What is my financial obligation to my family?

What is my financial obligation to my family?

Last Friday's question about the moral implications of spending prompted a great discussion, as well as a few personal messages. One of those e-mails was from Dave, who wrote with his own ethical dilemma. Instead of looking at the world at large, Dave wants to know how to handle a financial dilemma closer to home: with his own family. Here's his story:

I read your site though I no longer need it. I did a lot of the things you talk about and was able to retire early because of it. The rest of my family hasn't been as smart or lucky. My sister is doing okay, I guess, but my brother is in a lot of trouble, and my parents aren't anywhere near ready for retirement.

My brother and his wife have two kids. They declared bankruptcy a couple of years ago and have tried to make a fresh start. Life has dealt them some bad blows, but they're doing nothing to protect themselves either. To be honest, I feel like they just set themselves up for trouble. After declaring bankruptcy, they just returned to their former lifestyle and now they're back in debt again.

I could help my brother but I don't know if I should. (Plus I don't know if I even want to, which makes me feel like a jerk.) What if I loan him $10,000 (or give him the money)? That might solve the immediate crisis, but what does it help long term?

My parents have problems too. They don't spend a lot, I guess, but they hardly have anything saved for retirement, and they should both be retiring in a few years. I think they have maybe $20,000 total in a savings account, and maybe the same in various retirement plans. They don't spend a lot, but still $40,000 won't last long.

I guess I'm wondering: What's my financial obligation to my family? I could bail them out, but I feel like that won't solve any of the problems. Should I do it anyway? How? I don't want my brother and his family to be living on the streets and I don't want to see my parents eating dog food, but I find it difficult to help them when they won't even help themselves. What are my responsibilities here?

I sympathize with Dave. I'm not as well of as he is, but I sometimes wonder what my obligation to my own family is. Like Dave, I have a brother who has really struggled with his finances over the past few years. Some of this is because bad things have happened to him, but a lot of it stems from his choices. And he just seems to keep making the same poor choices, even when I offer suggestions on how he might help himself.

Family issues like this are a perfect example of how money is more about mind than it is about math. It's tough to make an objective, logical decision about how to help your brother or your parents. There's just too much other baggage involved.

In my case, I'm not willing to loan my brother money. Though it sounds harsh, I don't think he'd ever repay it. (And yes, I know that when you lend money to family and friends, it's often best to view the loan as a gift instead. I'm not even willing to do that, though.) Plus, I don't think my brother has actually reached a point where he's ready to make the changes he needs to in order to take control of his finances. He'd rather spend money he doesn't have to look like he has it than to cut back for a few years and live with less so that he can have more in the future. In other words, he's not willing to make sacrifices today in order to have a better tomorrow. And that's what getting rich slowly is all about.

So, I don't actually have any constructive advice for Dave. I'm in the same boat, though on a smaller scale. Like Dave, I can't figure out what my financial obligations are in this situation. Can you?

When your siblings get into financial trouble, what are your responsibilities? What about your parents? Have you bailed out a family member before? How did that work? Can you give tips on what went right, as well as offer suggestions on what you would not do in the future? And if you've never had to face a situation like this, how do you think you'd handle it? Help Dave (and me) figure out how we can steer our family in the right direction.

More about...Debt

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
278 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
LifeAndMyFinances
LifeAndMyFinances
9 years ago

“Give a man a fish and he’ll eat for a day. Teach a man HOW to fish and he’ll eat for a lifetime!” Dave, I would not loan your brother any money. Sure, the instant cash would help them with their short-term difficulties, but ultimately, they’ll still be in the same boat. You’ve seen it yourself after their bankruptcy! Rather, I would suggest you offer to pay for a personal finance class to help them with their budget and expenses. If they don’t want that, then they really don’t want any help… just a hand-out. As for your parents, that’s… Read more »

Jan
Jan
9 years ago

I agree about the parents- especially if both of them worked enough to receive SS. There was great concern that my in laws would never be able to live through their retirement with as little money as WE thought they had. They not only lived fine on Social Security and a small pension, but raised a garden that fed a neighborhood of widows. It was all in the planning. The time to help will be when one passes.The loss of the person AND the other check are huge. My money stops with my parents and children. My brothers are both… Read more »

Nicky at Not My Mother
Nicky at Not My Mother
9 years ago
Reply to  Jan

Jan, But how would you reconcile helping your parents, when the reason they’ve not got any money is they’ve been bailing out your brothers? That’s my situation, only it’s my inlaws, which makes it much more tense. My sisters in law have both been financially irresponsible and my husband’s parents have been bailing them out. Now the parents are close to retirement and have very little, and while one sister has changed the other one is still taking advantage. We can’t let them starve, but it’s really frustrating that the reason they NEED help is because of the sister. So… Read more »

Stephanie
Stephanie
9 years ago

I completely agree that helping the brother should be tied to “teaching the man to fish” and I like the idea of paying for financial classes. However, you can only teach him if he is willing to learn. It’s a delicate matter but if he set some financial goals, perhaps you could provide a gift tied to reaching those goals… goals set by him. As for the parents, I am facing the same dilemma. My father is in retirement and my mother will be shortly. Neither of them has a dime saved. Of course I would never let them go… Read more »

Melissa
Melissa
9 years ago

I completely agree with the previous 2 posters. My mother and father in law are going through a similar money crises. After thinly veiled requests for flat out cash, the ‘kids’ in the family decided to try and teach them good financial habits (budgeting, trimming spending, even buying them a copy of Dave Ramsey’s ‘Total Money Makeover’). They made a half hearted attempt a few months ago but have now stopped, and continue spending. They have a negative cash flow each month somewhere between $500-1500 and just keep charging, or pulling money out of their retirement accounts. Long story short… Read more »

cerb
cerb
9 years ago
Reply to  Melissa

I enjoyed that link, especially the sentence “any help you give to someone on a downward trajectory will just prolong that downward trajectory”.

Valerie
Valerie
9 years ago
Reply to  Melissa

That post is spot on. My husband and I had just graduated from college and we were scraping the bottom of our finances. A study abroad trip had wiped our savings account, my husband was underemployed with his job ending soon and I was unemployed. Our student loans were about to came due and we were going to have trouble paying rent very soon. My brother gave us $1000 to help tide us over, because they were doing well and could afford it. I really appreciated the money at the time, but looking back it just allowed me to keep… Read more »

Louisa
Louisa
9 years ago

My family members are doing OK, so I can’t speak from experience. But I believe I would feel more responsibility towards my parents than towards a sibling. They did, after all, raise me. I don’t mean I would support even my parents endlessly, though. That said, my husband and I have had the issue with one of my stepdaughters, who has had financial problems since she got married. She did pay most of the loans back, but it often felt very uncomfortable. I felt like a banker. Most of the time we would only hear from her when she and… Read more »

Den
Den
9 years ago

After my sister’s divorce, she struggled financially but was too proud to take a loan/gift from her family….so I checked out a copy of Dave Ramsey’s “Total Money Makeover” and left it sitting around my house when she came over….she casually picked it up and then when I raved about what a great help the book was to our family she seemed interested. I offered to let her borrow it for a few weeks. She returned it a week later excitedly talking about it and has really used some of the tips in it to get on a more financially… Read more »

SF_UK
SF_UK
9 years ago
Reply to  Den

That’s an amazing technique, as it let you help, but she had to make the first move, so it doesn’t feel pushy. I bet saying how it had helped you (i.e. admitting you weren’t perfect) helped on that score too!

