Watching a family member struggle with financial problems is difficult, but you can do several things to help them.
When someone you know is having problems with money, your first instinct may be to give them a loan. While sending money can help them with short-term financial problems, it won’t help them fix bad habits.
Instead, you should go through several steps to teach them how to avoid money problems before giving a loan. We’ve got all the info you need to know so you can properly help them.
Here’s how to help a family member with financial problems!
Help Them Set a Budget
When it comes to helping someone with money problems, one of the best things you can do is help them set a budget. While many people overlook this, setting a budget is highly beneficial because it’ll help one figure out what their limits are.
To help them set a budget, you must ask them how much they earn. They may feel uncomfortable sharing that info, but ensure them that it’s necessary.
After finding out how much they earn, you’ll need to know what their monthly obligations are. Subtract monthly bills from their income. The money they have left can be used for the budget.
Set aside a reasonable amount for food, gas, and entertainment. If they don’t have much money left after paying bills, food and gas should be the only things they spend money on.
Find a Resolution for Their Financial Problems
After helping a family member set a budget, you can find a resolution to their financial problems. For example, if someone is struggling to repay a mortgage, you could help them refinance it. This would allow them to change how much their monthly payment is.
If they’re unable to get loans due to poor credit history, you can find them a credit-building card. Giving them money should be the last thing you do because it’ll prevent them from learning how to manage it.
Avoid Giving Them Money Unless Necessary
In some cases, giving a loan to your family member may be the only way they can get out of their financial problems. If you get them to agree that they’ll work on resolving their solutions, you can consider sending money to them.
However, we encourage you to make this the last thing you do because if they don’t repay you, it’ll be hard to trust them.
Sending money to a family member is often better done with an online service. It’ll give you documentation so no one can try to say you didn’t give them money. Consider using a service like PayPal or Remitly. If you look at Remitly reviews, you’ll see that many people use their service for similar reasons.
If a Family Member Is Having Financial Problems, You Have the Solution
The next time a family member talks to you about their financial problems, you can provide the guidance they need to fix them. Instead of having them rely on loans, we encourage you to follow this advice and show them how to better manage their money.
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