What do you do when you think your friend is making a HUGE mistake?

I have a friend, who is married with two children. They live in a nice suburb, in a 2700 square foot house, new construction, 4 bedrooms, quarter acre. Really nice home.

Problem is, her husband spends money like it's water, and always has his eye on the next big thing. They fight about it all the time, but he usually manages to weasel his way out of her. Unfortunately, she doesn't have much of a backbone.

A few years ago she transferred jobs from a small firm to a large, well-paying firm job. She tripled her salary, but is also working about 10 hours a day. He's a school-teacher. I have a general idea of what they make, probably a little under $200k a year.

He's been talking for months now about buying a new house - something that will "WOW" his friends. She kept saying NO, we cannot afford it. But, she calls me last night to tell me they signed a contract on a $700k home. An acre of land, over 4500 square feet.

She told me she has NO cash reserves - nothing. They are banking on using hte profit on their current home to pay for the down payment. Problem is, they bought their current home at $300k, and are selling for $340k. Most of that profit will go towards closing costs and fees, but she wasn't listening to me.

She has two kids in daycare, two brand new cars that they are leasing, oodles of credit card debt and no savings.

I honestly don't think they will survive, and I'm so worried about her getting in over her head, just to appease her husband's appetite to spend money.

What do I do? Do I sit her down and tell her what I honestly think? Or, do I back off and watch them make the biggest mistake of their lives?

Message edited 8/2/2007 8:26:35 AM.

Re: What do you do when you think your friend is making a HUGE mistake?

Honestly, I would stay out of it. I think when it comes to friends and thier money you are crossing a line. I understand your concern, but will she? She might take offense to it and in return it can ruin your friendship. Its a hard call. I hope things work out for the for the best.

Re: What do you do when you think your friend is making a HUGE mistake?

I would say my peace but ultimately, she needs to wise up, you cannot "save" her if she does not realize that this money situation is only going to get worse....

Re: What do you do when you think your friend is making a HUGE mistake?

I would give her some sound advice and then let it be. She needs to be the one to not give in to her husband's habits. Since it sounds like she makes the bulk of the $$$ in the family, I'm assuming her name and her husbands are on all the credit accounts and if I was her, I would have not signed that contract for a new house. Sounds like they need a professional third party counselor to help them out.

Re: What do you do when you think your friend is making a HUGE mistake?

I stay out of it, I have someone right now in my life who I think is making a huge mistake, but I'll keep quiet about it because I feel it is their mistake not mine

Re: What do you do when you think your friend is making a HUGE mistake?

Uch. I guess I kind of knew in the back of my mind, it's really not my business, not my life, so I shouldn't get involved, and it will only push her further away. But, it really worries me SO much. I know that they won't be able to cover their expenses. It would be one thing if they had some padding in reserves, but the fact that they don't. I worry about them, and the kids

Re: What do you do when you think your friend is making a HUGE mistake?

tell her to put HER money in her name ONLY.

Re: What do you do when you think your friend is making a HUGE mistake?

If she was a really close friend, I would tell her my honest opinion. Of course I would be very careful how I worded it, and I would finish up with "I'll support you no matter what you decide, but I wouldn't feel like a friend if I didn't let you know how I felt."

Re: What do you do when you think your friend is making a HUGE mistake?

Re: What do you do when you think your friend is making a HUGE mistake?

I say my piece in a round about way, like do you think you guys can afford it etc. I have a friend in my life that has been making some really bad decisions for awhile. I said my piece in a round about way and left it at that. Now months later she is starting to realize what I said was right and now has to repair all the things that she did wrong.

Re: What do you do when you think your friend is making a HUGE mistake?

I think you need to let her make her own mistakes unfortunately. Maybe the house will be the biggest mistake, maybe not.

If they hit bottom, hopefully it won't be such a long way down.



Oh & it's probably unnecessary to say this but don't lend them money.

Re: What do you do when you think your friend is making a HUGE mistake?

Posted by nrthshgrl

Oh & it's probably unnecessary to say this but don't lend them money.

Message edited 8/2/2007 9:40:42 AM.

Re: What do you do when you think your friend is making a HUGE mistake?

I would say something like, I'm sure you are doing what you can afford and have thought this out.

But ultimately, its the kind of thing that IMO, if she didn't ask for your opinion, I wouldn't give it. She is aware of her DH's issue with money but she still gives in. She isn't going to suddenly get a backbone and change because you thought they couldn't afford it.