Elizabeth
Elizabeth
9 years ago

I’m curious to see how this conversation pans out. I haven’t had to deal with this situation yet, but I wonder at what point does helping become enabling? I like LifeandMyFinances’s suggestion to pay for classes. I’d take that one step further and offer to pay for counselling or a financial advisor, if they were open to that. Though I realize it’s hard for some people to admit they have a problem or accept help. Ultimately, you can’t help someone until they want to change. As for parents, I’ve seen a lot of research on how much time and money… Read more »

BareheadedWoman
BareheadedWoman
9 years ago
Reply to  Elizabeth

I’d like to see the numbers about how many early gen Xers are supporting their baby boomer parents. The first question to be considered is: is or has your family ASKED for help, or implied that they are expecting it? According to my very straight laced relatives, I’m going to be the “need to be helped” relative. But not because I spend too much, but because I have lived a bare life by choice and my road doesn’t look like their road. To them, I am not a success. However, if my life ends me up under a bridge, then… Read more »

Elizabeth
Elizabeth
9 years ago

I’d like to see those numbers too! I keep reading about the baby boomers being the “sandwich generation”, but I have friends in who are in their 30s and 40s who are helping look after their 70+ plus parents. The baby boomers may be the first trying to look after parents and kids, but they won’t be the last! One theme I consistently see in my research is that people have to look after their own financial security too. It’s noble to look after your parents and kids, but part of the way you can do that is to be… Read more »

Lindsay
Lindsay
9 years ago
Reply to  Elizabeth

I am a Gen-Xer with parents aged 63 and 73. They’re in very good health but one reason that I want to “get rich slowly” is so that I can take care of them when they need it. I feel like it’s my obligation to care for my parents. Whether or not they would WANT to be taken care of is another story. They may prefer to stay in a senior citizen’s home and socialize with other seniors, but I want to be able to afford a big enough house that they can come live with me, and I want… Read more »

Kate
Kate
6 years ago
Reply to  Elizabeth

Even though this response is a bit late compared to the others, I am also very interested to see the numbers of gen-X’s financially contributing to their baby boomer parents. In my case, at first I felt like Lindsey below, wishing to help my parents at all costs. However, over time, and especially after one of my parents lost their job as the other retired, they began to look to me to pay some of their largest monthly bills. Now, for the past 2-3 years, a full one-third of my net income pays just for my parents bills. When I… Read more »

Cindy
Cindy
1 year ago
Reply to  Kate

I think you need to set a boundary and give your parents x amount of time for them to come up with an alternate plan, sell their home, sell things, take money out of retirement, etc. You have let them dictate to you what you can do with the money you earn. If you do get married and have children what you are doing now is going to affect them and their future. You need to set boundaries with your parents and stick to it. My husband had his mom say she ‘expected her son’s to take care of her’… Read more »

desertzinnia
desertzinnia
5 years ago
Reply to  Elizabeth

Keep in mind that the boomers were the first generation forced to pay through the nose into Social Security so that THEIR parents — many of whom had good pensions — had money to burn during retirement. Take a look at who’s been flushing money away at the Indian casinos.

The “Greatest” Generation and the Silent Generation have had money to burn because they worked during worker-friendly times, NOT because they worked hard or were frugal. Then they turned around and replaced their kids’ pension systems with the 401K lottery, among other things.

Daniel
Daniel
9 years ago

I’d say you shouldn’t provide monetary assistance. I’m a firm believer that adding money to the situation would likely complicate the problems further.

Besides that, if they haven’t shown a desire to save more and/or spend less, your money will be wasted anyway. That would almost certainly breed some form of contempt and then things go down hill from there.

I assume you have, but have you attempted talking to both your parents and your brother? Until you know where they stand and how they feel about the situation it would be difficult to make an educated decision.

SG from Germany
SG from Germany
9 years ago

I guess you should not give money to your brother. If at all, you can try to help his two kids. But it will be difficult to make sure that help is really reaching them and not their parents.

With your parents, that is indeed difficult. It sounds you could afford to give them some money on a monthly basis, but such things are almost always questions of pride. So you might need to find other ways to help them so they can keep their face accepting it from you.

Trevor
Trevor
9 years ago

If the parents live nearby, invite them over for a dinner of a regular basis.

That way you get to see them and you know that at least once a week/month what ever their are getting a good meal without needing to offer them money or food hand outs.

It’s surprising how much they could save by knowing they don’t need to buy food for one particular night. Of course it only works if they are close, no point doing that and then having them pay more than they would on food to get to your home.

Fish Finder
Fish Finder
9 years ago
Reply to  Trevor

My wife & usually cook in big lots on the weekends and divide it up into weekly meals. Every Sunday after church, we stop by my mother’s house and give her enough meals for lunch or supper every day during the week. We visit for about an hour and she is happy. For her birthday and holidays, we give her a gift card to her favorite grocery store. My brothers are on their own.

Terry
Terry
9 years ago
Reply to  Fish Finder

I love this! How thoughtful and caring to do this for your Mom! You are helping without being pushy and I’m willing to bet that every time she heats up a delicious meal, she smiles and thinks of you.

Sonja
Sonja
9 years ago
Reply to  Fish Finder

Yes, this is generous on so many levels. What a kind and gracious commitment.

Cindy
Cindy
9 years ago
Reply to  Fish Finder

Oh your mother has to love this! Such a great solution. She gets good meals & quality time with her family.

Shannon
Shannon
9 years ago
Reply to  Fish Finder

Thanks for this suggestion! My mother is nearing this point (although still in her working years), and we are generally opposed to buying her even groceries or grocery gift cards. I can see how cooking meals assures she would eat well, she eats the best when she comes to our house for dinner, but it would be great to know she was actually eating balanced meals at home.

Terry
Terry
9 years ago
Reply to  Trevor

When we invite my folks over for dinner, they take home a CARE package with almost all the leftovers – we intentionally cook a lot, and sometimes they can eat for a few days on the leftovers (which I think my Mom enjoys, as cooking is not a favorite activity). I really like the idea of reviving the Sunday family dinner.

Tonya
Tonya
9 years ago

I have a brother who has fallen on a lot of difficult times, and though I love him and we have all helped him out and continue to do so from time to time, it often feels like the money gets dumped into a black hole. Instead, I have chosen to pay for things that I believe are worthwhile. I have just finished paying for their second child’s braces, and I feel great every time I see them smile. Both really needed them and possibly wouldn’t have gotten them otherwise, so I feel like the money was well spent. Yes,… Read more »

Nicole
Nicole
9 years ago

Yeah, good luck. Obviously no on the brother. We do offer to directly pay for certain things for the children of a relative… specifically educational opportunities, etc. So far offers to pay for classes and counseling have been met with offense, and books left unread. But, the fact that we send financial books every time they need money means we’re the last relatives they ask. Re: parents. Suze Orman says you have to support them. It doesn’t sound like you have to support them now, but you probably will in the future, sometime between when their money runs out and… Read more »

Mike Holman
Mike Holman
9 years ago
Reply to  Nicole

“But, the fact that we send financial books every time they need money means we’re the last relatives they ask.”

