5 financial planning tips to help those in personal finance denial

Witnessing this, it becomes tough for the rest of us to identify who is in need of help and to toe the line of a difficult financial conversation. People choose denial because they do not want to talk about their financial problems. They do not want to experience the negative emotions of regret, shame and guilt. They will avoid those who would remind them of their reality at all costs. Such are the dangers of denial. There are five things others can do, when they find close friends or relatives in financial distress, they may need help but may live unaware of their real situation.

First and foremost, cross check your facts before speaking to the distressed person/s. Be genuine in your desire to lend a helping hand. Gossip mongering will not help.

Get an accomplice, someone close who can work with you. The father, wife, friend, anyone with the knowledge of the situation who will readily hold on to your offer for help, if they know you are genuine. They will help you with facts, and guide you with information, and also act as your conduit to break the barrier and get the affected person to listen.

Have workable solutions on hand. No one likes lectures and strictures; worse, don’t indulge in the blame game. Help convert the expensive loans through credit counselling; enable broadening the network through referrals; identify buyers for assets that can be liquidated; keep focus on actionables.

Do not speak about the person’s situation to others. Being the one that they can confide in and trust is what will help them come out of denial and begin to address the real issue. This judgement or a fear of it is exactly what would have got them into denial in the first place.

Do not blindly assume that you have to chip in money or that help just means financial. Don't go hunting for donors to bail out the person. Protect their self esteem while not becoming a scapegoat yourself. Sometimes, even just moral support can mean a lot and enough.