How to Help Loved Ones in a Financial Crisis

by Tracy · 8 comments

Seeing a loved one go through a financial crisis can be almost as stressful as going through one yourself. For most of us, the reality is that there is only so much direct help we can offer without putting our own security in jeopardy. The good news is that there are ways that you can help your friends and family members find the resources that can help them get back on their feet.

Help Them Find Help

It’s not always easy to know where to turn to for help. Worse, being under constant strain can affect our thinking and problem solving skills. One way to help your loved ones is to assist them in finding resources in their community that can offer assistance.

A good place to start is calling 2-1-1. In many communities, dialing 2-1-1 gets you access to a confidential resource center that can put you in touch with agencies that can offer assistance with food, housing, medical services and more. To find out if your community has a 2-1-1 line, you can search this database.

Many communities also offer this service online. If yours does, it will be linked to their entry on the database above. Local churches, community centers, libraries and schools are also good sources of information on where to find help.

It is best to allow your loved one to do as much of the calling and legwork as is possible. It can be intimidating to call and ask for help, but in the long run it will go a long way towards ensuring that they stay productive and proactive. It’s easy for people in crisis to avoid their problems and allowing them to do so for too long could cause learned helplessness and make the problem worse.

Other Ways that You Can Help

Giving cash is probably the most direct way to help, but it’s not always the best way. Use your best judgment on how much, if any, monetary support that you want to offer and don’t feel guilty or pressured to do risky things like take out a loan or drain your retirement accounts to support a loved one. Jeopardizing your own financial well-being won’t help anyone in the long run and doing so could make a bad situation even worse.

Many times people in stressful situations will withdraw from their loved ones. Do make a special effort to reach out and find inexpensive ways to spend time together. This will help keep their spirits up and will remind them that many people love them and are rooting for them.

Finding the line between helpful and pushy is hard for some people. By the same token, it’s easy to become defensive and overly sensitive while under stress. Don’t allow yourself to be abused or attacked, but do try to be understanding if they are not as enthusiastic about your tips, leads or advice as you hoped they would be.

Do be clear and upfront about what you can and can not do for them. Often, people on both sides have the best intentions but it turns out badly because of poor communication and each expecting the other to speak up or take the hint. It’s better to politely refuse a request than for the situation to blow up down the road because of resentment.

It’s a wonderful idea to offer groceries, extra clothes and other household goods but be careful that in your enthusiasm you don’t inadvertently insult the recipient. I remember once receiving a bag of dusty, girl’s clothing several sizes too big for my little boy from a boss’s wife when I was a very young, working mom. While I’m sure it was meant well, it also hurt my pride quite a bit during a time when I was already feeling a bit “less than”. While you are not responsible for other people’s feelings, it’s a caring idea to put some thought into how useful your gift will be and how it will be received.

Help Yourself

It’s easy to let yourself become stressed out thinking about your loved one’s problems. Nobody likes seeing the people they care about struggle and the natural instinct is to want to help them as much as you can. While you can and should help, don’t forget that your needs are important too, and it’s okay to take care of yourself first.

While it’s a virtue to be understanding and forgiving, don’t allow yourself to be taken advantage of, feel pressured into doing things you aren’t comfortable with, or really can’t afford, both in terms of time and money. Refrain from being overly judgmental, but be practical about offering help to those who have shown that they can’t be responsible.

Your Turn

Have you ever helped a loved one in a financial crisis or been the one who needed help? What tips would you offer others in the same situation?

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{ 8 comments… read them below or add one }

Cassie June 20, 2011 at 5:17 am

One of the biggest obstacles a family in financial crisis faces is stress. Taking the kids to the park for a few hours allows the kids some time out from under the cloud of stress and gives the parents an opportunity to focus on exploring solutions.
A gift of a family outing to dinner or a water park helps the whole family remember that there is life past the current crisis and that they still have each other.

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marci357 June 20, 2011 at 12:11 pm

1.Don’t loan more than you can afford to lose. If a loan, fill out the paperwork and the interest rate and the expectations.
2.Don’t gift more than you can afford to spend. If a gift, write a note that says this is a gift and not to be repaid, so there are no hard feelings later on. Keep a copy for yourself, in case you need to be reminded later.
3.And don’t throw money after a dead horse… meaning, if a situation has no way out anytime soon, like a foreclosure on a house or a loan on a vehicle because the payment is ALWAYS going to be MORE than they can afford to pay even if they get back on their feet, then cut the losses and let it go. You might want to explain your reasoning, but never feel obligated to throw money away!

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Joe June 20, 2011 at 6:32 pm

Unfortunately, there are many, many people who fall into these cycles of financial hardship. I have family members who just couldn’t or wouldn’t learn their lessons the first (or second time) and kept getting into trouble. It’s frustrating to see that.

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Dan W. June 21, 2011 at 9:34 pm

A close friend waited tables for two years, 14 hours a day, to help pay her parents’ rental. Her dad doesn’t want to work after losing his business. Hers is a classic example of helping loved ones who aren’t helpless at all. While I’m amazed by her compassion, I’m sure there’s a better way to help without sowing dependence and idleness on her father’s part.

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Joe from accounting June 21, 2011 at 10:48 pm

Where to begin? I’m living with my folks who are on the verge of a divorce after being together almost 30 years. Do to a work injury my father is now permanently disabled and has not received a disability check yet. Mom, she works full time but just makes ends meat. They’re trying to restructure their home loan but things are so moving slowly. In the meantime in order to keep them a float I’m pouring my saving into them; I was saving for a down payment on a house. It’s tough I’m suck in between a rock and a hard place, how much do I give to them and when do I say enough?

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Traci June 23, 2011 at 1:18 pm

Except for two family members, any money I give to someone is always a gift. I “loaned” money to someone in college who I thought was a solid friend and it destroyed the friendship. The friend felt guilty when payment wasn’t forthcoming and didn’t want to see me until payment could be rendered. It was an expensive lesson…it cost me $200 and a good friendship.

Helping is wonderful, but you have to take your own situation into consideration (no matter how hard that may be). Refrain from making your own word void in attempts to help friends. In other words, don’t help your friends/family to such an extent that you can no longer pay your own bills as you promised the businesses that you would.

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Slinky July 18, 2011 at 3:31 pm

Thanks for the link to 211! That’s a fabulous resource. I’ll be talking to my grandparents about some of the senior assistance programs I found there.

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Alexandra June 15, 2012 at 4:37 am

I have been at both ends, giving and receiving. Neither my friends/family nor I calculated interest or anticipated to get the financial help returned. We helped because our loved ones were stuck and were happy to see them getting out of it. I was living with a family member who could not find employment for over two years. She is a very resourceful person and proved her survival skills being a single parent, learning a language on her own, and put herself through university and college. Under the present economic climate, and in certain regions, even small jobs are hard to come by. I am glad that I was able to open up my home and provide her until she got retrained (one more time) on the government grant. As for the expenses, I don’t have much, but I am paying my home bills anyway, if I cook there is always enough for one more person. The family together helped with bills and none of us became financially unstable. We have a very small family working on average pay. She may be able to pay us back or not, but that is not the point. Our family bond became stronger and we are ALL happy to see her doing well now. She can always can pay forward to others and as so she does. But without our help neither her life nor those who is now saving this would not be possible. She retrained as a practical nurse, at the age of fifty, not at all an easy job. Later she paid her way (beside work) to obtain higher education in the nursing field.

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