Hilarious. If anyone ever asks me for money, this will be my response too. 🙂

Laura
Laura
9 years ago
Reply to  Mike Holman

I’d send the personal finance book with a note saying, “When I receive an e-mail from you discussing what you got out of reading this book, then I’ll send you the $X you asked for.” It’s probably a fecal thing to do, but for me it’d be worth it. 🙂

DreamChaser57
DreamChaser57
9 years ago
Reply to  Laura

Isn’t conditioning your help in this completely arbitrary despite being well intentioned and serves no purpose? What stops the person from merely perusing the book and throwing together a quick book report?

Bonnie
Bonnie
9 years ago
Reply to  Nicole

Are you sure about the Suze Orman thing? The one Suze Orman book I read said that parents are obligated to help their children (because the parents chose to bring the children into the world), but not the other way around. And no one is obligated to help their siblings. Seriously, I don’t think anyone is “obligated” to do anything for their parents. I have wonderful parents who likely will never need my help, but I would be glad to help them if they ever asked (because they’ve been a wonderful influence on my life). My DH, on the other… Read more »

MikeTheRed
MikeTheRed
9 years ago

As someone who bottomed out and turned their financial life around, I have to say that you just can’t really help people who are still on a downward trajectory. I received help from my family when still digging into debt, and it did nothing for me really. It might have made the hole I was digging a tad bit less deep, but it didn’t turn me around. You also can’t always help someone who’s hit the bottom either. There’s a period of time after bottoming out that little progress is made and attitudes haven’t really changed. The new habits haven’t… Read more »

Misty
Misty
9 years ago
Reply to  MikeTheRed

I have to agree with this, from personal experience. I won’t go into details about my downward spiral, but I’m on the upswing now. A relative sent me $1000 out of the blue (probably because she saw the signs of me really trying to dig myself out) and it has been a huge help. I took about $400 and bought a good bicycle, and it has already paid for itself in the gas I’ve saved running around town. I only use the car when I have to go out of town, now. The rest went into an emergency fund that… Read more »

Jennifer Atienza
Jennifer Atienza
9 years ago
Reply to  MikeTheRed

This is a really interesting point of view, one that I didn’t think of before. You are right, the “help” wouldn’t do anything if the person you are helping does not want it… It’s throwing good money after bad. I do have siblings who are not financially savvy. I used to worry about them incessantly, lecturing them, and then helping them out of guilt. But did that help? Not really. I don’t think it was ever appreciated or recognized… In fact, it made things worse because it gave the irresponsible party a sense of entitlement – that the help should… Read more »

Slinky
Slinky
9 years ago
Reply to  MikeTheRed

My brother and his wife seem to do ok. I think more paycheck to paycheck than downward spiral, although I don’t really know. Anyway, their kids are the only one’s in the family and they get tons of toys and junk for birthdays and Christmas. So I put $100 in their 529 plans (that I started) instead. Sadly, it’s probably the only help they’ll get, other than government and whatever scholarships they find for themselves.

Trevor
Trevor
9 years ago

I’ve loaned my sister money so she could pay off a loan to my dad – I know, you don’t have to tell me. It wasn’t a huge loan by any stretch of the imgination, only a couple of hundred pounds but it was significant given we were both teenagers at that time. I viewed it as a gift, but I told her that I wanted it all back plus a little be of interest so that she would learn (0.5% if I remember correctly – at the time Current Accounts were paying about 3%). To her credit, she paid… Read more »

retirebyforty
retirebyforty
9 years ago

Luckily my immediate family is financially responsible. I’m the oldest kid in the family and I helped out a bit when my brothers were in college. I shelled out the down payment for a two bedroom condo when my bro went to grad school in Texas (cheap housing there.) He rented out one room and that covered the mortgage payment. Once he left school, he sold the condo for a small profit and then sent me back that money. It worked out well, but I wouldn’t recommend it unless you can afford to lose that money. As for Dave. You… Read more »

Jen
Jen
9 years ago

I agree. There are two situations in which I’d help family or friends. 1) The amount is small enough that I can think of it as a gift and not worry about getting it back. I can take it out of savings without really noticing. 2) They have dramatic life needs — that is they are hungry, out of a place to stay, etc. But again, it would have to be money I could spend, not money that might put my family in the same spot. In my family, I seem to be the only real saver. I’m uncomfortable with… Read more »

Karen in MN
Karen in MN
9 years ago

I think that family is family–they should know they can turn to you as “the safety net of last resort”. By that I mean, to bail them out of jail, pay for lifesaving surgery for their kid, put food in their fridge if they’re retired and have no savings anymore, or maybe give them one month’s rent so they can keep their place until they get a paycheck from their new job. I’ve had to do this–my ex-husband’s family (in another country) got into trouble repaying a loan that they got by using their house for collateral, so we sent… Read more »

Rosa
Rosa
9 years ago
Reply to  Karen in MN

I agree with this 100% – I’d step in to save a sibling or parent from homelessness, but not give them cash infusions to keep on doing the exact same thing they’ve been doing. For a debt junkie it’s just like giving booze money to a drunk. I’ll help my neices & nephews pay for college tuition if they go – but I won’t give their mom cigarette money. And I just say, thank God for my stepmom and her pension, I wasn’t looking forward to taking care of my spendthrift addict of a father and she took it on… Read more »

older mom
older mom
9 years ago

On the other side of the coin: I have two adult children, one of which always is short of money and the other of which is not. She has been gifted/loaned substantial money over the past 18 years until about 6 months ago when I said to myself “enough is enough.” I will not be an enabler any longer. Now there is a grandchild facing college and as far as I know there is little, if any, money for that. Now I ask myself if I should offer to help or not. So far it has been not. That child… Read more »

Genavieve
Genavieve
9 years ago
Reply to  older mom

One thing to remember regarding the grandchild facing college: She can apply for grants and loans. You don’t get grants or loans for your retirement. She’s got her whole life to pay back those loans. And she might take her education more seriously if she has to pay for it herself. After I graduated from college, paid for with a combination of loans and my own sweat equity, my grandmother gave me a lovely gift. She asked me for my student loan servicing number and she paid off a chunk of my student loans. She had made some really good… Read more »

alison
alison
9 years ago
Reply to  Genavieve

I’m coming late to the table, but I agree with the suggestion regarding your grandchild’s college education. Let her decide if she really wants to go to college and go through the steps of getting loans and grants, etc. After she graduates, gets a job, and starts paying her loans back, then you could step in with a gift to pay her loans off if you like. Meanwhile, she’s learning some good life lessons. My husband’s grandmother did this with us and I wouldn’t trade those times of being frugal to make loan payments for the world – such a… Read more »

Kate
Kate
9 years ago
Reply to  older mom

For what it’s worth, I’d encourage you to have a conversation with your grandchild. My mother passed some atrocious spending habits to me, and no one in my family pulled me aside to let me know what she was doing was abnormal until I was in college. By then, I had accidentally adopted some of her habits. I’m not blaming my family – at all – I just wish someone had given me the guidance I needed. I would be wealthier than I am and probably would have spared myself a lot of emotional ups and downs if I had… Read more »

Amy
Amy
9 years ago

Have your parents or your brother actually asked you for money or any other sort of financial help? If no, then I’d say you don’t need to be shelling out cash to them. From my personal experience of giving money to family members who aren’t directly asking for help, it just creates tension, either between them and myself OR for me b/c I’m giving up money I could have used for myself (selfish, perhaps, but that’s how I feel). I think other commenters are dead on about your parents – you may have to help them out one day. May… Read more »

Rachel
Rachel
9 years ago
Reply to  Amy

I definitely agree that until one of your family members actually asks you for money, there isn’t really an issue here. It would be incredibly insulting for you to approach your brother or parents out of the blue with the news that, after much soul searching, you’ve decided to help them out by giving them money. That being said, if you anticipate that your parents my someday need help, quietly plan for that eventuality without telling them you are doing so. But to respect the dignity of all involved, don’t assume your relatives are expecting (or even hoping) to get… Read more »

Blackstar
Blackstar
9 years ago
Reply to  Rachel

Well, said, Rachel, and most importantly, keep preparing and staying open as a means of support but having personal limitations, even with family.

