How do you feel about helping family members with debt?

[disneysteve]

We helped out my MIL who doesn't carry a lot of debt, but prioritizes money in a way DH and I don't 100% agree with.

But by helping her out, weren't you then supporting her misplaced priorities? I guess what I wonder is what does the person learn if they screw up and someone else bails them out? Seems to me they learn that they can keep on doing what they've been doing rather than changing to a more responsible way of managing their money.

I'm with maat55. If someone is struggling, I'll be happy to sit down with them and help them work out a plan to turn things around but I'm not going to pay for their mistakes.

[Mjenn]

But by helping her out, weren't you then supporting her misplaced priorities? I guess what I wonder is what does the person learn if they screw up and someone else bails them out? Seems to me they learn that they can keep on doing what they've been doing rather than changing to a more responsible way of managing their money.

But that is kind of the point. I am not doing something to teach her a lesson,or show her how I think she should do things. She is a grown up, and chooses to live pay check to pay check. If she has car trouble or something else, I wouldn't step in. But she was in pain and we knew she would never prioritize herself, so we helped out. Because we could.


I wouldn't step in if I wanted something in return - be it a learning experience or money back, because I wouldn't want that aspect in our relationship.

[JoshuaHeckathorn]

In general, I wouldn't step in and provide monetary assistance either, but in some circumstances (e.g. emergency medical need) I would have to break my own rule. And if I did, I wouldn't expect to ever get paid back. My view is if you're prepared to give money to a family member, then you should simply treat it as a gift. If you eventually get paid back, that's great, but don't count on it.

And no, I would never ask for monetary assistance from a family member, but that's probably just because I'm too prideful and not humble enough to actually do it :-). Maybe I would feel differently in the heat of the moment...it's hard to say.

[snafu]

I've given money in increments of $1,000. - $2,000. to my late brother several times. He just couldn't manage money and made ridiculous financial decisions. It never occurred to me to expect to be re-imbursed. Our mom gave him significant sums which were also poorly managed. Some loving, wonderful people just can't learn from experience!

[jaine]

So I'm helping my brother with his debt, $250 a month. Then I found out he quit his new job. Mostly because it wasn't creative enough and they wouldn't let him keep the blue highlights in his hair (they originally said they would). I'm starting to question whether or not I want to keep helping him. Quitting a new job just doesn't seem like something he would do if he were really motivated to pay it off. I don't want to be pulling more weight than him. I might end up telling I have some debt of my own that I have to snowball. And then double up my college savings for my little sister....at least she is motivated to do something with my help!

[disneysteve]

So I'm helping my brother with his debt, $250 a month. Then I found out he quit his new job. Mostly because it wasn't creative enough and they wouldn't let him keep the blue highlights in his hair (they originally said they would). I'm starting to question whether or not I want to keep helping him. Quitting a new job just doesn't seem like something he would do if he were really motivated to pay it off. I don't want to be pulling more weight than him. I might end up telling I have some debt of my own that I have to snowball. And then double up my college savings for my little sister....at least she is motivated to do something with my help!

And that is the problem with handouts and entitlement programs, whether they come from the government or from a well-meaning relative. Rather than encouraging people to do more on their own, the opposite occurs. It makes people lazy because they know they have that money coming in. They become dependent on the handout. Keep us informed as to what happens when you cut him off. I fear it won't be pretty but I wish you the best.

[My English Castle]

I've had some bad experiences lending to friends, and I currently have a friend who is struggling with her brother's housing issues. They're in the middle of settling her mom's estate, and she gave him some of the cash early so he could buy a house and get the $8000 Federal money. What did he do with it? He went to Colombia to see a woman he met on line. arrrgh.

I'm sure there are appropriate times to lend to family, but so often it's a problem.

[disneysteve]

jaine, I'm curious - are you actually paying debts for your brother or are you giving the money to him with the intent that he use it to pay debts? If the latter, what are you doing to make sure that he is actually sending that money to his debts and not spending it elsewhere?

