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This week’s Open Mic question comes from Zach Thomas in Scottsdale, Arizona.

I have been reading your site for about a month now and have really been working to get my personal finances in order.  So far I have managed to pay off nearly all of my credit card debt and build a modest emergency fund.  But my question doesn’t isn’t directly about me.  It is about my parents.  The more I get my own finances in order, the more I realize how out of order my parents finances are.  Although they are both over 50, they have very little saved in retirement accounts.  They have credit card debt exceeding $10,000.  And they continue to buy things they can’t afford.  My question is, how should I go about talking to them about their finances without making them mad?  Where is the first place I suggest that they start?  Should I even talk to them at all about it?

Thanks for the question, Zach, but wow, this is a tough one.  Talking to anyone about their finances, unsolicited, is extremely difficult.  Doing it with your parents can only be that much harder.  But if their finances are in as bad a shape as you say, I think it is something you absolutely have to talk to them about.

First of all, their finances do effect you.  What if something happens and they can no longer work, who do you think will be supporting them?  Probably you.  So you have an obligation to try and get through to them about their finances, not only for their own sake, but more importantly for yours.

Where and how to start the conversation is the tricky part.  And without knowing you or your parents, it’s hard to give the best advice.  But here is how I would handle the situation if it were me:

I would first start by trying to get them to read a few personal finance books.  Before you even mention that you are concerned about their finances, simply tell them you have been reading some awesome personal finance books and would like them to read them too and get their feedback on them.  Which ones you suggest is up to you, but two that I would strongly consider are Your Money or Your Life and Dave Ramseys The Total Money Makeover.  In my opinion these two books are powerful enough to “scare” someone into changing their financial ways.  Make sure you read the books yourself first, if you haven’t already, so you can discuss them with your parents after they read them.

If you are lucky, after reading these books a light will go off in one or both of your parents heads and your work is done.  And these books are powerful enough to make that happen.  But if it is not enough, or they just refuse to read them, it’s time to sit down with your parents and express your concerns.  Explain the behavior and situations that concern you and why it concerns you.  Start first with why it concerns your for their sake and then why it concerns you for your own sake.  Be prepared for the conversation with notes and specific numbers.  Be ready to explain the actions you want them to take and goals that they can shoot for.  Perhaps even have the names and numbers ready for Certified Financial Planners in your area they can turn to for help.

If you are still not getting through to them at this point, it’s probably best to let it drop for now.  Explain to them that you will not be there to help if a financial disaster hits and move on.

Financial problems are very similar to drug problems or drinking problems or eating problems or nearly any other kind of addiction problem.  Until the person decides they want to change, you can’t help them.  The best you can do is give them the information they need to make the changes they need to make, offer encouragement and hope for the best.

Eventually your parents will find the errors in their financial ways and be willing to get your help.  In the meantime don’t let it ruin your relationship with them.  Be glad that you are getting your finances in order so early and be their to help when your parents are ready to change.

What advice would you guys give to Zach?  Have you had to deal with family or friends who were awful with their finances?  How did you approach the situation?

If you would like to be featured in a future addition of Open Mic, send your personal finance related question to centsabilitytowealth@gmail.com.