplistic, but I talk about how to make their first payments.”
If you can explain to the person how they’re making terrible choices in a kind way while also presenting short- and long-term solutions, great. Otherwise, it would be wise to contract with a fee-based financial counselor such as McCall, or use a credit counseling agency, which is usually free.
Be careful who you invite to the meeting
Whether on your own or with an expert, be careful who you ask to attend the first meeting. According to Harper, it should be those who are directly affected by the actions of that person.
“The only people who should be involved are those who have skin in the game,” says Harper. “That would be a significant other, best friend, a roommate. I recommend you do not include children. Kids don’t have the responsibility to fix things, so leave them out.”
Once the participants are set, call the meeting, and make a point to be kind and candid.
“I get everybody together in one room to talk,” says McCall. “It’s not punitive, it’s loving. If it’s a parent’s goal that they don’t want to continue to support the child, they say, \u2018We want to move away from that role, but we don’t want you to be homeless either.’
“It’s the same way someone would approach an alcoholic,” says McCall. “Everybody speaks. They have the chance to tell the person that it’s affecting them, they’re worried.”
“A financial intervention can save the person a lot of stress,” says Williams. “So many people lose their homes, vehicle, credit rating. It’s unnecessary. Jump in, do something. You can do it yourself, but if you don’t know how, refer the person to credit counseling. Take them there. Go together.”
The end result, says Williams, is almost always relief.
“I have people who were considering suicide because they were losing their homes. They need to know help out there,” says Williams. “Is it comfortable? No. A financial intervention is embarrassing. People don’t like their secrets to be known because they’re accustomed to a certain lifestyle; they want to maintain it and pretend. So, they struggle and they feel ashamed. If you love them, it is your place to say something. You’re saving them.”