How You Can Really Help Family Members with Their Finances

One of the most difficult things you may ever do in your life is to handle a request from an adult family member for financial assistance. The entire situation, family members asking for money, is loaded with emotional bombshells and how you handle the request can either make or break your family. If you say yes, are you being an enabler and fostering your family members' financial dependency on you? But if you say no, are you being mean and dooming your family member to pay day advance loan companies or other disreputable money sources? Helping family members with their finances is an extremely emotional issue, as well as a financial issue, and needs to be handled very carefully if you wish to preserve both your sanity and your relationship with that family member. I have put together five general guidelines to keep in mind when you are considering helping family members with their finances.

Helping Family with Their Finances, General Guideline #1: Remember you are not financially responsible for your adult family members.

Once a member of your family is an adult, ultimately they are completely and totally responsible for EVERYTHING about their own lives and this includes their own finances. As parents our goal is to raise our children to be healthy, happy, emotionally stable adults who are capable of making their own decisions and handling their own finances. We need to raise them not to need us. While this may be a painful thought, you really are not helping your adult family member by making them financially dependant on you. They will end up resenting you and your help and YOU will end up resenting their financial neediness.

Unfortunately sometimes this goal of helping your family member to be financially responsible for their own lives may not always work out especially if your adult family member has a gambling problem, a shopping addiction, or a drug or alcohol problem. But you must try to remember that YOU are not responsible for any adult but yourself and perhaps your significant other. Anyone who has an addiction can NOT be helped financially since all they care about is fueling that addiction. There is never a good reason to pay for another adult family members' gambling debts, shopping debts (credit cards, etc.), or drugs. They may have to end up either in jail or filing bankruptcy before they get the help that they need. Sometimes the kindest act of all is to let that family member fall on their faces and have no one to bail them out. I realize that this is easier said than done, especially if young children are involved, but you really are not financially responsible for ANY of your adult family members or their children. You may actually have to step in for any young children and their safety and well being but that's another entirely different issue.

If your adult family member has fallen on hard times, you are still not financially responsible for them. It would be nice to be able to help them but sometimes you just can't, especially if it means that YOU will be in financial difficulty yourself. Whatever you do, don't put yourself in a precarious financial position to help out your family members.

The only time you may be able to ignore this particular guideline would be if your adult child is special needs or disabled in some way and then you would want to help them to apply for Social Security Disability so that their financial upkeep would not be YOUR burden alone to carry. There is financial help to be had out there for adults with disabilities.

So remember, you are NOT financially responsible for your adult family members. If they keep coming to you for money, they are going to get the mistaken idea that you are the Bank of Family Moneybags and treat you like you are an ATM machine. Helping family members out with their finances is okay but not all the time!

Helping Family with Their Finances, General Guideline #2: Remember, helping family members out with their finances is okay but...not all the time and not in all situations.

If your adult family member comes to you each and every month for your financial assistance, there is a big problem with how they are managing their money and more importantly, how they are managing their relationship with you. You are a convenient enabler who has allowed yourself to be taken advantage of. How does that make you feel? Is there perhaps some resentment towards the family member who is accepting your financial assistance on a regular basis with no signs of ever stopping? Have you started to avoid answering the phone when your family calls you on the phone because you know that they will be asking for your financial help?

If the family member who needs your financial help has been hurt in a serious accident or had major surgery and has a long recovery period, helping them out of a sticky financial situation is okay. They genuinely may need the financial help until they are back on their feet. But the family member who works full-time, who has a brand new car payment, who gets manicures every month and who has the latest cell phone doesn't need your money, they need their eyes to be opened to the realities of life. Helping your family when they have a genuine need is far different than helping a family member to keep their electricity from being turned off in their million dollar home. If your family member has to use candles for light and take cold showers, perhaps they will be sooner to realize that their lifestyle will have to change. It's easy to live beyond your means in today's society with all of the available credit out there but if there is no one to help that family member financially when they've gotten themselves into terrible debt, perhaps you can help them the most by NOT helping them.

Liz Pulliam Weston at MSN Money says "If financial weaning is necessary, consider ways you can help your child be more self-sufficient." If you decide not to help your family member out financially, perhaps you can help them to either take classes or attend a trade school that will help THEM to increase their own financial potential. Remember that saying, "Give them a fish and feed them for one day but teach them to fish and feed them for a lifetime?" By making the decision NOT to help (enable) your family member with their finances on a continual basis, you may be helping them to stand on their own two feet which will give them a feeling of empowerment. In my experience, it's hard to stand on your own two feet without asking for financial help from family when it seems that your family is just waiting for you to fall on your face and ask for help because they don't think you can do it. And it is hard to believe in yourself when your family doesn't. So help your family members to help themselves before you consider handing them money. And if you decide not to help that family member financially, saying no does not make you a bad person or parent.

Helping Family with Their Finances, General Guideline #3: Remember, saying no to helping your family members financially does not make you a bad person or a bad parent.

The financial mess your family member may have made within their own lives has NOTHING to do with you. YOU have NOTHING to feel guilty about if you say "NO, I cannot and will not help you with your finances. You are on your own and you can handle the situation yourself." As I said earlier, you are not financially responsible for your adult family members and you do have the right to say what you are going to do with your own money. Saying no and sticking to that decision is a very important step in helping your family member. But you can't give in, no matter what! Once you say you won't help, it's important to never give in. Not even if your adult family member harasses or even abuses you, don't give in. I'm sorry to say that you may even have to call the police and have them removed from your home. Once your children are adults, your financial responsibility to them has ended. Saying NO to your adult family member really is an act of love even if it doesn't feel like it at the time. And ask yourself just why you are helping out an adult family member with their finances anyway.

