10 Signs You Need a Financial Intervention

financial intervention

For most people, the word “intervention” brings to mind a last-ditch attempt to save a loved one from the evils of drug or alcohol addiction. In reality, an intervention can also be very helpful for an individual who is suffering from poor financial management, expensive addictions, and mountains of debt.

As with any other form of intervention, the goal is to save someone from himself or herself. You have someone you care about and you see his or her financial life is spiralling out of control – you don’t have to wait until they are penniless to step in. Financial trouble is as good a reason as any to intervene and try to help someone you love get back on track.

But an intervention is not something you should take up on a whim. Make sure you see at least one of these ten signs before you start planning a financial intervention:

Unpaid Bills

This is the first sign to watch out for. Allowing bills to pile up and getting multiple warnings from utility providers is a sure sign that there’s financial trouble. An intervention can help your friend or family member figure out where the problem lies and what needs to be done.

Defaulting On Loans

A lot of people have heard myths on defaulting on loans, and they may assume that it’s perfectly fine. Not true. Student loans, for example, will never be forgiven. And you can’t even claim bankruptcy to get out of your student loan debt.

Defaulting on loans happens for two reasons: (a) the borrower lacks knowledge of the loan agreement’s details; and (b) the borrower simply doesn’t have enough money to pay the monthly payments. Either way, an intervention is in order before things get worse.

Uncontrolled Spending

Spending too much is okay once in a blue moon. Everyone needs to indulge once in a while.

The problem starts when you start indulging too often.

People who shop compulsively may need to see specialists who can help them with this addiction. Since it’s a compulsion, it’s probably rooted in something deeper and will require the assistance of a specialist.

Gambling Addiction

At first gambling may begin as a fun night out. But then a person begins to win a little and things get exciting.

But there are instances where people get so addicted to the thrill of winning that they spend every pay check on gambling whether they win or not.  That’s when they need professional help.

In fact I remember a story in our local paper a few years ago about a young man that was literally taking his weekly pay check to the casino every weekend and gambling in the hopes of doubling his pay check. Instead he lost it, and then some. Unfortunately he got to a point where he couldn't pay his rent or any other expenses and instead of seeking help he jumped off the balcony of his apartment and died. His is a very extreme story, but sadly it does happen.

Risky Investments

Similar to gambling, taking on risky investments isn’t a financial thing – it’s emotional.

People who feel a rush in putting down money on risky investments are gamblers, even if they’ve never been to a casino.

There are also investors who purchase risky investments not because they want the rush, but because they’re buying into fantasies, such as hitting the jackpot by buying penny stocks. Both are problematic attitudes towards finances.

No Savings Or Retirement Fund

Millions of people do not have money saved away for a rainy day.

Unsurprisingly, many are financially unprepared for retirement.

Although it may be a slightly less frightening sign compared to the others on this list, it might be linked to other problems like excessive spending. It’s a good idea to stage an “informal” intervention or try to talk to your loved one and discuss the value of savings.

Heavy Borrowing From Bookies And Private Lenders

Borrowing in itself should not be considered a problem. A lot of people have to take out loans for cars, homes, and even education.

However, if you notice that your loved one borrows constantly and regularly – one loan on top of another – simply to pay debts off or afford luxuries, then there’s a problem.

Growing Credit Card Debt

This is closely tied to excessive shopping. It’s particularly true for young people who may be experiencing the thrill of using credit cards for the first time. What to look out for: multiple credit cards, large amounts of debt, and paying only the monthly minimum.

Consistently Over-Budget And Unable To Make Ends Meet

Another sign that your loved one needs a financial intervention is when he or she consistently has to forego some necessities in favor of others.

For example, is he or she already choosing between shopping for food and paying the electric bill? Try to chart your loved one’s monthly budget to see if there is overspending.

Being consistently over-budget is a sure sign that there’s financial trouble.

Financially Dependent On Others

Do you have family members or friends that turn to you quite often asking for money, or asking you to buy them things? You may not realize this, but it’s another sign that it’s time for a financial intervention.

Though you may feel guilty, instead of giving them money, use this as a time to either help them with their budget, help them find a job, or help them find professional help and guidance.  

In some cases you may be dealing with people that do not care about their finances at all, and when you try to help them you feel like you are getting nowhwere. But there are also people that are in financial trouble simply because they do not know any better. And quite often, they are very receptive when others offer suggestions and assistance on how to manage things better.



    • DC @ Young Adult Money

      DC @ Young Adult Money 07/18/2013 6:58 a.m. #

      Those Archie writers sure have a sense of humor! Ah..the whole stimulating the economy through spending argument...I won't comment on that since your post is about the need for financial intervention, and I would agree there are some cases where people need professional help. I know gambling can be dangerous because some people chase their losses. If you can set a budget, though, I think most people can gamble without getting into financial trouble.

      • Sicorra

        Sicorra 07/18/2013 2:25 p.m. #

        Not to disagree, but I do wonder how many are gambling well beyond what they can afford. A friend of mine once told me about her father spending most of his retirement money at the casino soon after her mother passed away, and she was very worried when he got to a point where he was there everyday.

    • John S @ Frugal Rules

      John S @ Frugal Rules 07/18/2013 7:57 a.m. #

      I never had an intervention done on me, but was awfully close to that as it took several friends to talk to me about my money habits. I was guilty of too many of these...no bookies though. :)

      • Sicorra

        Sicorra 07/18/2013 2:27 p.m. #

        Thank god for no bookies, right? I always picture those guys as the ones you hear about that break a guy's knees when he forgets to pay, or is that the high interest lenders. Good for you though for getting all your finances in order :-)

    • krantcents

      krantcents 07/18/2013 9:19 a.m. #

      Great points! For some shopping is a recreational sport or therapy. What they do not realize is the consequences!

      • Sicorra

        Sicorra 07/18/2013 2:28 p.m. #

        Yes, shopping is a huge addiction. Probably more than most of us realize.

    • Michael Belk

      Michael Belk 07/18/2013 5:50 p.m. #

      Sicorra, the picture of the girls shopping was hilarious because some people really feel that way.

      Those are some good tips to keep in mind while shopping and some reelistic signs you may need help.

      Thanks a lot.

      • Sicorra

        Sicorra 07/19/2013 12:21 p.m. #

        Thanks! I thought it was cute too.
        Yes, they are all signs that help is necessary. Too often though people live in denial.

    • Christy Garrett @ Uplifting Famiilies

      Christy Garrett @ Uplifting Famiilies 07/18/2013 8:58 p.m. #

      Addictions can lead to divorce, bankruptcy, and many other negative consequences. Thank you for sharing this valuable information.

      • Sicorra

        Sicorra 07/19/2013 12:22 p.m. #

        Exactly! That happens time and time again and it is very unfortunate.

    • Corinne

      Corinne 07/18/2013 9:15 p.m. #

      Good points Sicorra. I know the over-spending one especially gets to us. It's just so easy to buy one thing, then another until it snowballs and you find yourself spending more than you should

      • Sicorra

        Sicorra 07/19/2013 12:23 p.m. #

        I can relate to the over spending too. And yes, it is very easy. Been there, done that :-)

    • Arelis Cintron

      Arelis Cintron 07/19/2013 12:47 p.m. #

      I thought I might need a financial intervention since i'm a bit of a shopaholic but I do not fit into any of the ten so YAY me! There's still hope!

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