I was recently asked by a family member, to lend them 10k to help them get out of credit card debt (13.5k). I stopped them right there and said .... let me see your financial records. Are you using mint, what are your cc balances, what are the interest rates, what are your monthly expenses. After collecting all this information, I started up excel and coming up with a burn list of services to modify or cancel. And here, I kid you not [ Amazon Prime, 250/mo car insurance on a 1500.00 car, tv+internet, netflix, audible, spotify, email spam service, dropbox cloud storage, etc]. I got my family member to hang up, call geico and get a quote. They did and dropped their payment from 250/mo to 80/mo +170 ... we went after a few more things, and then came netflix. I suddenly came upon the crux of the debt problem, which was not a lack of income, but big ol' case of deserviness. The conversation stopped right there, forward progress was over, and my family member told me that cutting this out was going to ruin their lifestyle (I pointed out that they had tv and amazon prime, along with hulu and dozens of other services, but no dice). I tried to explain that with their 3k/mo salary, every 30.00 saved was 1% net they were reclaiming and that if they got rid of all the extra crap, they could be debt free in only 6 short months (a whopping savings of 800/mo) if they followed my spending cut outline. This was no good. I followed up the next day and found that w/ 13.5k in debt, they had applied for a 10k loan at 15% w/ a 500 origination fee ... whacking their credit score and instantly bringing them up to 14k in debt. I was ready to cry and frustration and pity because I believed, and still do, that my family member is destined to lose everything, because they don't think they have a problem. This chain of events happened last week. Today this family member posted that they were excited for the Amazon Prime Day occurring tomorrow. I'm glad I gave 800/mo in advice vs 1000/mo in my hard earned cash, but I am feeling like a failure in that I cannot seem to communicate or convince my family member that they need to make a 100% commitment to their debt, or be owned by it in the very near future. I don't want to be negative or super authoritarian, since this particular person responds very poorly to such attitudes. Do you have a similar story? How did you not only lead the horse to water, but make it drink - and buy into it as well?
Notes: I created a nicely colored shared google doc w/ all the data to facilitate describing the paydown and how easy it was to tackle each card and the optimal way to handle the paydown. The sheet also included the expenses, salary, and percentages to show that the spending was eating into 100% of their earnings.