Financial help as gifts?

[am_vanquish]

My mother & my sister are horrible with money. In general, they prefer to avoid personal finances altogether (which is a large part of their problem), so we don't talk about it much. My wife & I never force advice or judgment on them, but occasionally offer support and tell them that we'd be glad to offer assistance in the form of advice any time ... all they have to do is ask. Every once in a while they'll get a burst of motivation and ask about setting up a 401(k), budget, etc. and I gladly walk through it with them. However, these spurts never really last very long.

As the holidays approach, the DW & I are discussing x-mas and b-day presents for Mom & Sis. Our policy in the past has been to buy things they NEED around the holidays in the hopes that this will allow them to put their money toward catching up on debt and/or building savings. Examples include new tires for my sister's car, purchasing uniforms for mom's job, maybe picking up a medical bill or house repair (all in the form of payment directly to the service provider, not cash to family). However, they consistently choose to use the extra money we saved them to get themselves "something special." We try not to judge them for doing this, as we both understand that they have difficult circumstances.

This year, DW has suggested to take a "Give a man a fish, teach a man to fish" approach to gifts. She has suggested that we offer to get them a Dave Ramsey kit or a session with a personal finance counselor or something along those lines. I agree with the philosophy, but I just don't know how I feel about giving this as a gift. I would hate to offend them and this might be crossing the line of forcing it on them.

Anyone have advice or experience with a similar situation? If you think it's a feasible concept, what would provide the most help with the lowest perception of offense? We're thinking books, CD's/kits, local or in-person seminars .... open to anything.

[graceful]

Very admirable.

Perhaps offer to "match" every $ they place into an IRA, Roth, Long-term CD, whatever up to a certain cap, of course.

Hard one to do without offending, I guess.

Good luck.

[Radiance]

I was stuck in ignorance and avoidance untill I heard a Suze Orman's show.
So inspirational!

Maybe you can sweeten the deal by writing something personal and stating you thought about this gift because you love them very much.

You can watch it yourself first and just share your own enthusiasm for the subject when presenting the gift. This way it is not about them needing this type of help but you sharing something you really liked with them.

That is what I did with a copy of "the secret" it was a gift to my friend and neighbor who had been so negative that she was affecting her family, her marriage, she was becoming a bitter person.

Another idea is to invite them over to watch at home? over popcorn or chocolate?

Try to imagine them very receptive of your gift and ideas will come your way.
You could be very well saving them!

[wincrasher]

I think if this is your only gift, it could be seen as offensive. If it is "in there" with the rest, then it would probably be OK.

I share you pain though. Last Christmas, just after the financial crisis hit, my sister kept lamenting about her fear of getting laid off, they have no savings, etc., what are they going to do, etc.

In addition to the other Christmas gifts, I gave her an envelope with $1,000 dollars in it. I figured that it would give her some peace of mind and she'd save it as an EF - in fact I wrote that on the note inside with the money. Instead she spent it on a bunch of junk the next week!

[kork13]

I think it's a great idea, but as you mention, it could easily be an awkward situation. Talk to them about it. Ask them if they'd be willing to work with a financial counselor on your dime. As Radiance suggested, be clear that you offer it because you care about them, and really think that it could help them out for the long-term future. Just be aware, if financial responsibility comes in spurts for them, you need to make sure that they continue working with the financial counselor more than just the once or twice to get them started. Otherwise, they could easily lose the motivation again, and just revert to the "good old ways".

[creditcardfree]

Are these people ready to change? If not, the offer is simply wasted. They weren't ready in the past to make good use of the extra money, are they now?

I'm not opposed to giving a Dave Ramsey book or similar with gifts, but a counseling session, even if taken, may not have the same outcome as it would with someone who is sick of debt, or ready for change.

I've given cash, gifts of need and books to family/friends in need of help, but none of them were or still are ready to change as a result of my gift. It doesn't mean you can't try.

[disneysteve]

Originally Posted by creditcardfree

Are these people ready to change? If not, the offer is simply wasted. They weren't ready in the past to make good use of the extra money, are they now?