Anne
Anne
9 years ago

For your parents. Start planning to have them live with you. Lots of people may say – just leave them be. But if they can’t make ends meet, you won’t be able to watch them just live in poverty. (Unless you guys don’t have a decent relationship.) So start planning. Once they have a home with you, they should be able to live comfortably on social security. And they can even pay towards their expenses. If you feel you will need them to have separate space, start looking for a home with an inlaw suite. If you can’t afford that,… Read more »

SS
SS
9 years ago
Reply to  Anne

I think this is practical advice that isn’t the “cultural norm” in America, but is commonplace in other parts of the world. In many cultures, generations of families live together and take care of one another. Not only does it help save money due to economies of scale, it ensures that the older generation doesn’t get “left behind” economically.

lil
lil
9 years ago
Reply to  Anne

I’d take this piece of advice with caution–what sounds doable in theory may be horrible in practice, particuarly in light of the “powdered hinney” theory. (The theory is based on: one who has powdered somebody else’s hinney (the parent) will not be able to accept abiding by rules set in place by the powdered hinney (child)). My in-laws had their mother (my dh’s grandmother) move in because she couldn’t make it on her own after Grandfather died. But you can’t have two queen bees in the same house. Grandmother wanted dishes organized her way, MIL wanted them her way. Laundry,… Read more »

Tonya
Tonya
9 years ago
Reply to  lil

I moved in with my parents after a divorce and after a few years decided it was a wonderful way to cut costs on both sides. We split the house payments, utilities, and food, and my children have a great opportunity to know their grandparents. They are only 69 and in good shape, but as time goes on, we won’t have to worry about what to do with Mom and Dad when they get too old to live alone. Thankfully neither of us is too much of a “Queen Bee.”

Brooke
Brooke
9 years ago
Reply to  lil

[quote]The problem is, when a person has been in charge of their own home for 57 years, you can’t expect her to live under another’s rules with no say, regardless as to who owns the home on paper.[/quote]

Um, no. If autonomy was her goal, she should have been better prepared for her own retirement. I’m with MIL all the way here… as it is, Grandma is dependent upon her son and daughter-in-law’s charity. Grandma needs to buck up and learn to show her generous MIL some respect.

hasammie
hasammie
9 years ago
Reply to  Anne

I really think parents moving in with an adult child in their old age will become a norm in America. Financially, it will be the only way to pull off retirement for many of them.

Jan
Jan
9 years ago
Reply to  hasammie

Personally, I am hoping for a child with enough land to put a tiny house in the back. I would love to live near- very near- but not IN the house. This would not be for saving money- but the loneliness that happens in the elderly stage.

Tonya
Tonya
9 years ago
Reply to  hasammie

I’m one of six kids, but I’m the only single one, and right now my parents don’t need any assistance.

My grandma sold her house and helped my uncle buy a house with a mother-in-law apartment attached to it. It’s a great arrangement. They have separate entrances but a door between their residences they can open if they want. They check up on her and bring her dinner most days (she’s 95), but she still has her own space and independence.

Trina
Trina
9 years ago
Reply to  Tonya

I have a distant, elderly relative who sold her house, and used the money to build a mother-in-law suite onto her son’s house. The son lost his job, couldn’t pay the mortgage, and they all lost their homes. And now the elderly relative has no home and no money.

Dave
Dave
9 years ago

I have struggled with this situation multiple times myself. I have twice bailed out family members but I was lucky that I was paid back within a year both times. At one point I had even established a family loan sub-account in my ING savings for such situations. This was early in my stage of taking control of my finances. However, as I have progressed in my financial life and reached a number of goals, I have made a 180 on the situation. I did away with that family loan fund and have decided I won’t help them financially. Now… Read more »

Meg
Meg
9 years ago

Dave,

You aren’t obligated to give your family money. In fact, from what you say, it doesn’t seem like it would make much of a difference for them. If you still want to help them, you could think of other, non-financial ways, Could you have your parents over to dinner more often? Babysit your neices/nephews? Or find other ways to be there for them?

Talk to them about ways you can help without bankrupting yourself. You are family, but you aren’t responsible for their debts.

MutantSuperModel
MutantSuperModel
9 years ago
Reply to  Meg

Yes to the excellent suggestion of indirect or non-financial assistance, especially for your parents. You can do things like buy them groceries (it was on sale and we bought too much, so here you have some) and things. My mom offered to pick up my grandfather’s meds all of the time and she’d just pick up the tab and not mention the cost or anything like that. Another thing my parents will do is take my grandmother out in her car and fill it up with gas. They pay her cell phone bill because she didn’t understand the technology so… Read more »

Megan
Megan
9 years ago

Or why not take the kids for a working vacation – even if it’s just at your house for the summer? Teach them about finances and spend an extended period of time with them – perhaps having that time alone will help your brother and his wife work on their own issues as well. And maybe the kids can then impart their new knowledge to their parents. But at least they will know someone cares about their welfare and they will have the skills for their future. Also, I agree that parents and sibilings are different, but that said, at… Read more »

Betsy
Betsy
9 years ago

I think you are already helping your brother and your parents — by taking care of your finances so that they don’t have to worry about how they will help you make ends meet.

Family roles and scripts are easier to detect when they’re turned around. Who said you get to be the safety net for them always?

All they have to do is take care of themselves, and they won’t even do that — yet here is everyone thinking that *your* role is to double and triple up for them.

Shawn
Shawn
9 years ago

UNDER NO CIRCUMSTANCES should you loan your brother any money. Not only will you lose your money, but you’ll lose your brother as well. Giving money to somebody who has a proven track record of financial irresponsibility is like giving a drink to an alcoholic. Despite your best intentions, they simply won’t have any self control. And burdened with the guilt of not being able to repay you, they’ll eventually remove themselves from your life completely. The best thing that you can do is to sit down with your brother and try to lovingly teach him the things that you… Read more »

siredge
siredge
9 years ago

Everyone seems to be focusing on the specific situation, so I’ll add to the conversation by stepping back a step. It seems to me that the general rule is that each of us should seek to help others be their best selves. Someone that has learned a lesson and could use a hand out of a tight spot is very different from someone that has been bailed out and gone back to the same old thing. Giving money to such a repeat offender (as it were) would be encouraging them to destroy themselves (or at least miss out on growth).… Read more »

Nancy L.
Nancy L.
9 years ago
Reply to  siredge

I agree with this thinking. There are parents and siblings who are destructive in their relationships and with their finances. It helps no one in the situation to continually bail them out and enable them. But if someone is having a tough time despite trying to be responsible then help them out to the fullest extent possible. And there’s no point giving money if you then want to spend your time lecturing the recipient. Either it is given freely as a gift with no demands, or else keep your wallet shut.