Helping Family with Their Finances, General Guideline #4: Ask yourself why you are helping your family member with their finances.

Are you helping your family member financially because you love them and want to make sure they have the basic needs of life such as a place to live, food to eat, and electricity? Or are you helping them because it makes you feel good that it is not YOU that is in the position of needing to ask for help and therefore puts you in a place of superiority over that family member? Are you helping because you like to feel needed? Do you want to keep your adult children tied to your apron strings? Or do you feel that you must rescue your family member yet again? I think it's important to ask yourself exactly why you are helping another adult with their finances. Is there a genuine need or is it just a want? It will not hurt your family member to eat spaghetti, peanut butter, beans and ramen noodles for a few months while they straighten out their own finances.

In my own personal experience, I have noticed that whenever my parents help me out financially, my mother feels superior and in control of me. My mother has even said to me on several occasions that "the one with the money gets to make the rules" and also "we'll help you in our way, the way that's most convenient for us to help you." So of course, feelings of resentment are felt all around. I feel resentment for being helped in their way and my parents feel resentment because they are helping me yet again!

I have found that it's very hard to feel like you are a responsible adult when you ARE an adult and your parents pay your bills. And it's very hard not to resent your parents for helping you too. I am sorry to say that sometimes I even hate my parents for helping me financially which I know isn't fair to them but it's hard not to resent them for bailing me out over and over again.

So ask yourself exactly WHY you are helping your adult family member with their finances and see if there might be another reason besides "helping (enabling)" your family member. And if you do decide to help your family member with their finances, don't have unrealistic expectations that they will magically be able to handle their finances alone from that moment on. It isn't going to work that way at all.

Helping Family with Their Finances, General Guideline #5: Remember, if you do decide to help your family member financially, give your help with no strings attached but sit down and talk about the financial help very clearly and reveal any expectations you have up front.

One time my parents decided to help me financially and my mother wrote up a list of their expectations that they had me sign before they would help me. At the time I agreed that yes I understood the list and of course I would sign it but inside I was thinking the whole time that they were horrible people and how much I hated them for making an already difficult situation even more difficult. In hindsight, I can see that my parents must have been feeling resentment towards me but I didn't understand their viewpoint at the time. Their list did include some things like I had to clean my living room and some other strange things which I do think is ridiculous but now I can see how my parents were just trying to help me. Unfortunately they didn't understand quite how sick I was physically, and neither did I at the time, but their list really was unrealistic and even a bit unkind. If you are going to help your adult family members with their finances, just give your help without strings and don't hold it over their heads. Because if you do, then it just becomes emotional and economic blackmail and they will hate you. I can almost guarantee it!

Instead, if you do decide to help your family member with their finances, ask yourself AND your family member some questions. What can you do to help your family member financially? Will your financial help be needed just once or twice? Or will your family member need long term financial help? Then, make up a financial plan.

Unfortunately, before you help your family member with their finances, you will need to know EVERYTHING about their finances. This can be embarrassing to everyone involved but it's obviously necessary for your family member to make changes in his or her lifestyle because they wouldn't need YOUR financial help if they could handle their own finances now would they?

Some of the basic questions that need to be asked are - What is their monthly income? What are their basic expenses for rent, food, transportation, childcare, etc.? Where does their monthly income go each month? After you have all that information, start listing the things that can be changed fairly easily. Get a budgeting program for the computer and fill it in together and make an appointment to see a credit counselor.

If you have decided to help your family member with their finances, let them know that your help comes at a price and that the price is their financial independence from you. The best way to help your family member with their finances is to kindly and lovingly, with no strings attached, no condemnation and judgments about any poor financial choices, help them to stand on their own two feet with just a tiny boost from you. In the long run, hopefully, they will thank you as they stand on their own two financially independent feet.

I realize that not all families are the same and not all of these general guidelines will apply for every situation or family. I am writing this article based on my own personal experiences with my family and finances and on my readings from the sources I have listed below in "resources."

Sometimes we all need a little help in our lives whether it is emotional aid or financial aid. I believe that the most important thing to remember when helping your family members out financially is to be calm and loving throughout the entire process. Kindness, love, patience and a lack of judgment on your part can help to make the entire delicate process as pleasant and easy as possible. And if you are lucky, maybe, just maybe, everyone in the family will continue to love each other with NO feelings of resentment.

Resources:

MSN Money. "Should Parents Bail Out Their Adult Kids?" By Liz Pulliam Weston. http://moneycentral.msn.com/content/CollegeandFamily/Raisekids/P98891.asp

Telling It Like It Is. "How to Stop Enabling: When Our Grown Children Disappoint Us."
http://www.tellinitlikeitis.net/2008/04/how-to-stop-enabling-when-our-grown-children-disappoint-us.html

Telling It Like It Is. "Raising Independent Children-Not Moochers." http://www.tellinitlikeitis.net/2007/03/raising-independent-children-not-moochers.html

Telling It Like It Is. "Setting Boundaries With Your Adult Children: Six Steps to Hope and Healing for Struggling Parents."
http://www.tellinitlikeitis.net/2008/05/setting-boundaries-with-your-adult-children-six-steps-to-hope-and-healing-for-struggling-parents.html