Sunday, November 07, 2010

Unsolicited Financial Advice

Previously, I wrote about a co-worker who received a pair of toning shoes as a gift. I had politely informed him that Clark Howard cautions his radio show listeners from purchasing toning shoes claiming people suffer injuries from wearing those shoes. I suggested my co-worker return them for a normal pair of shoes.

This week while chatting with my co-worker he said, “Tonight I’m going to clean the soles of those toning shoes so I can return them. They are the most uncomfortable shoes I’ve ever worn. The store should allow me to return them even though I wore them right? Especially if I make a big stink about how uncomfortable they are.”

This conversation got me to thinking, “Does anyone ever listen when given unsolicited financial advice?" In thinking back on previous conversations, my friends and family members have never reconsidered making a purchase such as a too expensive car, home, or wedding based on my advice. In the end the only thing I accomplished was straining my relationships.

I’ve come to the conclusion, if someone’s dream is to purchase a $30,000 car when they graduate from college despite not having a job nothing I say is going to change their mind; especially if Mom and Dad are co-signing. So why jeopardize my relationship. The bottom line is people don't listen to “You can't afford it,” but in instances like the one above where a purchase is clearly a scam, I will continue to give my unsolicited advice. Hopefully someone will listen.

How about you? Do you give unsolicited financial advice? Does anyone listen?


  1. Absolutely no one. The best you can do is try to educate.

    Some years ago - when the housing craziness was at it's absolute hottest - the receptionist at our office announced that she and her machinist husband were going to buy a $140,000 house. The Realtor had told them that they could get a 30-year loan and only pay interest for the first five years. The payments were only $100 more a month than her rent. What did I think?

    I asked her how much a month the taxes would be? and how much the PMI? And what did it mean that she would be paying interest only? Did she mean that she wouldn't actually own anything for the first five years? Seems the Realtor had not mentioned those costs, and hadn't really talked about equity. She went back and asked some questions. Long story short, they didn't buy a house that they couldn't afford. But I studiously avoided giving advice.

    No one really wants that.

    I agree with you about the shoes, but have refrained from commenting as people have gotten them. Don't really like your friend returning them worn, tho. Seems a bit unethical. No one wants to hear that either!

  2. Webb,
    At least your receptionist listened to you and asked more questions.

    Several years ago, a friend of mine used her 401(k) monies as a down payment for a house when she quit her job to stay home with her kids. I remember telling her that is great and all, but don’t forget to set money aside for the taxes and penalty. (This was before the automatic 20% withholding). She told me I had it wrong, her 401(k) plan was different and this was ALL her money. In April of the next year she called me in tears because she owed so much in taxes she had to borrow money from her parents. In the end she ended up selling her home and purchasing a smaller more affordable house.

    You are right no one wants advice and no one is going to listen. The best advice is to try to educate which is where I will focus my energies in the future. I like the idea of encouraging people to ask more questions. As for my co-worker I too think it is unethical for him to return the shoes. I tried to tell him the store wouldn’t take them back if they knew he wore them. That is when he began his tirade about them being the most uncomfortable shoes he ever owned.

  3. No one listens at the time you give the advice. But sometimes they remember afterwards that you warned them, which makes them seek you out later. That's about the best you can do.

    For future reference--the same is true for kids!

  4. Grace,
    Thanks for sharing your perspective. I hope you are right.