When a family member asks for money, most of us want to help. The reasons why can be complex: not only is helping family something that most people just do, but most of us don’t want to be the sort of person who doesn’t help family, either.
But the simple fact is that offering a handout isn’t always the best solution. There are plenty of people out there who have gotten burned by family members asking for money — there are situations that turns into a painful conflict, and there are situations that doesn’t actually lead to a family member working to get to a stable financial standing and plenty of other frustrating situations. It’s worth considering alternatives before simply pulling out your wallet. Here are five.
5 Opportunities to Help Family Members
- Teach your relative to fish. You don’t actually need to head out to the nearest river, but if your relative is in a position where a little more information could help more than money, then provide it. Talk through the situation and see if there’s something that you know — especially since you may have read more about personal finance — that could help. Some financial situations grow out of a lack of knowledge more than a lack of cash. Simply knowing that you can request changes to your credit card can be a big leap for some people. Provide some of that financial education if it’s needed.
- Offer a connection instead of cash. The situation may mean that your family member has a short-term need for cash, but a long-term need for something bigger (like a job). Ask around your network to see if you’ve got a connection that can help with that long-term fix. Introductions can be just as valuable a currency as stacks of dollar bills.
- Provide an opportunity to earn the money. For many families, problems come out of short-term loans that don’t get paid back or gifts with strings attached. If, instead, your family member has a way to earn that money from you, offer that instead. Exactly what project you can offer depends — maybe you need some help with a home repair project or you have something a little more professional that your family member can work on — but the fact that the money is earned, rather than given can be surprisingly important.
- Invest in your family member. The cost of taking a class or starting a side business can be beyond what your relative is asking for, but will likely have a much bigger impact on their own abilities to handle money troubles in the future. By investing in that relative’s future, you can be doing a much bigger favor and ensuring that you don’t get asked for money again.
- Say ‘no’. You may face a request for money where the best thing you can do is to say ‘no’. If you find yourself faced with a relative who routinely needs money and hasn’t taken the initiative to fix underlying issues, telling that person you won’t help (at least financially) can be a wake up call. Just be sure that a wake up call is the best thing you can offer, first. It’s also helpful to be able to offer an alternative to that cash. For instance, if a family member consistently needs rent money, refusing to offer cash, but offering your spare room might be a reasonable alternative. Of course, you’ll want to carefully consider the impact of any alternatives that you offer.
Don’t be afraid to sit down and talk to a family member who is asking for help. While money always seems to be the easiest way to solve a problem, you may be able to find a long-term solution that guarantees that family member won’t need future handouts if you actually know what the problem is in the first place. Be clear what your goals are with offering some other opportunity: you don’t want to wind up the relative that everyone goes to for help of every kind, of course.
You shouldn’t be surprised if a lot of these opportunities still require some financial help from you. If you’re helping a family member find a new job, they will still want to keep the bill collectors away from their door in the short run.
David’s Note: Thursday’s advice is sound, but I won’t lie to you – trying to help them rather than just giving out money may be even harder. It will take a commitment on both the giver and the receiver, and you might even get into an argument with the person who needs help. However, giving them the ability to help themselves is the ultimate (and the only viable) gift you can ever give them, and as a relative, you can help!
Have you ever tried helping a relative get out of financial troubles? Any tips or stories you want to share?