I tend to agree. You can't force change on people. They'll change if and when they are ready to change, as frustrating as that may be to the rest of us. They are grown ups and have to be left to make their own decisions. Keep letting them know you are available for support and advice if desired.

[am_vanquish]

Originally Posted by creditcardfree

Are these people ready to change? If not, the offer is simply wasted. They weren't ready in the past to make good use of the extra money, are they now?

I'm not opposed to giving a Dave Ramsey book or similar with gifts, but a counseling session, even if taken, may not have the same outcome as it would with someone who is sick of debt, or ready for change.

I've given cash, gifts of need and books to family/friends in need of help, but none of them were or still are ready to change as a result of my gift. It doesn't mean you can't try.

My sister has expressed direct interest in getting things under control recently. She and her husband were both laid off in 2008. She went about 9 months before finding a job. He was laid off for 15 months and just got a job offer last week ... should start in October if it doesn't fall through. Now that they've been forced to live the "simple life" for so long, she's expressed interest in doing things right this time around. She's just never been shown what to do & how to do it. I asked her last night if she'd be open to the idea of a help as a present and she was actually excited about it. She asked for a CD or workbook or something because her husband will refuse to go to a counselor and she probably won't just read a book all the way through. Any ideas on what might fit their needs?

Mom is still oblivious, so we know she probably isn't ready ... but we're hoping if Sis gets back on track then it will motivate mom. DW suggested maybe just buying Mom a copy of Quicken or something like that and throwing it in with some other gifts. Just not sure if she'll use it. We could do just a book for her as well ... just not sure which one. I'm thing that maybe Suze Orman or Elizabeth Warren might be appropriate for a 40-something in denial?

[disneysteve]

I think there are 2 basic types of personal finance books. One type is the nuts and bolts kind that walks you through exactly what to do. The other type is the philosophy type that tries to teach you the right mindset about why it is important to do things a certain way. For someone just starting out, I think the philosophy/mindset is just as important, if not more so, than the actual step by step guide. I'd get a copy of "The Wealthy Barber" for that. Then perhaps Suze Orman's "Young, Fabulous and Broke". David Bach's "The Automatic Millionaire" is a good one, too.

[Radiance]

Originally Posted by am_vanquish

I'm thing that maybe Suze Orman or Elizabeth Warren might be appropriate for a 40-something in denial?

I am 39 and Suze Orman worked for me ...and I only saw one of her programs, that propelled me to look for help and I got here and worked full steam! Yeah me!

I don't know who Elizabeth Warren is.

[creditcardfree]

Glad to hear your sister is on board! Maybe you could offer to have mini finance sessions with her and her husband and they start this new journey.

As far as reading material, personally, I like Mary Hunt, Dave Ramsey, Suze Orman, David Bach, Andrew Tobias, Vicky Robin (Money or Your Life), and Jean Chatzky. Of course, these are all authors of books. I'm sure most of them have audio books, too.

[disneysteve]

Originally Posted by creditcardfree

Glad to hear your sister is on board! Maybe you could offer to have mini finance sessions with her and her husband and they start this new journey.

Or you could just give her a free subscription to SavingAdvice.com and let all of us counsel them.

[am_vanquish]

Originally Posted by disneysteve

Or you could just give her a free subscription to SavingAdvice.com and let all of us counsel them.

That's the first thing DW said when we came up with this idea!

Originally Posted by creditcardfree

Glad to hear your sister is on board! Maybe you could offer to have mini finance sessions with her and her husband and they start this new journey.

I can tell that she's a bit hesitant about too many sessions, she doesn't really want me delving too deep into their lives (which I completely understand). Last night we talked & I emphasized that all I want to do is show her what tools are available ... I don't ever have to see any actual numbers from their debts or accounts. I'm trying not to push and let this is their process, not mine. But at the same time, I feel a need to capitalize on this newfound interest. This is what I suggested to her last night:
1. Talk with her husband so they can come up with a plan of what they want to accomplish together financially after he starts working again.
2. She & I will have a discussion about what they came up with ... I'll help her sort their goals according to what will have the biggest impact with the least amount of work. (I have a feeling I'll need to throw out a few other goals ... things they didn't think of but should consider).
3. She and her husband talk it over again with the extra info from me. Together, they come up with a list of goals: 3-month, 6-month, 1-year, and 5-year.
4. She calls me back with the list & I talk to her about what they can do to accomplish the goals.

