I believe there's a time and a place for giving, and receiving, harsh financial advice. For the person giving this kind of advice it may be very difficult, and it's rarely pleasant. For the person receiving this kind of advice, it's almost never pleasant.
No one really enjoys being told that what they've been doing is unsatisfactory. One time I remember very clearly was during graduate school, and my faculty adviser at the time told me that he wasn't happy with my progress toward my degree. I was procrastinating in finding a research group, and I probably knew this. This kind of advice was exactly what I needed at the time, though, and looking back I see that my adviser said it to help me succeed.
The same thing goes for financial advice. No one likes to be told that their spending habits will drive them into poverty. No one likes being told that they'll never be able to retire. No one likes to be told that they've made a poor career choice. No one likes to hear that they made a bad home purchase.
Watching someone suffer the consequences of their poor financial decisions is painful, and I don't really know if I would have the guts to tell a person that they really blew it, even if I'd told them all along that I could see where they were heading. It might take a third party to hammer home this kind of advice.
It might just be as easy as handing them a book or leading them to a website. Dave Ramsey is good at verbal shock therapy. So is Larry Winget. Gary North is even harsher, but he's almost never off the mark. I haven't gotten the guts to ask Gary North specific questions about my investments, career, calling, etc., even though I can as a site member. I perhaps know what he'd say, and that's what worries me.
But even if a mule needs to be hit over the head with a board in order to get its attention, at least it works. Harsh advice works because the act of hearing someone else tell you straight what they see encourages you to deal with the problems head-on. There's every desire to turn away from the problems, but owning up to the financial truth, even if it hurts, might be exactly what's needed.
Well if that harsh advice came from a friend, it probably won't be an issue. But from total strangers it might be a different case. This is particularly important when you're dealing with people from other cultures. For instance, Asians are very emotional, you tell them they're financially screwed, its like you slap them in their face*laughs*
Sam
Although it seems like the worst way to let someone know this kind of information, it's always the best. Sometimes being blunt can really help someone get their act together!
I'm a believer in tough love. But, I have found that a relationship is much more valuable then saving someone from bankrupty. If it's someone close to you, keep this in mind. Sometimes it's better that you are not the person to tell them the truth, but as a friend it is your responsibility to find someone else to tell them the truth. Then, you can reinforce the truth and become the supporting friend that they need.
The truth doesn't always set you free, even if it is with a good friend. Just recently I had to tell a friend that her actions were creating a crisis for her. Trust me on the fact that even though she has taken out 2 mortgage loans to spend money on trips and the fact that she lost a job didn't stop her??!!