For many people, making a significant change in their life requires them to hit bottom. They have to reach a low point of some sort where the drawbacks of continuing down their current path are so severe that they overcome the addictions or behavioral tendencies that have taken them down their current path.
I’ve discussed my own personal finance bottom on here many times. For me, it came one April afternoon when I realized we didn’t have enough money in our checking account to pay the bills that had come in the mail that day – and there was no longer any reasonable way to borrow ahead on a credit card to make things work for another month. I got depressed and as I rocked my infant son to sleep that night, I realized that I just couldn’t continue along that path any more.
For me, that was the point where the drawbacks began to outweigh the benefits of my lifestyle. My spending-heavy choices might have created some short-term fun in my life, but when I started comparing it to the pile of debt I’d have to pay off, the dangers of defaulting on that debt, and the choices (such as my job) that were forced on me because of a constant need for more money to feed that spending need, it became clear that I needed to change.
Although the pile of debt was certainly real, it was the threat of much worse things coming down the road that convinced me to change my ways. I didn’t lose my credit rating, but I was afraid of losing it. I didn’t lose my ability to care for my child, but I was afraid of it. I didn’t lose my marriage, but I was afraid of it.
This is often referred to in recovery programs as a shallow bottom or a “high bottom.” I had seen some negative effects, but the truly heinous effects were coming and were close enough that they frightened me into change.
For some people, a shallow bottom is all they need to bring about change. That was certainly the case for me.
On the other hand, some people need a deep bottom in order to shake them into change. For some, defaulting on debts might do it. Bankruptcy might do it. Having their home and automobile repossessed might do it. It depends heavily on the person and how psychologically attached they are to their current lifestyle.
So, how does this apply to you? Almost everyone reading this has already reached their bottom. It might have been shallow – for some people, it’s very shallow. It might have been deep. The point is that something has steered you onto a good financial path.
Now, many of you can look around your life and see people that are on a destructive financial path. I get emails all the time from people worried about their parents or their brother or their niece or their children and how they seem to be heading down a financially destructive path.
Here’s the truth, though: you’re probably not going to be able to help them much at all until they reach their bottom, whether it’s shallow or it’s deep. You don’t know when or what will cause them to reach that bottom.
Even worse, offering them financial assistance before they reach that point will almost always just serve to delay their bottom. It won’t change their choices. It won’t change their eventual path. It’ll just make the current situation a bit easier.
In those moments, offer non-financial help. Listen to them. Give them a meal at your home. Offer advice if they ask – or even a bit of advice if they don’t just so those ideas are floating around for the time they need them.
You’ll know when they reach bottom. Their actions will show you. They’ll make positive choices with their time and with their money. They’ll be focused on conserving money rather than spending it. They’ll be happy about paying off debts, not about the newest thing they’ve bought.
If you want to offer financial help, that’s the time to help a little bit. At that point, it’ll mean a lot more and have a much greater impact on the long term. The thing is, once they’ve reached this point, they probably won’t be asking for your help.
This general story matches, in some way, almost every financial turnaround I’ve ever seen. In fact, it matches almost every path of destructive addiction or behavior that I’ve ever seen. You’ve got to wait for that bottom and you’ve got to hope that the bottom isn’t too deep.