I really want to get them to create a budget, but she's already mentioned that she doesn't want to be "as big of a tightwad as [her] brother." I can just tell that as soon as the word budget comes out of my mouth she's going to become a bit more resigned. I can't figure out how to pitch it ... probably just throw it in with step #4.

[zetta]

Since she' s asked for workbook-style things, I would go with that.

David Bach has two:
Finish Rich Workbook
Automatic Millionaire Workbook

I'd also suggest YNAB software -- it comes with free online classes on both how to use the software and the budget philosophy, and an online community that she might find helpful. The user manual also incorporates the budgeting philosophy.

Personal Budget Software - Free Home Budgeting Course for the Family

[disneysteve]

Originally Posted by am_vanquish

I really want to get them to create a budget, but she's already mentioned that she doesn't want to be "as big of a tightwad as [her] brother." I can just tell that as soon as the word budget comes out of my mouth she's going to become a bit more resigned.

Forget the word "budget" as it has too many negative connotations. Call it a financial plan because that's really what it is. It isn't just about spending. It is also about debt repayment and saving for short and long term goals.

[creditcardfree]

If they have debt, you might use a debt calculator to simply show her how repayment changes depending how much they send in each month. "if you send in an extra $200/mo, you will be debt free in x months, but if you send in an extra $400/mo you with be debt free in X months!!"

Often the frugal nature hits when one realizes the less they spend on stuff, the quicker they can get out of debt. Examples help drive that home!

I'd be careful to not go to far into the future with the plan to begin with. Many people try to do to much too quickly. It's safe to say it can be difficult to pay off debt, buy a boat, save for a house and kids college all at once. It's overwhelming when there are too many goals...with many of them so far off. I'm sure you will help her get there eventually!

[disneysteve]

Originally Posted by creditcardfree

I'd be careful to not go to far into the future with the plan to begin with.

I agree except I would make sure not to ignore retirement planning from the start. If they are in their 40s and have not been saving for retirement, they need to start immediately.

[scfr]

When my sister hit a financial low point (had to come to me for money because she could not afford to have her cat who was in pain euthanized), I felt I had to do something. After turning to the SA boards here for advise, I had a calm & loving & BRIEF chat with her explaining my concerns. I then offered to buy Suze Orman's "Women & Money" book for her, and offered to give her any advice I could. She took me up on the book, not on the advice. Since then, she has made quite a bit of progress. I know she will never save as much as I think she should, and she still spends more money on unnecessary things than I think is wise in her situation, but she has managed to put away money for emergencies and save for short-term goals. So overall I'd say my gift was successful.

Based on my own experience, this is my advice:

1. Make the gift an "extra" gift. Give it now, with no expectation of reciproicity. Go ahead and give what you normally would for Christmas or birthday, so they don't feel they are getting "cheated" out of a fun gift.

2. Give the gift in a form that you think will appeal to the recipient. I thought my sister would like Suze's style (flamboyant, with an emphasis on feelings & the appeal to "woman power") and I was right. I also know that my sister is a voracious reader, so a book would be best. But if your recipients haven;t cracked a book since high school but love to watch TV, then a DVD would be better received. I also knew a "beginner's" PF book would be best for my sister.

3. When you give the gift, give a brief, calm, non-preachy explanation of why you are giving it. Express your concern, and let them know the gift is because you love them.

4. Offer additional advice or support, but then you're just gonna have to stand back and let them come to you (or not) if they want to. Give the gift and then let them decide what to do with it.

Good luck!!!

[kanjoh]

There are some really great books out there that could make great gifts. Learn to Earn by Peter Lynch and I will teach you to be rich by Ramit Sethi are great options. A counseling session might be a bit tough to swallow though.