Oct 4, 2013

8 Ways to Motivate a Paycheck to Paycheck Family Member

So you have a black sheep in the family you love very much.  Worried that they'll go broke and hit you up for money one day?  Want to do something NOW to help them?

For the last few months, a client and I have corresponded via email about investing.  He had several breakthroughs with discovering the 3 fund portfolio at Vanguard, and has become an avid reader over at the Bogleheads forum.  He has managed to get his fiscal house in order and asked what the best way to talk about money with a family member is.

In his case, it was his brother.  You know... the "I can't take it with me when I die, so I'm going to live paycheck to paycheck just to make sure I spend every dollar I've got" kind of guy.

So what's the best approach to pointing this loved one in the right direction?

1. Buy Them a Book 

Wrap it nicely and make sure it's an easy read... something like The Coffeehouse Investor. . . a book that spends more time talking about hiking and baking pumpkin pie than investing, because quite frankly, you know they're not going to have the patience to finish the book without falling asleep several times.
2. Buy Them a Cup of Coffee

About a week later, take them to a coffee shop and buy them a cup of coffee.  Here are a few pointers to create an effective framework for the conversation.
  • What was your favorite aspect of the book?
  • If you had one day to live, and you needed to explain this book to your 18 year old son, what would you tell him?
  • Do you believe in "paying yourself first?" 
3. Send Them Emails with Helpful Insights

Check out my post Do Not Delay, Start Investing Now for some raw numbers on the dangers of putting off saving.

4.  Offer to take a look at their 401k plan at work

If they don't have a 401k through their employer, help them set up a ROTH IRA if they don't already have one, as well as a monthly direct deposit.

5. Call Them

Ask What They Would do TODAY if their car broke down, were fired, got diagnosed with an illness, and were late on their mortgage payment.  Use this conversation to highlight the wonders of having an emergency fund.

6. Find Out What Their Dreams Are

Be sure to point out how they can achieve these dreams in terms of a monthly deduction into their retirement account (or 529 plan if their dream consists of sending their kids to college).

7. Ask Them to send you an email detailing the definition of "Financial Independence."  

Save this email to your computer, and re-send it to them from time to time.

8. Lastly, assist them in identifying a definite major purpose.  

Ultimately, our goal is to get them to write down their definite major purpose with the below structure, and place it in the center console of their car to read prior to work, and on their bathroom mirror to read just before bed.

I'll close this post by praising you for taking the initiative to help your loved one achieve financial success, and have faith you'll succeed with this task!

How to Develop a Definite Major Purpose

*Credit: Napoleon Hill Foundation

(from Think & Grow Rich, chapter on Autosuggestion)
Create a definite plan for carrying out your desire, and begin at once to put this plan into action. The instructions given in connection with the six steps in the chapter will now be summarized, and blended with the principles covered by this chapter, as follows:
  • Go into some quiet spot (preferable in bed at night where you will not be disturbed or interrupted, close your eyes, and repeat aloud (so you may hear your own words) the written statement of the amount of money you intend to accumulate, the time limit for its accumulation, and a description of the service or merchandise you intend to give in return for the money. As you carry out these instructions, see yourself already in possession of the money. For example, suppose that you intend to accumulate $50,000 by the first of January, five years hence, that you intend to give personal services in return for the money, in the capacity of a salesman. Your written statement of your purpose should be similar to the following:
By the first day of January, 20.., I will have in my possession $___,000, which will come to me in various amounts from time to time during the interim.
In return for this money I will give the most efficient service of which I am capable, rendering the fullest possible quantity, and the best possible quality of service in the capacity of salesman of ___ (describe the service or merchandise you intend to sell).
I believe that I will have this money in my possession. My faith is so strong that I can now see this money before my eyes. I can touch it with my hands. It is now awaiting transfer to me at the time and in the proportion that I deliver the service I intend to render in return for it. I am awaiting a plan by which to accumulate this money, and I will follow that plan, when it is received.
  • Repeat this program night and morning until you can see (in your imagination) the money you intend to accumulate.
  • Place a written copy of your statement where you can see it night and morning, and read it just before retiring, and upon arising until it has been memorized. Remember, as you carry out these instructions, that you are applying the principle of autosuggestion for the purpose of giving orders to your subconscious mind.
Remember also that your subconscious mind will act only upon instructions which are emotionalized and handed over to it with “feeling.” Faith is the strongest and most productive of the emotions.



  1. Excellent tip, Thank god I don't yet have a black sheep.I think these points should go well with any teenager at home.

  2. I have my brother before that was a black sheep in our family and thanks God he was changed and I hope it will be forever. I always talk to him, it was a not right because he was my older brother but I'm the one who gave him advice anyway I don't really mind it. I also use the law of attraction and it is helpful for me.