How to share your wisdom on finances with a friend
I feel torn when friends say they can’t afford their student loan bills but shop with abandon anyway. Is it up to us personal finance buffs to give advice when friends make obvious money mistakes? How do we do it without being offensive or annoying?
“The ‘helpers,’ if you will, often turn the help on like a giant fire hose,” said Amanda Clayman, a financial therapist in New York. “That very often ends up overwhelming and even shaming the person who has been struggling.”
And that can discourage open dialogue or a willingness to address money issues.
Here are some steps to help you share your wisdom with others while staying on speaking terms.
Assess your relationship
A key consideration of whether to speak up is your relationship with the person in question: Is she a childhood friend or an acquaintance who happened to divulge her medical debt? The closer the relationship, the more it probably makes sense to assist, despite the risk of creating tension. Speaking up early may prevent the financial mistakes from getting worse, and you won’t find yourself years down the road explaining why you withheld helpful information. Let your friend know you’d be happy to talk through money concerns, if he or she is open to it.
But make sure the advice you plan to offer will, in fact, be helpful. Assess your own financial strength — your cash flow, credit score, debt, insurance coverage and savings — perhaps by taking an online financial health quiz. Be careful about offering specific investment advice, says Eric Rosenberg, a personal finance blogger at Personal Profitability. Your friends could lose money — and blame you — if a stock you recommended loses value. You’re safer giving general advice, like suggesting they see a fee-only financial planner to develop a personalized action plan.
Pick your battles
Rosenberg says he’s most inclined to jump in when he sees close friends making choices that have a long-term impact on their finances. Accruing high-interest credit card debt and not saving for retirement are some of the biggest red flags, he says. A friend who occasionally splurges but doesn’t feel trapped by debt and is working toward long-term goals is less of a concern.
Enable independence
Once you’ve decided to offer advice, it could be tempting to break out the charts and stepby-steps. But try to understand how your friend thinks and feels about money. Acknowledge how difficult it can be to achieve peak financial fitness, and that money management requires ongoing attention.
Consider helping friends build awareness of their finances, Clayman says. Suggest they take a weekly look at how much money they started with and how much they spent. “That may be what it takes for the person to be able to organically help themselves,” Clayman says.
Share your own goals, too, even if they’re not money-related. If your friend decides to save $1,000 for retirement by October, offer to set a goal of being able to run 7 miles by that time instead of your current 4, Clayman says.”
Take no for an answer
Your advice might fall flat. Some friends will decide they’d rather do their own thing, or that they’re uncomfortable talking about money altogether. Don’t push. Say you’re available if they have questions in the future, and that you only want to support them. That’s friendship 101.
Investing guru Warren Buffett once was quoted as saying Coca-Cola was such a strong company that a ham sandwich could run it.
As new Coke CEO James Quincey takes over from the departing Muhtar Kent, he faces challenges that have turned Buffett’s aphorism into a painful reminder of better days.
The Atlanta-based company is still hugely profitable, but increasingly under pressure. Soda sales stalled, and its core Coke brand slipped in the U.S. market as people cut back on sweet, fattening drinks in recent years. The beverage market is more fragmented, with new choices materializing. Coke is pushing to broaden its lineup with non-fizzy brands, but its lifeblood remains soda.
Behind its perpetually sunny marketing facade, Coke in recent years has spent enormous corporate energy rearranging internally and retooling operations to deal with new marketplace realities.
Onto the stage now steps Quincey, a British-born, 21-year Coke veteran who is expected to bring new ideas and vitality.
His tenure didn’t start quietly. In what was essentially his first act as CEO, Quincey used an earnings call with financial analysts to announce job cuts that will hit the headquarters staff in Atlanta hard.
The company plans to eliminate 1,200 jobs this year from a pool of 5,500 corporate positions. The cuts are part of a plan to save about $800 million through 2019.
Quincey said the cuts are “clearly a painful process,” but necessary. He said job decisions will be made “as fairly as possible,” but also with “speed.”
Quincey said the plan is to use about half of the savings to speed investment in new products and marketing, and to restore Coke’s revenue and profit growth to 4 percent to 6 percent per year.
“There’s an acceleration we’d like to see,” Quincey said.
“I don’t think we’re broken, but I don’t think we’re where we need to be.”
While soda sales are an obvious sore spot, they aren’t Coke’s only issue. Assessing the company’s fortunes from the outside has been complicated in recent years by an overhaul of bottling operations.
Coke cites evidence of success: Despite weak volume stats, revenue in Douglas’s North America unit is up almost 11 percent in the past three years. Pre-tax profits are up almost 15 percent over that time.
The overhaul has been costly, though. Corporate debt has skyrocketed in recent years.
Coke’s revenue has slipped for the past four years — from $48 billion in 2012 to $41.9 billion last year —in part because of the accordion effect of the bottling overhaul.
The 130-year-old company’s star has also faded a bit in other ways.
In 2007, Coca-Cola was the most valuable brand in the world, according to London consulting firm Brand Finance, which ranks brand values annually, based on its own calculations. Now it’s 16th in the U.S. and 27th in the world, according to the firm’s latest list, well behind companies like Google, Apple and Amazon.com.
The biggest of the company’s problems is that people are simply less likely to reach for a soda than in the past, and there’s little indication that the trend is fleeting.
Coca-Cola’s “megabrand” sales volume — Coke and its variants — fell almost 5 percent over the past three years in the U.S. and were down almost 1 percent worldwide, according to company filings to the U.S. Securities and Exchange Commission. Those core brands account for nearly half of sales volume.