How to Deal With a Financially Irresponsible Relative

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When raised in a close-knit family, it’s only natural that you want to help those you love. So, if I’m in a position to do so, I usually do whatever I can to assist. However, there are times when those you love will ask you to give until it hurts…financially. While no one wants to watch a family member struggle, you must learn how to deal with a financially irresponsible relative.

Recognizing the Difference Between Helping and Enabling

Without a doubt, the need for financial help has greatly increased since the beginning of the pandemic. In a recent survey, 45% of parents said they recently gave adult children financial assistance. Similarly, increasing inflation and cost of living have also impacted many seniors living on a fixed income, causing a greater need for their children to cover their expenses.

Although we have lived through unusual circumstances over the last few years, stressful economic conditions will exacerbate existing problems. For example, if you already have a financially irresponsible relative, their behaviors may become an ever greater strain on your family. Therefore, you must recognize the line between helping and enabling.

Dealing With a Financially Irresponsible Relative

It’s one thing to ask for help when finances are tight. But, it’s completely different if asking for handouts becomes a habit. Therefore, you must establish and ensure your loved one understands the limits to your financial support.

It doesn’t help anyone if you constantly bail them out of financial trouble when they never change the behavior causing it. Not only is it unlikely that they will ever be financially independent, but it also puts your future at risk.

I’m not saying that you shouldn’t help family members in need. However, it’s wise to clearly establish boundaries and explain what you are willing to provide. Here are some helpful tips my family uses when discussing financial assistance:

Review how much support you have already given.
Offer to look over their finances and make a budget.
Help them find a job.
If you decide to give them money, define whether it is a gift or a loan. If it is a loan, put the terms in writing.
When you cover their payments, ask for receipts and copies of their bills. Or, make direct payments to the company, institution, or lender to ensure the money is used as intended.
Set clear outcomes if the irresponsible behavior continues.

Protecting Your Finances

However, you must remember that it’s okay to say no. You also have to recognize the importance of your own needs. And as the old adage goes, you don’t need to set yourself on fire to keep others warm.

Unfortunately, this requires you to not only establish boundaries with love ones, but also enforce them. Mixing family and finances gets tricky with a financially irresponsible relative. Although you care about their well-being and want to help, you can’t sacrifice your own stability. Sometimes, loving someone means telling them no. At some point, everyone must learn how their choices impact their finances and those around them.

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Jenny Smedra

Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.