One of the hardest things to witness is a family member struggling with money related matters. Our hearts yearn to help them but sometimes I head doesn’t know how. Let’s look at six ways you can help your family member without hurting yourself financially. I know I’ve been in those situations where I really want to help but just don’t know what the proper steps of doing so are. Here are some suggestions.
As always, if you do anything that puts you in financial risk, make sure that you get a contract in writing.
1. Give the Gift of Cash
Cash can seem like an impersonal gift compared to a handmade sweater or savvy gadget but for those who are struggling to pay their bills, it’s the best option. First you have to decide how much you’re comfortable giving. Maybe you can afford one lump sum or perhaps you can only manage smaller gifts periodically. Regardless of the amount, the recipient will be pleasantly surprised to receive a gift they can put to use immediately.
2. Co-Sign or Guaranteeing
Proceed with caution when co-signing a bank loan for a friend or family member. The last thing you want is to ruin your credit history by co-signing for an unreliable person. Be sure to review the legal and financial implications in the event that the borrower fails to stay current on their payments. Before consigning, do the following:
- Get a copy of their credit report and monthly budget so you have an accurate picture of their financial abilities
- Have a honest discussion about the terms and agreements of the decision
- Ask the lender to notify you directly if the borrower fails to make payments
3. Help Them Create and Budget
Sometimes the best gift you can give is an education. Helping someone learn proper budgeting techniques and organisation is a tool that will reap benefits far past your existence. Remember the old saying “Give a man a fish, and you feed him for a day; show him how to catch fish, and you feed him for a lifetime.”
You may not be willing to co-sign a loan or be able to afford a fiscal donation but that doesn’t mean you can’t help your loved one in other ways. Do you own a business that could provide employment or know a friend who’s hiring? Help them get the job! The extra money will help them pay off their bills and teach them the value of hard work. It’s a win-win however you look at it.
5. Prepay Bills
If you’re feeling particularly generous or your loved one is in dire need of financial support consider prepaying some small expenses. This could be as small as their monthly phone bill or as large as their rent/mortgage.
6. Seek Professional Help
A credit counsellor may be the best option to get your family member on the right track. There’s no shame in asking for help and many debt consolidation organisations are willing to provide resources free of charge. Consolidated Credit is just one example of a debt consolidation organisation with trained professionals on site.
Whichever route you elect to take, make sure it doesn’t interfere with your financial security. Helping a family member is an honourable thing to take on so make sure it works in both of your favours.