When you love someone is is hard to see them suffer. This is especially true when you know their financial woes could easily be avoided by a little financial knowledge and a some wise choices.
But, how do you force someone to gain financial knowledge? How to you help someone to make wiser choices? How do you minister to family members who keep making bad money choices?
A guide for helping family members with money problems
1. Remind yourself of your own imperfections
We all have strengths and weaknesses. You might be financially fit while someone else is physically fit. You might sit at home scheming ways to talk to them about their finances and they might sit at home thinking of creative ways to approach you about your weight problem.
We are motivated to deal with things that we think are important. Others often will not think something is important just because we think it is important.
Since none of us a perfect and have a completely balanced life we should interact with our family with a certain degree of love, sympathy, and patience. Change does not happen over night.
2. Evaluate your relationship with the family member
Here’s a good rule of thumb. The younger you are in relationship to the person with the money problem the less direct you should be.
For example, if your parents have money problems they confronting them face to face is likely not going to be the best approach. In the case of parents you should deal with them indirectly or serve as an intermediary to help them.
How do you help parents indirectly? Share “I” and “we” stories. Tell you parents, “We just paid off our last debt and it feels great!” Say, “We are actually saving money for kids’ college so we feel a sense of accomplishment.” You can even put a financial book on the coffee table when they come over to visit. We’re not talking about being manipulative here, but simply about creating opportunities to where your parents can invite you to talk to them about finances.
Ho do you serve as an intermediary to help family members with money problems? In this case you would approach someone that family member trusts and ask them for their help. Seek out a church member who that family member respects. Find a co-worker that the family member trusts. Talk to an older relative who has a good relationship with the family member.
When people don’t respect someone they often will not listen to what they have to say.
3. Don’t try to help money problems just by giving money
Most money problems do not come from a lack of money. If that was the case money could solve the problem. Instead, most money problems come from an inability to handle money and make wise money choices. Until money management issues are addressed no amount of money will help. Remember, money does not solve money problems.
Therefore, when giving money be sure to also attach requirements that actually help the person improve their financial situation. Require them to read The Total Money Makeover. Ask them to do some work in exchange for the money. Do something to help solve their money management problems not just their money problem.
4. When it comes to lending to family proceed with caution
When you lend money to someone your relationship with them automatically changes. You must have guidelines when lending to friends and family.
I have not lent money to physical family members, but I have lent money to spiritual brothers and sisters. I can testify that when someone has defaulted on a payment to you Christian love is harder to extend. Even when a person is repaying the loan on time the dynamics change. Every time they see you at church they want to explain something about the loan – “I’ll be sure to get you your next payment on Saturday instead of Sunday, because I’ll be out of town on Sunday”.
If your considering cosiging for a family member you should also proceed with caution.
Photo by shahram sharif.
What do you think is the best way to help family members with money problems? How did someone help you that was effective?
{ 12 comments… read them below or add one }
Number 5: Pray for them, and if willing, pray with them. Praying for God’s wisdom in our lives, including financial decisions and practices, should actually always be the first step. But other than that, there were some great tips on how to advise family about financial handling. Thanks for the article!
Great article. This is a tough subject. I’ve got parents who have struggled with being smart with their money. Luckily we have the type of relationship that I am able to talk to them about it, but it was still hard. Thankfully they are now working Dave Ramsey’s baby steps after I got them the total money makeover.
You are right that sharing your victories is really helpful. In an article recently I shared how my wife and I had paid off 21k in college loans in the last 8 months. my dad was like wow that’s awesome, we’re going to pay off our car next month. Hopefully they can keep it up and get debt free soon as well.
This is a hard topic. I struggle with how to help out family members (and close friends) financially. I don’t mind giving some money when it helps, but I worry about their over-all financial attitude. I will put some of these tips to use, hopefully I can help them out!
Don’t loan them anything that you would not give them as a gift. If they don’t repay, just tell them you are making it a gift (no strings). Then, don’t loan to them again. I like your suggestion of having them work for it.
I really like the fact that you said #3 “Don’t try to help money problems just by giving money” Your right if that were the case then all we would need to do is have the Government print up a bunch of money and throw it at all of us! That strategy obviously does not work! If the family member is open then we got to help them get to the root of the “Money” problem!
We’ve decided to not loan money to family members/friends. We gift money when someone is need and expect nothing in return. The last thing I want is a rift in the family over a loan.
My mother-in-law has money issues. We, and her 5 other kids, had to pitch in the pay her rent at the end of last year. It hurts because no one wants their parents on the street, or struggling with money…but no one has come to a conclusion on what to do about the situation.
This is a really sensitive issue. I immediately think of the saying, “The teacher will appear when the student is ready.” We want to help our family members and friends with money issues, but if they are not ready to receive help…the advice will fall on deaf ears. I think the best thing to do is be a good example, and be ready to help when your family/friends are ready.
I have found that adult family members do not want to be told what to do with money. My brother won’t even tell me how much money he makes or how much debt he has. So I won’t ask, ever again. Lesson learned.
I agree it’s better to gift the money to family members. However, I’ve done this many times over the years with one family member and I’ve come to believe that it doesn’t solve the problem. I agree with #3, their lack of money management skills must be addressed.
My parents have major money problems they have always been poor money managers and it has gotten worse as they have gotten older. They have enough money to live comfortably however they mismanage it (cruises, clothes, home renovations etc). Anyway I was just talking to my Dad the other night on the phone and they do not have enough money to pay their IRS taxes. I refuse to loan them money….I am not sure how all this will go but I will not enable them.
Are there any organizations out there that give money to pay off debt?
if not, what would be a good debt program to contact so i can finally get rid of all this debt? Thank you.
What if your family member is approaching retirement age, and has no savings whatsoever, but tithes regularly? Coupled with the fact that they believe that they will be “raptured” in the next few years so it won’t matter? What if the preacher of the church they attend is preaching the same message? Is there a way to tactfully tell them that they are delusional? Or should I just not bring it up at all?