Helping Family Financially, When Has the Help Gone Too Far?
Before offering your support, consider the impact on your own financial stability and overall well-being
By Melissa Jackson
When faced with a request for financial help from a family member, it can be tempting to agree right away to avoid any hurt feelings or awkwardness. However, before agreeing, it’s important to consider your own financial stability and mental well-being when making the decision. Here are some tips to keep in mind when helping a family member financially starts to go too far.
Set Your Emotions Aside
As challenging as it can be to see a loved one struggle financially, try to leave emotions out of your decision. A recent survey from TransUnion found that almost one-in-three Canadians (28 percent) expect to be unable to pay at least one of their current bills and loans in full. Of those respondents, 22 percent planned to borrow money from friends or family to make up the difference.
If you’ve ever been in this situation yourself, or know someone who has, then you’ll know how emotionally charged it can be – both for the individual making the request and the one being asked for help. It’s no surprise that when it comes to money, family relationships can be complicated, and when emotions run high it can be challenging to have productive discussions. Try to keep the conversation neutral and objective. That will make it easier for everyone to consider their options and navigate the situation successfully.
Be Aware of Visible Signs of Financial Trouble
When a family member is struggling with money, eventually you may notice visible signs of financial trouble. Debt is often a symptom of deeper issues, such as relationship tensions or communication problems. Facing embarrassment or uncertainty due to household spending problems or a reduction in income due to illness or injury can also exacerbate financial difficulties. To help provide guidance or assistance around a lasting debt solution, identifying and addressing these underlying problems is a key step. Signs that your family member may be struggling include:
- A more disorganized appearance to their home and documents
- Bills and debt collection letters around the home
- Distressing and frequent phone calls
- Appearing sleep deprived or extra stressed
- Missed appointments, e.g. avoiding family and friends
- Strained and/or limited communication
Warning Signs of Financial Trouble
Confirm Whether It’s a One-Time Crisis or an Ongoing Situation
Before agreeing to provide financial help, confirm whether your family member is facing a one-time crisis or an ongoing situation. From a practical standpoint, the kind of help you will be able to offer – e.g. emotional, financial, organizational – will depend on the type of situation they’re facing. Something unexpected or temporary – e.g. a broken water heater – compared to something more long-term and costly – e.g. rent/mortgage arrears, or eviction — will determine your time and resources.
Beware of Bailouts
While offering financial assistance to a family member can provide them with much needed relief from stress, beware of bailouts! If you’ve previously assisted a family member, it’s essential to evaluate whether your help is effective or if it reinforces financial dependency. While providing monetary support is one way to assist, there are other ways to help loved ones without directly giving them any money.
When individuals consistently rely on financial support from family or friends, they may stop taking proactive steps to manage their finances and underlying issues more effectively on their own. Maintaining a balance between helping them out and encouraging self-sufficiency is key.
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Decide On Your Financial and Emotional Boundaries
When deciding whether you can provide assistance to your family member, it’s important to be aware of your own financial and emotional boundaries. Go over your budget to see if there is any room for you to help and determine if these funds are a one-time gift or if repayment is expected.
If you expect to be repaid, evaluate whether repayment is realistic based on your loved one’s circumstances and their past financial behaviour. Additionally, reflect on your feelings about helping—do you feel positive about it or are feelings of resentment starting to creep in? Compassion and practicality – for your family member and yourself — are essential.
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Consider the Impact on Other Relationships
As you weigh the pros and cons of assisting one family member, think about how that decision may impact your other relationships. For example, senior parents with multiple adult children often strive for fairness and equality but it becomes challenging if one child monopolizes their financial support. It could potentially affect the parents’ ability to assist other children or distribute an equitable inheritance.
When a “helping hand” becomes an expected “handout,” it’s a sign that the help has gone too far. While loved ones may face difficult choices due to their circumstances, putting your own financial and emotional well-being at risk isn’t the solution.
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Encourage Them to Explore All Debt Relief Options
Encourage the family member experiencing financial problems to explore all debt relief options first. If they haven’t already done so, suggest that they contact one of our credit counsellors to identify the most suitable solutions. Their credit counsellor will provide them with a comprehensive overview of viable options, including some they may not have been aware of, and answer their questions. If they’re open to it, offer to accompany them to their appointment to provide emotional support and to help them go over their options afterwards.
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Professional Credit Counselling Help is Available, for Free
Needing outside help with personal finances can feel daunting to anyone, so let your family member know that professional help is available for free. Receiving information and guidance from an accredited financial counsellor can offer peace of mind and a new sense of hope as they find ways to navigate their financial situation.
Updated: Oct. 30, 2024
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