Sustainable PF
Sustainable PF
9 years ago

This is such a difficult subject and at the same time so personal. For us, the question arises about one of my parents (divorced) who did an AWESOME job raising us on a low single income and who started her pensionable career quite late. She was self employed when our parents were together, then worked administrative contract work to ensure the bills were paid and we were fed WELL and we had heat, hydro and a roof over our head. She even paid off her house in the high interest ’80s. But now, she’s soldiering on to age 65 to… Read more »

Mike B.
Mike B.
9 years ago
Reply to  Sustainable PF

We approach that as suggesting ways for them to save money. It might be by getting on a family cell phone plan and splitting the bill. Down the road, it might be offering to let them move in with you and charging substantially less than a market rent.

It’s less damaging to pride if they’re still paying something, but you can look for ways to quietly split costs.

Jaime B
Jaime B
9 years ago
Reply to  Sustainable PF

If your mom does not want to talk about her retirement finances, you can’t make her. What you can do, is let her know you’re available if she ever wants to discuss them and that if she needs help you will be there for her. You don’t have to know the concrete numbers to let her know you’ll be there for her if she needs you. If you’re really worried about it, then I would follow one of the earlier suggestions – start a savings account for any future help you think she might need. That way if she ever… Read more »

Shawn G
Shawn G
9 years ago

Thankfully, I have not had to endure this with my family, but I know someone who has. A brother and sister had been bailing out their sister for years. Eventually, they got fed up with her act and cut her off. Within 6 months she changed her ways and is doing a lot better financially now. It was the best decision, and she actually did change. That does not always happen, but in this case it worked.

El Nerdo
El Nerdo
9 years ago

Like many things, this depends on values and culture and family expectations. I’ve seen my parents take care of my grandparents and great-grandparents, so I can’t imagine not doing the same for them when it comes the time that they need my help. It’s just what we do, and I don’t think pride would be an issue– if anything, it would be more of a shame for me if I didn’t. My brother is doing great financially, much better than me, and I don’t think he’ll ever need my help, but if he ever did (some sort of disaster) I’d… Read more »

No Debt MBA
No Debt MBA
9 years ago

I agree with the other commentors that you shouldn’t be giving your family money. People don’t value others’ money as they do their own and your family doesn’t sound like they’re ready to make major changes.

I also want to suggest that Dave (or J.D.) shouldn’t feel guilty about this decision or feel like a jerk. You’re being entirely reasonable, want to help your family and are trying to find the right way to help. That’s worthy of applause, not guilt.

Andy
Andy
9 years ago

I am sure many of you are in the same situation, but what do you do when you have a sibling who absolutely has no desire to make the sacrifices necessary to live on the money she receives (from disability, which is a whole different issue) who is bleeding your retired/close to retiring parents dry? My parents (1 retired, 1 close to retirement, but out of work on medical leave) live like misers, but give thousands of dollars a year to my sister. She is recently separated, but this has been happening for basically all her adult life. She cries… Read more »

partgypsy
partgypsy
9 years ago
Reply to  Andy

I’m in a similar situation. I’m more inclined to help my parents (who raised and took care of me, paid for most of my college) than my siblings. But my alcoholic brother lives with my mother who leeches off both her and my father. I’ve often found money I’ve given to my mother ends up being spent on my brother. Along with other things I’m not going to go into, it has put my mother in a precarious financial situation. It makes me really sad, but as long as this co-dependent relationship exists I am unable to help my mother… Read more »

Eileen
Eileen
9 years ago
Reply to  Andy

We have a similar situation with my husband’s sister and their father. My mom-in-law (who kept track of their finances) passed away leaving the his sister with control of everything (his father is not well). While we expect that she should be compensated for the help she is providing, we also know that she’s using his money to support herself (unemployed, under water in her house, expensive toys). While mentally we are preparing to learn he is broke, we really can’t contribute to his expenses at this point (2 college kids). It gets verrry tricky.

Slinky
Slinky
9 years ago
Reply to  Andy

I think this is the worst situation of all. My grandparents have always helped out everyone else in my family. I’ve heard my cousin/sibling refer to the “bank of grandma and grandpa”. And where did all this money come from? They remortgaged their house. They saved nothing for retirement except what my grandfather’s company put in (very little). They gave away everything they had if anyone needed anything. Some days I’m angry at them for not realizing they have to take care of themselves too and some days I’m mad at my family for taking advantage of the nicest, most… Read more »

HollyP
HollyP
9 years ago

MrP has a similar issue. Lecturing has not helped. We even sent BIL to school for a semester to start retraining for a new job, helped him relocate to an area with a better economy, to no avail. As “rich brother” MrP feels obligated to help. We get very occasional requests for help now, but think there may be more in the future. Our solution was to budget for future requests. We set up a “family emergency” savings account, to which we make small automatic contributions. Since the account is in MrP’s name and not mine, he can take the… Read more »

Mom of five
Mom of five
9 years ago

Unless parents have been abusive in some way, I think children are obligated to help them in their old age. We have given money to siblings over the past 10 years. One family reached their bottom when they had to ask us to bail them out, and the act of asking for help was a real kick in the backside for them to start living responsibly. Another family has had uncovered medical issues come up with their child. I don’t think there was so much irresponsibility as just outright need. The third relative is the most troublesome to us because… Read more »

getagrip
getagrip
9 years ago

Provide nothing but moral support, suggestions if asked for, limited help for nieces and nephews (e.g. you’ll match scholarship money if they go out and get one for college) if you desire to. Nothing you do will solve their ultimate problems. They would pauper you, say they were sorry, then turn and try to find someone else to pauper. They are not evil or mean, it’s just they aren’t willing to change. I’ve a similar issue in my family. I cannot provide financial help to my mother because in essense all that happens is I am funneling money to my… Read more »

Kris
Kris
9 years ago

I’ve been fortunate, to a point. When my brother was having financial issues, I was too, so I was in no place to have to make a decision about helping him. My parents have always been fairly careful with their money; my dad has a pension that will continue after his death so my mom will be well looked after. My mom has less, but her money is their “fun” money, and I know they expect it to cover their travel plans for another 10 years or so – hopefully they are healthy that long. As a Canadian, thankfully health… Read more »

Marguerite
Marguerite
9 years ago

For the brother, until he’s ready to face his finances and make some changes, any help you give will be a waste of money. Don’t bother. The parents are a different story, because no one’s going to feel comfortable letting their parents struggle if they can help. Since it sounds like the parents are still working, now might be a good idea to say something along the lines of “I was looking over my finances to plan my own retirement and I was wondering if you would mind telling me how you are planning for yours?”. That way it’s more… Read more »

fantasma
fantasma
9 years ago

This question is to JD: does your brother read this blog? Is he not offended/hurt by your admissions? I wonder what his side of this story is?

I personally believe in helping family, slowly though I am learning that you can only do so much.

My advice is to do up to a certain point, without it hurting you financially.

I like giving books on personal finance as well.

Kevin
Kevin
9 years ago

I manage my sister’s finances. She was so out of sorts she couldn’t even get a bank account. Now, she sends all her paychecks to me. I’ve automated all her accounts and she has a pre-paid credit card that I periodically put spending money on for her. We’re slowly getting her out of debt, only need to pay the bank and her student loans (about 8k left) and then I’ll slowly turn things back over to her.

Misty
Misty
9 years ago
Reply to  Kevin

Wow. I’m curious, how are you ensuring that she doesn’t just turn around and make the same mistakes after you get her out of debt? This is an interesting solution, but is she learning anything through the experience? (For example, is she sitting down with you while you make a repayment plan, etc?)

