“How do I stop my friend from spending her way into the poor house?”

By Martin Brown

My best friend is spending her way into the poorhouse and I’m really worried for her?
Is there a way I can tell her my concerns without having her be embarrassed or worse, hating me?—Lydia S., Cleveland, OH

You’re a good friend to care. That said, here’s an approach you can use to get your friend to open up:

Tell her that you just got this important test from a coworker at your office. It has five simple questions. If you answer yes to three of them, there is a good chance that your spending is out of control.

She may say that she has not seen you spend near as much as her. You’ll insist that you still want to be cautious, and that it is wise to get on top of your spending before you find yourself under a mountain of debt.

Having introduced the topic, print out these five simple questions and go through them together.

1.  I frequently make impulse purchases of items valued at $150 or more.

2.  Many of my purchases are motivated by my wanting what other people have as opposed to buying those things that I actually need.

3. Buying boosts my spirits. I feel like there is much that I’ve denied myself and my purchases relief me of those feelings.

4. I can handle what I spend because I have the credit cards and the credit limits that allow me to make these purchases in the first place.

5. Most or all of my credit cards are at or near their limit, and I pay the minimum due on each card every month.

Now if you can casually over a latte in a coffee shop, get your pal to agree that she answers yes to three or more of these questions, she has taken the first step in facing the reality of her impending financial crisis.

The next step is to go to one of the many sites that offer help and solid advice for the millions of us who are over-extended on our credit and need to bring our spending under control. One of my favorites is: http://web.extension.uiuc.edu/money/

This is an easy-to-use resource that can really change the way you look at your spending and your use of credit.

Certainly, whenever you feel the need to help a friend, you should do so. Friends don’t let friends drive off a financial cliff. Doing something to help push her in the right direction is the morally correct course. Then it’s up to her to follow through.