Does your heart sink when you see a text from a certain relative? Dealing with a financially needy family member can drain your pocket and wreck your relationships. Instead of jumping onto your banking app to do a quick money transfer, take a reality check.
Family should always have each other’s back, particularly in times of need. Life happens – with retrenchments, unexpected medical expenses or even death or divorce, a relative may reach out for temporary financial help.
However, if bailing someone out becomes a regular event, they may be financially irresponsible and abusing your kindness.
It’s easy to fall into the trap of enabling. ‘Our biggest mistake is to continue giving money to a family member who does nothing to change their situation,’ says Lizette Volkwyn, Master Life Coach and author. ‘When we lend money, we should insist that they make a permanent change and break the borrowing cycle.’
IF YOU SAY YES…
If you can afford to, you may agree to help in a number of ways, from giving cash to buying food or gift vouchers, or paying one or more of their bills. Make sure you are clear on whether this is a gift or loan. If it’s a loan, agree on how and when it will be repaid. Everyone’s then on the same page, but this isn’t foolproof – you may find that relative knocking on your door again, despite your ground rules. But you’ll just have to refer back to your conversation and stick to your guns.
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DON’T EVER SIGN ON THE DOTTED LINE
If you don’t have the cash to fork out, your cash-strapped relative may ask you to sign surety for them on a credit agreement. This is a huge risk as you would have to pay this back if they default. ‘A creditor will be able to attach and sell the individual’s personal property, including their home, cars and anything else of value,’ warns consultant J’Retha van Rensburg from Burger Huyser Attorneys. Most suretyship agreements also do not specify the amount for which the signatory can be held liable for, adding even more risk. ‘If you have to sign personal surety for a loan, ensure that it’s limited to that particular loan and is cancelled when the loan is repaid,’ advises J’Retha.
So avoid this pitfall – while it may seem a simple enough request to sign surety, it could be deadly to your own financial situation.
YOU CAN’T POUR FROM AN EMPTY CUP
The simple rule is, if you can’t afford it, don’t lend it. Also, do not go into debt to help them out – you’ll need to service this debt and it may affect your credit rating if you battle to keep up with repayments.
Also, if helping means putting your own financial needs on ice you may eventually resent your needy relative, harming your relationship. Rather be honest (although this may not be appreciated) and encourage them to find a permanent solution.
It’s easy to fall into the trap of enabling
KNOCK-ON EFFECTS
Mixing money and family can be tricky, creating tension all around. If you refuse to give, your relative may feel rejected and even resentful, blaming you for their situation. If you do give money, you could damage the relationship with your partner, particularly if they are not on board. You can find yourself feeling damned if you do and damned if you don’t.
Any money you give away is money that can’t be used for your family’s goals, so there’s always an impact, either immediate or long-term.
You need to place your family first and respect your partner – never jeopardise your relationship because of a financially needy relative. If you are asked for money, discuss this with your partner so you can make a joint decision, which will solidify trust in your relationship.
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SETTING BOUNDARIES
Being the go-to person for money can leave you feeling exhausted, overwhelmed and powerless. Setting boundaries takes back your power and is a form of self-care. It may feel selfish but taking care of your own finances first means you won’t be a burden to your children or anyone else later on in life. It also encourages your needy family member to make some lasting changes.
Boundaries are coupled with our core values, explains Lizette. We set them according to what we stand for and if caring, support and empowerment is part of your core values, it’ll be tough saying no to requests for money. ‘The challenge here is to put the emotions aside and understand the reality for what it is,’ she says. ‘The relative must be willing to change their ways – learn to work with money and alter their spending habits. If not you need to step up and focus on your values of responsibility and growth.’
Sadly, of course, if they won’t change despite your boundaries, they’ll simply move on to someone else to bail them out, blaming you for their poor habits.
RING IN THE CHANGES
People are often embarrassed to admit they can’t work with money so it can be a delicate matter to address. Suggest that they share their budget with you, so you can help them structure their expenses and set small goals. Or they can see a money coach or even a debt counselor so that they can make long-term changes. If they refuse, you may need to review the support you’ll offer.
ME BEFORE YOU
It’s important to remember that we’re not responsible for anyone else, no matter what our heart tells us. Putting our values and responsibilities first isn’t easy, but we need to be true to ourselves. ‘Even if the relative resent us for having a better life than them, we all live by our own choices,’ concludes Lizette.
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Feature image: Unsplash
Written by Sylvia Walker for the May edition of Woman&Home Magazine.