Luke
Luke
9 years ago
Reply to  Kevin

While I’m glad that this is working out for you, I have to say I’m stunned that anyone would a) suggest this and b) go along with it.

Repeat after me – you’re not your sister’s dad!

Mary
Mary
9 years ago

I’m a softie, but I think if your parents need financial help and you can afford to help them, then you should. I don’t think this help should come at the expense of your own family, but I see nothing wrong and everything right about helping out parents that need it. The brother situation is a little stickier to me. I have 2 little boys and I would hope they would help each other one day should the need arise. I have a brother with mental health issues and I would totally help him out if he needed it, as… Read more »

Des
Des
9 years ago
Reply to  Mary

I think the problem with that thoughtline is that how do you define what does and doesn’t affect your family. Obviously, if you give the money to your brother your family won’t have it to spend. Do you wait until your kids’ college account and your own retirement accounts are fully funded before helping him? If not, at what point do you say “Ok, this person needs this money for XYZ more than my kids will need it for college, and more than I need it for retirement.” ? I expect most people here are in a position where they… Read more »

Mary
Mary
9 years ago
Reply to  Des

I guess, in my mind, I would say that if I had an emergency fund, enough to house, feed and clothe my kids and was saving enough to pay for their educations and my retirement, I would feel perfectly good about helping out my family and/or in-laws. Like right now, if my family needed help (they don’t) my husband and I are a fine situation to provide it. I only hope they’d feel comfortable enough to ask. (They wouldn’t.) However, if our situation changed, (my husband lost his job, we had another kid, etc.) we’d have to stop. I guess… Read more »

Shalom
Shalom
9 years ago
Reply to  Mary

Mary, that’s what we have done – we made the limits clear up front.

I have a nephew to whom we offered a family ‘scholarship.” I offered it in a letter that set out the terms (payment made directly to the school, a minimum GPA requirement, amount paid per semester, max number of semesters…) and also that said that we intend to pay it for 4 full years of college, but if I lost my job or one of us got really sick or something, we might have to stop the payments. It’s worked fine so far.

Mary
Mary
9 years ago
Reply to  Mary

I think that’s awesome and an absolutely brilliant approach, Shalom!

Alicen
Alicen
9 years ago

Ironically, I find myself asking the same question today. In my case, it is my BIL and SIL who are asking for the money. They are a very low-income family with 2 young children 3 years old and 1 1/2 years old. BIL has been on leave from work for depression since last July. SIL was on unpaid maternity leave from July 2008 until September 2010 when the government paid for her to go to school. She has since finished school and is now working. Last week they asked us for $800 because their house insurance was up for renewal… Read more »

Nicole
Nicole
9 years ago
Reply to  Alicen

How are they going to pay back the $1400? How could they pay back $1700? The larger it gets the worse in debt they will be and the harder to pay it back. If you are in debt yourself, you don’t HAVE money to be giving to other people. Giving/loaning money is a luxury. The government/public safety net may not be as big as in other countries, but we do have it. They need to look into WIC and other public programs and hit up a food bank to get them through times when they’re short. I might have the… Read more »

Sonja
Sonja
9 years ago
Reply to  Alicen

Those credit card cash advances are going to be charged higher interest rates than normal retail purchases. You have been beyond generous. But this could quickly derail your financial stability if continued at this pace. I love that you are so generous as to get into your own cupboards. But you should also point them to a food pantry and government assistance. They might also need to consider more afforable housing. Renting might be a better option for them right now.

babysteps
babysteps
9 years ago
Reply to  Alicen

Perhaps in-kind contribution is the way to go? I bet you can come up with a few ideas that will make sure the kids aren’t malnourished without requiring you to hand their parents cash. If you are close geographically, invite the family over for a meal and/or offer to babysit the kids on a semi-regular basis so that you can feed them.
Does the family live someplace where food aid is available? Sounds like they might qualify.
Good luck!

Tightwad
Tightwad
9 years ago
Reply to  Alicen

Alicen, if I send you an email asking for money can I get on this gravy train too?

It’s great that your heart is in the right place but “loaning” money to family via credit card advances when you have your own debts to pay is silly.

sara
sara
9 years ago
Reply to  Alicen

Wow. It was very generous of you to want to help and it sounds like it comes at a high cost if you took a loan on a credit card to do it. It does not sound like you can afford to take care of them further. Of course you worry about the kids. I would tell them “I’m so sorry, we borrowed to lend to you and can’t borrow more, if you don’t have money to eat here is where the nearest food shelf is.” They sound like they are not in a good place and money seems to… Read more »

Lindsay
Lindsay
9 years ago

I agree 100% with JD!! My husband and i have a similar situation with his family. His brother is like JD brother. We have tried too many times to help him and all he wants is cash. My husbands parents are the same way too. It’s quite sad. They earn more than us yet never have enough money. Recently my husbands family asked for $10,000 as they knew we had saved cash to fix our porch and reroof our home. we refused. But offered to help in other ways but they only wanted the cash. They have not spoken to… Read more »

Adam P
Adam P
9 years ago

I’m going to have to read each and every one of the comments today because I could BE Dave, except for a few changes like: My brother and sister-in-law have 4 kids and neither works, they haven’t declared bankruptcy because they take money from my parents. And…my parents recently had another baby so I have a 3 year old brother who they are taking care of despite not having retirement funds (I did make them get term life insurance policies tho that will last until the baby is 21). They still work full time in their 60s and have yet… Read more »

Justin
Justin
9 years ago
Reply to  Adam P

Your mom is in her 60s and had a baby 3 years ago?

Adam P
Adam P
9 years ago
Reply to  Justin

Yes. Which…I hope people don’t do digging because it’s rare enough to take the anonymity out of internet posting.

Needless to say, they don’t make personal finance books about what to do when your spendthrift, not-saving, retirement age parents decide to have a toddler in their 60s.

And since I’m the only sibling with sense, they have named me executor of their estate and full custodian if something happens to them before he’s 21 (or 18…I forget now).

partgypsy
partgypsy
9 years ago
Reply to  Adam P

Maybe they can get their own reality show. Financial problems solved!

Rosa
Rosa
9 years ago
Reply to  Adam P

I have a ton of friends in this position – not quite the same age gap, but the exact same responsibility gap. One of my coworkers had her mom and teen sister living with her and her husband when she was only 23 or 24, because she and her husband were the only responsible adults in the entire family. Another has an infant of her own and a 6 year old sibling she fully expects to end up raising. Another ended up as the foster parent of her own younger siblings after her parents imploded. Your parents and your little… Read more »

Ky
Ky
9 years ago

My SIL has helped us out on a few occasions. We are paying her back as we can. She’s actually told us NOT to pay her back until we have a substantial emergency fund set up. Over the past three years, each of us has been laid off at least twice, draining our emergency fund to almost zero before we get employed again. Each time we get caught up, (trying not to jinx) one of us gets laid off, AGAIN. Thankfully, we’ve both been employed somewhat comfortably the past several months, so we’re paying off both vehicles in the next… Read more »

John
John
9 years ago

I sympathize with the parental dilemma, and also the mental illness angle brought up by “Mom of five” — It’s tough dealing with people who can’t be reasoned with. I’ve always felt it would be easier if my parents would just turn their affairs over to someone else. If it had to me, I’d do it, but really any sort of custodial oversight would change their lives so much. That said, there’s a wide chasm between ‘having a problem’ and being ‘ready to put your fate in someone else’s hands.’ I guess with addicts they call it “hitting rock bottom.”… Read more »

khadijah
khadijah
9 years ago
Reply to  John

I like that motto “no money without control”. That is sort of like what my family and siblings look at it too.
Leave your pride outside, in the house we talk openly and honestly, its a lot of tough love, but family is so much more important than any money in the world and any money problems that everybody would rather fix the money problems before it happens and before it gets in the way of family.

imelda
imelda
9 years ago
Reply to  John

I understand the sentiment behind “no money without control,” but you should think about the flip side of that. If you are controlling their lives, then it’s no longer simple generosity. You are asking that they accept your rules and values over their own.

