When most people think of an “intervention,” they friends and family gathered to demand a loved one seek treatment for alcohol or drug abuse. The person, overwhelmed by the outpouring of love and concern, hopefully agrees to receive the life-saving treatment.

The same principles used to intervene in substance abuse can also be applied to someone whose decisions regarding personal finances are becoming destructive and beyond control. A loving confrontation by a small group of people can help someone regain control of problems such as compulsive shopping, gambling, taking excessive financial risk, and failure to make necessary plans for the future, such as being retirement ready. All it takes is a little courage, a little planning and a lot of love.

When is a Financial Intervention Needed?

There are two primary reasons that interventions take place. First, a loved one has lost the ability to make healthy decisions and is on a path to self-destruction. Second, the strain a destructive lifestyle has on close friends and family members is beginning to take its toll.

The most common reason for a financial intervention is compulsive and out-of-control spending, which are two very similar but simultaneously different things. Compulsive spenders literally cannot control themselves from making purchases, typically due to some type sort of pathological disorder. Oftentimes, these individuals have garages and closets full of unopened and unused purchases accumulated over many years.

Out of control spenders, on the other hand, may makes purchases because they finding shopping stimulating, they believe it will help them find inclusion or show affection, or have faulty beliefs about what their purchases will accomplish. The biggest result of all this behavior is mountains of consumer debt that can make meeting daily expenses financially impossible.

Another common reason for a financial intervention is a high level of risk-taking behavior. These individuals may gamble excessive amounts of money on obviously risky propositions, often demonstrating a belief that “they’re due to hit it big.” They often borrow large amounts, whether from a bookie or a margin account at a brokerage firm, in an attempt to “just get back to even.”

Of course, there are times where severe financial problems are symptomatic of another root problem. This always needs to be evaluated so that precious time and energy are not wasted doing an intervention for something that won’t fix the core problem. This is often the case with drug addicts who have done a good job otherwise concealing their problem, aside from the fact that they are burning through cash and often borrowing or stealing money.

The Purpose of a Financial Intervention

One of the biggest misconceptions about a financial intervention is that it’s an attempt to demand a change in behavior. If the intervention takes this tone, the person will usually feel judged, rejected, and misunderstood and will usually shut down, withdraw from reason, and retreat to arguing. These types of interventions are most often unsuccessful.

In reality, a financial intervention is an admission by a group of people that they have been powerless in their attempts to stop destructive behavior. They have individually expressed concern, confronted, and even threatened the individual, only to fail miserably in igniting change in the person’s behavior. Thus, because of this helplessness, they’ve made a decision as a group to stop making the problem worse through their enabling behavior. More importantly, they want to provide access to outside help if the person is willing to accept it.

These individual realizations, group decisions, and the offer to help are all delivered in the midst of expressing a deep love or appreciation for the person. The need for change is expressed not in anger or disgust, but in sadness and loss. For someone struggling with destructive financial behavior, it can be a life-changing thing to have a room full of the most important people in your life tell you how much you mean to them and how worried they are about you.

It’s within this context of being loved and accepted, instead of being shamed and rejected, that interventions succeed in their final objective—to offer outside help. Because family and friends either lack the knowledgeable or are too closely involved to truly help, the involvement of a therapist, debt counselor or financial planner is crucial.

How to Conduct a Financial Intervention

If you determine that someone is in need of a financial intervention, your first question is whether you should employ a professional interventionist. The advantage is that such a person will help streamline and organize the process, providing valuable resources along the way. The disadvantage, of course, is the cost of hiring someone. As a rule of thumb, the more serious the problem, the more you’ll want to consider professional help. It’s likely that a 24-year-old with $20,000 in credit card debt doesn’t require a professional interventionist. However, a 50-year-old with $100,000 in gambling losses and a history of compulsive gambling probably does.

A financial intervention should include three to eight people that matter most to the person struggling with negative financial behavior. These individuals will hold the most sway in breaking through someone’s shell of denial and resistance to outside help. People who are strongly disliked by the person who needs help should be excluded, simply because their presence may cause a retreat into defensiveness or anger.

The chosen group of people should gather at a private location while one person finds an excuse to go to that location with the person being helped. The subject of the intervention is naturally going to be surprised, frightened and perhaps angry about what is going on. With this in mind, it is important to elect one spokesperson from the group who will do most of the talking.

This spokesperson will explain the reason for the gathering. They should emphasize that this is not about beating someone up, but about addressing a specific problem. The subject will then be informed that each person will briefly say what they need to say, that there will be an opportunity to respond at the end and that the whole thing won’t take more the an hour.

At this point, each person in the group is going to read an “impact letter” about the person and the problem. The letter should be no more than two pages and should answer the following:

• Why specifically this person matters to them
• How the problem has affected themselves and others
• A love-based plea to accept help

Ideally, no one besides the group spokesperson says anything besides what is in their letters until afterward.

After all the letters have been read, the spokesperson shares the two ways in which the group is going to help from this point forward. First, the group is unwilling to continue to enable the person in making financially poor decisions. This may mean that they will not, for example, loan the person money, accept extravagant gifts or engage in discussions about penny stocks with the person for which the intervention is being held. Whatever the old system is, the individuals in the group stick together in their mission to stop being part of the problem.

Second, the spokesperson is going to inform the subject of the type of outside help that has been arranged and ask the subject of the intervention whether they will accept this help. Anticipating a positive response, the group should already have the first appointment set a couple of hours after the intervention.

The Bottom Line

Many successful financial interventions result in the person saying “no” to the offer for help, only to come back and seek it weeks, months or even years later. However, this only happens when family and friends stick to their guns and refuse to help the person continue in destructive patterns after the intervention. Through those loving refusals, individuals with a problem are eventually forced to deal with the reality of their choices. It’s then, if the offer of help still stands, that they often accept it.