Well-organized families can represent a bastion of strength for many extended family members and peer networks. Moms in particular, when everything seems to the external world to be in order, can often be the first place to head for when adverse financial situations rear their ugly head. After all, parents provide the best financial lessons.
The emotion and sentimentality that arrives with the request for support from loved ones can make it difficult to say ‘no’. However, that’s exactly what you should be doing – and this article will explain why, and how your top notch budgeting skills can help instead.
Give Them Background Information
The cause of many financial crises is ‘financial illiteracy’. This refers to the all-round habit of not knowing how financial systems work, what the terminology means, and how it affects you. For relatives suffering from perpetual money problems, providing an education can help break habits.
For example, the AAA Credit Guide (https://aaacreditguide.com/chexsystems/) suggest promoting awareness of the systems banks use to screen applicants and the circumstances that can adversely affect you. You can expand this education, to include information on credit scores, budgeting and interest rates.
Help Them Network
This tip can be particularly helpful when you know your relatives to be good workers. Just because they haven’t been able to manage their money properly doesn’t mean they aren’t good at earning it. If you know your loved ones are good, hard workers, you could always refer them for second jobs, or pay rises – helping to develop them and, if in your own place of employment, build your own reputation. After all, networking is key for job hunters.
Give Them The Tools
Finally, you can help relatives by building their all-round resilience. Money problems aren’t always exclusively a result of money-related attitudes and can point to underlying problems. Help your family by encouraging them to pursue mental strength, and to read and research your options. Gifts and helping hands for household necessities are fine, and will help prop them up; just understand the adverse psychological results of giving straight-up handouts.
The bottom line is, you shouldn’t lend anyone money for nothing. With family it can be especially tricky, and loaning them money on bank-like terms could only worsen a situation. Help your loved ones to develop themselves and stay out of debt permanently, and you will all benefit.