This is just to say that if you demand “control” over your relatives’ lives in exchange for money, don’t expect effusions of gratitude from them.

LauraElle
LauraElle
9 years ago

I wouldn’t help an adult sibling* who consistently made poor financial choices but I would help my parents, regardless of their financial choice. If their financial skills were terrible, I would pay some of their bills myself (electric, water, garbage for example). If their skills were good, and they simply did not have enough money, I would offer a set amount each month or gift cards to various stores each month- the pharmacy, grocery, gas station. I would go over their Medicare and any supplemental insurance plans and make sure they had adequate coverage, particularly for long term care and… Read more »

Dan
Dan
9 years ago

Family and money — one of my favorite topics. I grew up lower-middle class and chose to attend a private college on the east coast. Between that and grad school, I’ve accumulated a fair amount of debt. When I got out of undergrad, I lost a job and ended up defaulting on about $10k of credit card debt. My parents paid the bills to get the creditors off of my back, and I’m slowly paying them back. They’re of limited means, so I figure I owe them in retirement — I’ve seen their 401k statements, and helped dad select some… Read more »

Rosa
Rosa
9 years ago
Reply to  Dan

isn’t it crazy to find out someone who’s always poormouthing you actually makes as much as you? My most chaotic sibling, always broke, always on the brink of homelessness, was making more money than us for YEARS. But they decided health insurance was too expensive, so every health issue put them on the brink.

khadijah
khadijah
9 years ago
Reply to  Dan

Would you be willing to help out your own parents had they not been there to help you out financially (paid your creditors)?

imelda
imelda
9 years ago
Reply to  Dan

Not only do I not comprehend the refusal to let your wife feed her poor father, I don’t understand why it’s your decision. Shouldn’t that have been a discussion? And while I don’t know you or how you think, have you considered that divorce is an incredibly painful experience? Yes, your FIL chose to leave a job. If he did it to be closer to his only remaining family, it sounds like a good decision. Would you prefer he be lonely? It sounds like we come from a similar background, and I know that many people who fought their way… Read more »

Dan
Dan
9 years ago
Reply to  imelda

Imelda, You bring up some good points, so I’ll give you my best shot: 1. With her family, it’s never “just this once.” How does one manage expectations? You buy lunch the first time, and now you start creating expectations. Since I don’t want to fall into that trap, it’s easier just to say no the first time. 2. Combined, we have $110,000 in student loan debt. We’ve just started building our emergency fund. You tell me whether or not we have extra cash to spare. 3. As far as being lonely goes… my father-in-law has an adopted daughter (who… Read more »

Coco
Coco
9 years ago

This is something I think about a lot, as my parents near retirement age. My sister and I are in our early 30s. I am in the early stages of financial stability, while my sister continues to rely on my parents for financial support. As people live longer and longer, I assume that eventually one or both of us will need to help out our parents either financially or logistically (with health matters and daily living). At this point I’m assuming it will be me. Part of why financial independence is important to me is that some of my relatives… Read more »

Deb
Deb
9 years ago

My brother and his wife are financially responsible now, but weren’t always so. Their credit plummeted, she bounced some checks, their ARM mortgage rose. They also had intended to have 2 kids, but the second pregnancy resulted in twins, and now they have 3 kids. My brother asked me to cosign a loan several years ago. It was tough, but I had to say no. He’s never asked for cash outright. I would probably give them gift cards for groceries and gas before I’d lend cash. I do feel obligated to help my mom out. She’s been disabled for some… Read more »

Misty
Misty
9 years ago
Reply to  Deb

Somewhere, there was a blog post about this, but I can’t remember off the top of my head who wrote it. The gist was this: Don’t help someone on a downward spiral. Wait for them to hit bottom and help them when they’re on the way back up. If I had a relative who had been very financially irresponsible in the past, but had obviously made major changes to their lifestyle and were trying to get their life in order, I would help them. On the other hand, if someone clearly has not learned from their mistakes and is trying… Read more »

Ash
Ash
9 years ago
Reply to  Misty

I think the article was on The Simple Dollar. “What is the ‘Bottom’?”

http://www.thesimpledollar.com/2011/05/06/what-is-the-bottom/

Misty
Misty
9 years ago
Reply to  Ash

Thanks Ash, I’m pretty sure that’s it. 🙂

Eric
Eric
9 years ago

Only give money if you do not expect to get it back, and you only think of it as a gift. Otherwise you will have hard feelings when the family does not really help themselves with your gift. My situation was a few years ago when my wife’s family was having many medical bills. We gave them a few thousand dollars to help with the bills. The money may or may not have been used for bills at that time, but a few months later there was a brand new HDTV in the family room, that cost somewhere in the… Read more »

Mulysa
Mulysa
9 years ago

Most of my immediate family is irresponsible with money as well. My older sister is well off, but my parents are swimming in debt and my younger siblings are always looking to be bailed out of some kind of trouble. My older sister and I both have the same policy when it comes to dealing with family: practical – not financial – help. That means when my brother asked me for $500, I said no freaking way. But when he ran out of formula for my niece, I took him and my sister-in-law food shopping. I don’t even trust him… Read more »

Annie
Annie
9 years ago

I really think it depends on the situation. My husband’s siblings are very financially responsible and if they ever had an emergency, I’d be the first to lend them money. Although, I’m sure both of them have an emergency fund in place. My own brother, on the other hand, I wouldn’t have given a dime. He spent money like it was water. He passed away two years ago and left behind a significant amount of debt. It’s all about the choices that we make. You can’t force someone to make good money decisions, and you only blur their decision making… Read more »

Josh
Josh
9 years ago

Millionaire Next Door ( http://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1563523302 ) has an interesting chapter on this subject; I believe they call it Economic Outpatient Care. The bottom line is those who live off their wealthier relatives tend to underperform.

chris
chris
9 years ago
Reply to  Josh

I see this in my own family. I am one of three kids. I have IL of the same social class as my parents and my one brother is single. My other brother has wealth in-laws that help them with things. However, the “help” doesn’t always seem that helpful from my point of view. They helped them finance a house they could have never qualified for with a regular bank loan and as a result have been pretty house poor ever since. They give them late model, but gas hogging SUV’s, but the still need to insure and put gas… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

Funny how GRS’s holier-than-thou “oh, everyone should donate to charity, it’s important” crowd turns into a “oh, not that guy, he doesn’t deserve it!” crowd as soon as you put a face to your charitable donation.