[mmgarren@yahoo.com]

Most of the time I would say no. I've talked to my daughter and her husband about living within their means and loaned them about 38,000. for about 10 years. I paid for it dearly with missed economic opportunities and more financil pressures now since I am 70 years old and would feel more secure if I had the money. I chalk it up to experience and wouldn't do it again.

[Joan.of.the.Arch]

Wow, that sure was soon after you posted your question. Coincidence?

[jaine]

I only helped him 1 month so far. I'm really not sure what I want to do next.

There are 2 things that make this a gray area for me:

A) I know, without a doubt, I would quit too, just like he did, if I started a new job and I didn't like it. I have done it in the past - there's the proof! A few years ago I started what I thought was going to be a software development job, it turned out to be a quality assurance job (basically a career dead end for me) so I quit soon after starting, without another job lined up. And that was in the middle of me trying to pay off some debt. Deja vu. It worked out just fine BTW ... I got another job and paid off the debt.

B) $250/month is not a lot of money to me. I could spend that much on an impulse purchase without derailing my budget - in fact I almost did the other day. If help him for a full 12 months, that's only 3% of my income, but (I'm just guessing?) probably about 30% of his.

I'm just keeping the wheels turning for now while I decide. No point to rush a decision since the amount is so small and I would have done the exact same thing if I were him, starting a new job that I didn't like.

[disneysteve]

If help him for a full 12 months, that's only 3% of my income, but (I'm just guessing?) probably about 30% of his.

I doubt that this is true. That would mean he only earns about $9,000/year.

If you are committed to helping him, and he is accepting your help, I think he needs to be willing to sit down with you and open his books. You should know how much he earns, what his expenses are, how much his debts are, etc. I wouldn't just blindly give him money without knowing the details of his situation.

[jaine]

I think I can either give freely, or not at all... the "strings attached" kind of help just doesn't sit right with me. It would bother me deeply to give or receive help with strings attached. I think I have to just think about this for a while and decide if I'm comfortable giving freely. If not then I'll come up with something that I need to redirect the money towards. Under no circumstances would I ever tell him "I disapprove of something you're doing" - because I'm not there, I'm not him, and I have no clue about his reasons. I just don't think that adults have the right to tell each other what to do. If giving him money makes me think that I have that right, then I shouldn't give him money.

I think the squeamishness comes from a bad memory of my dad trying to use money to influence my dating decisions when I was in college. He threatened to stop helping me pay for college if I continued to date the guy I was with. I turned down the money, got a second job, and moved in with the guy just to make a point and teach my dad a lesson. It's wrong for adults to try to tell each other what to do. (BTW, the point was taken and my dad doesn't try to steer my life any more.)

[disneysteve]

I realize you don't want there to be strings attached, but whether you actually attach those strings or not, they will exist. Ask yourself how you will feel if you are giving him $250 every month to help with debt and later learn that he has been spending it on beer or gambling or women or premium pay-per-view cable shows or video games or anything else other than debt. Will you be okay with that or will you feel cheated or betrayed? How will that affect your relationship with your brother? Is potentially putting that kind of wedge between the two of you worth it?

[Like2Plan]

I think I can either give freely, or not at all... the "strings attached" kind of help just doesn't sit right with me. It would bother me deeply to give or receive help with strings attached. I think I have to just think about this for a while and decide if I'm comfortable giving freely. If not then I'll come up with something that I need to redirect the money towards. Under no circumstances would I ever tell him "I disapprove of something you're doing" - because I'm not there, I'm not him, and I have no clue about his reasons. I just don't think that adults have the right to tell each other what to do. If giving him money makes me think that I have that right, then I shouldn't give him money.

Jaine,
I think you are already there... You are already questioning whether you want to give to him under the circumstances...

The 9,000 a year income makes me wonder--Is your brother an adult on his own or is he still living with your parents? I guess I am wondering if his basic needs are being met and this is something beynond that.