You’ve probably heard about not mixing money and family. When you lend money to family (or even friends) it tends to end badly. But I’m not here to talk about why you shouldn’t mix the two. I am going to talk about why you shouldn’t help out family members with money issues when you have money issues of your own. Below are 3 things to think about before helping others with money when you have issues of your own.
Why Not To Help Out Family Members
You’re Hurting Yourself
If you are in debt and you are going into more debt (or debt in general) to help out family members, you are making a mistake. While you might feel good helping them out, you are just putting yourself in a worse situation. If you want to help out, give what you can afford. If they need $1,000 and you can only offer $50, then so be it. Even though you are family, you have to make sure you are on solid financial ground.
If you don’t put yourself on solid ground, you are just making your life harder and adding undue stress to your life. It’s not easy to tell someone you can’t help them out, but being honest is better than going into debt. You risk destroying your financial life in the process.
You’re Hurting Your Family
For some, if you help out a family member, they will see you as their security blanket. Most that do this don’t realize it at the time, but it’s the truth. They know that they can screw up financially because you will be there to bail them out. This does no good for you or for them. Part of becoming an adult is being accountable for the mistakes we make and the messes we get ourselves into.
While there are times asking for help financially is required, most of time, it is not. If you do lend money to family members, be sure to know how much you are lending and how often a certain member is coming back for more help. This is the easiest way to tell if you are enabling them.
You’re Hurting Your Kids
If you go into debt to help out other members of your family, you are hurting yourself, and your kids. Currently, you might not be able to afford the things your kids need to grow and thrive. In the future, you are hurting them by showing them poor financial habits. You are telling them that family is more important than taking care of yourself. While family is important, you can’t contribute to a family if you are in debt.
Finally, when it’s time for you to retire, if you are in debt because of helping out others, chances are your now adult kids are going to have to provide for you financially to get by. Suddenly, you are hurting them and forcing them to add an additional expense to their lives. This can end up hurting their kids (your grandkids) as well.
As you can see, going into debt to help out family members is a bad idea. While at the time, going into a small amount of debt might not seem like a big deal, it can quickly and oftentimes does, spiral out of control. You end up not only hurting the person you were trying to help, but also end up hurting yourself and your kids and grandkids.
While you want to help, be honest and help out with only as much as you can afford. If you can’t afford to offer money, don’t despair. What they might really need is advice or the skills to learn how to budget and save their money. It all goes back to the old parable, ‘give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.’