Oh, it turns out that a lot of the people who need charity have made mistakes or have bad habits? Who would have guessed…

Nicole
Nicole
9 years ago

I don’t see any contradiction. People are saying to help parents and to give in-kind rather than money. Most charities also provide goods and services in-kind rather than just giving out money. In-kind transfers and targeted transfers have many benefits that straight monetary transfers lack. That’s why they’re used even though they take more effort and money than just giving cash transfers. So long as they’re not completely fungible they change consumption patterns. People are also saying to make sure your ducks are in a row before you give money to family, the same holds true for charity unless you… Read more »

Adam P
Adam P
9 years ago

I can’t speak for anyone else, but my two charities of choice are the Toronto Humane Soceity and Care Canada.

One gives money to shelter animals and find good homes for them, and the ohter feeds starving children in under developed nations (without bibles given out with the help).

Neither of these recipients of my donations made “bad choices” except being born in the wrong place at the wrong time.

So, this doesn’t make people here hypocritical, necessarily.

Tyler Karaszewski
Tyler Karaszewski
9 years ago
Reply to  Adam P

It’s easy to look at distant children as blameless victims of their own situation, both because they are children and because you don’t know their individual stories. Animals as well look blameless, because they’re incapable of moral decisions. As such, you’ve managed to skirt the issue — you’ll never have to give money to someone who might not “deserve” it because you only donate to charities that that help the morally uncorrupted. Meanwhile, your own brother is someone you’ve no doubt seen have moral failings. I know I’ve seen this in my brother. He’s flawed and sometimes needs help. It… Read more »

Nicole
Nicole
9 years ago

It’s sound policy. It’s called “avoiding moral hazard.” Sometimes the non-market changes we make cause problems precisely because we’ve made those changes. http://en.wikipedia.org/wiki/Moral_hazard (It’s also a reason that some insurance markets fail.) Many people don’t believe that government should intervene at all in cases that produce moral hazard. So no EITC. But even Ron Paul thinks we should feed hungry kids because feeding them doesn’t cause them to stop working. They don’t have problems of moral hazard. That makes WIC popular. There’s nothing immoral about it. We all have constrained choices on where to spend our time and money and… Read more »

Adam P
Adam P
9 years ago

Nicole’s points are great. I actually don’t prefer to help people that made or continue to make extremely bad choices, which is why my charity goes to those two places. There are hundreds of other charities with similar recipients of people that need help and in my opinion deserve it. What is wrong with that, exactly? I’m not sure why this is such a problem. Others may be more lenient/forgiving and donate to people who are where they are primarily due to bad choices, I choose not to when I can. As for my brother, I don’t help him. I… Read more »

Misty
Misty
9 years ago

On the one hand, I’m with you on this one… I think that if you resolve to never give money to anyone who is responsible for their own situation, you’re not going to be helping anyone close to home. (Especially since humans have a tendency to blame the victim. It’s just a natural part of how our minds work.) I don’t agree with that kind of attitude, and I just can’t live that way. On the other hand, there does come a point where your family is just taking advantage of you, and it comes time to cut them off.… Read more »

Dan
Dan
9 years ago
Reply to  Misty

“Since then, I haven’t given her anything, and (surprise, surprise) she doesn’t contact me anymore.” I’m the same commenter in #51 above. Not too long ago, I told my wife that her brother was a leech. She got horribly offended. I then asked her, “Does he ever call you when he doesn’t want money?” (No.) She’s actually really pissed at him right now. He’s going through some particularly hard times, and she’ll call to see how he’s doing. He won’t answer the phone or call her back. She actually left him a message that was something along the lines of… Read more »

Misty
Misty
9 years ago
Reply to  Dan

The real turning point for me was when, at one point, my sister asked for money and I made the mistake of saying, “Sorry, I don’t get paid until Friday.” Then, /months/ later, I had turned her down for money again and she called my mom up to complain about it. She said that she “knew” that I had just been paid, even though I told her I didn’t have any money. I still can’t believe that she tracked my paydays for months after one slip on my part. I can barely keep track of my own paydays without a… Read more »

Mom of five
Mom of five
9 years ago

Thank you Tyler for posting this sentiment. I had actually come back to muse aloud at how surprised and sad I am that the default response here is not to help out family even if you are able. Our experience with my sister and her husband was such that the very act of needing to get money from us to pay their mortgage and their car insurance was enough of an impetus for them to turn their financial lives around. Yes, they had a flat screen TV and a sailboat which they couldn’t afford, but they were in a jam.… Read more »

Annemarie
Annemarie
9 years ago
Reply to  Mom of five

I’d make the same decision. Other family members aren’t always aware of what’s going on in a given situation.

Ash
Ash
9 years ago

I think that some of the “don’t lend” crowd (like me) have had bad experiences, but I think mainly this is a difference between one-time help and repeated aid. I’m willing to give/loan to family that is actually trying and has just fallen on hard times, but I’m not going to donate to someone that’s constantly lacking funds but is living as well or better than I am and refuses to make compromises in their standard of living, relative or no, near or far. I guess a good example would be the single mom that’s just been downsized but is… Read more »

Rosa
Rosa
9 years ago
Reply to  Ash

Exactly. I’ll help out once or twice. Bad luck happens to people. But once it’s a pattern? No.

Rosa
Rosa
9 years ago

I’m totally glad to help the local homeless shelter, and if one of the addicts in my family ends up on the street, I hope they have access to their local homeless shelter and a treatment plan. But, if one of the addicts in my family comes to me and says “Oh no, I put another mortgage on my house and gambled away the money and now there’s a balloon payment and we’re going to be homeless!” then I wouldn’t give them cash – they’ll just drink THAT away too. It’s not like I haven’t seen it happen. There is… Read more »

Slinky
Slinky
9 years ago

It seems to me that people are more so advocating a hand up, not a hand out policy. Personally, I mostly offer assistance and advice with the exception being some grocery cards for my grandparents. Their cardinal sin is being too generous to others when they can’t afford to, which I can’t entirely fault, but also means I won’t give them cash.

Michelle
Michelle
9 years ago

We’re in the same boat, but with my husband’s parents, who once asked us for a $10,000 loan. They overspent on their home, like many in the early 2000s. Then their business went bankrupt during the recession, yet their spending never changed — even after it became clear that they were headed for financial issues. We decided not to loan them money because 1) it was part of our own emergency fund, 2) we would have trouble saving another $10,000 quickly because of our own economic situation at the time, 3) it wouldn’t solve any problems — just keep them… Read more »

khadijah
khadijah
9 years ago

Its wholly irresponsible (in my family) to watch another family member commit financial (and/or life) mistakes and NOT intervene. This is not the ‘American’ way, people have too much pride and they want to do things their way because… they’re free to do whatever they want… until they are knee deep in trouble. Even then, people still have too much pride, which leads them back to their old ways again. My sisters and I are pretty tight, we always chip in money to fix/renovate the house we grew up in. We watched our parents and uncles/aunts help our grandparents financially… Read more »

Blu_Frog
Blu_Frog
9 years ago

While reading JD’s post, I immediately thought of a post on the ’48 Days to the Work You Love’ Blog (By Dan Miller). There is some very sound advice from one of history’s most respected persons: Abraham Lincoln. You can find the post titled “Need a quick loan for the hard times?” at http://www.48days.com/2011/03/29/need-a-quick-loan-for-the-hard-times/ But, as for the parents, openly talk with them about how you might be able to help themselves. Can you offer them a “job” of babysitting their grandkids (Date Night!), gardening at your house, or other things they might be passionate about that would give you… Read more »

Stephanie
Stephanie
9 years ago
Reply to  Blu_Frog

Oooooh, I like that! I have not read it before.
I wonder what the step brother did??

shares