I thought I’d share some situations involving loved ones and money where I just finally gave up. Maybe you can relate to some of these stories; you may have some of your own.
The main takeaway is that success in personal finance is due to work. Not necessarily hard financial work with calculators and miles of spreadsheets, but actually having a plan and executing it yourself.
“Can You Help Me With A Budget?”
I like helping people. I like spreadsheets (yes- I really do), so when people asked me to help them out by creating a budget, I was excited. I took time to create something that would work for them, not just a standard template.
My new policy now with budgets? I just don’t do it anymore. I’ll send you a template or a link to Dave Ramsey’s Gazelle Lite tool. It’s not worth the hassle and most of the time (9/10) it’s just pointless as I noticed the same people keep coming back.
Reasons Why The Budget Doesn’t Work
- You only gave me partial information. So you want me to help, but you don’t want me to know your business. Alright, fine, I can give you general guidelines to help you out. Wait, you do want me to give you a concrete step by step plan, but you don’t want to list all of your actual expenses.
- The budget quickly becomes scrap paper. I went over all the numbers you gave me and I tried really hard to make it doable for your specific situation. Unfortunately instead of telling me where you think it could be tweaked (so we can discuss options) you thank me and then don’t follow through.
- I didn’t know that movies are an essential expense. I understand that we all need some kind of R&R, but if you’re on as tight of a budget as you’ve mention, then going out every week to movies and restaurants probably should be at necessary expense. At least tell me you set aside money for emergencies, wait, you didn’t. Cause you’re tight on money…..
My favorite part is when they call and they have a huge bill due to a completely unforeseen emergency and they need help. I ask them how much they have in savings, seeing as I included that in the budget. Even if they only saved a fraction of what was planned I would be happy, but no.
Inevitably ‘something came up’ and cough..cough…there’s no money in the budget to be saved.
It’s Not Really An Emergency
Admit it – even though you feel bad and want to help out of a sense of family, in your heart you know it’s not an emergency. That relative always calls when they have ‘no other options’ which seems to be the same time every month or so. Cell phones being cut off isn’t a big deal.
Not having cable TV isn’t life threatening. Eating crackers for a week until payday comes isn’t bad considering you just bought like a $1,000 worth of electronics. Crying about it is embarrassing. Sell your PS3 and get some groceries. Better yet, please re-prioritize.
Asking the Hard Questions
I stopped bailing people out this year. Amazing how preparing for a kid of your own makes you realize that you have to take care of your family first with the baby expenses, not get involved with someone else’s money problems.
My suggestion is screening calls with friends who constantly have money emergencies. If it’s a real emergency they’ll leave a voice-mail and you can listen to it. Don’t pick up the phone and get guilt tripped or manipulated. Decide for yourself on your own terms if you want to help.
If you want to help, but you still are unsure if it’s a genuine emergency, you should have the right to know that your help won’t be squandered. Here are 3 questions I’d ask before giving money to family or friends.
- How exactly did you get into this mess?
- Where do you keep your savings?
- What’s the plan to pay me back?
It may be uncomfortable asking these questions, but it really is important to know these things before loaning money. You have to decide for yourself if you’re really helping them or just enabling.
Thoughts on Helping Others
There have been very real emergencies that loved ones experienced and we have helped out as quickly and as best we can. We completely understand that bad things can happen to good people and want to make it easier on them.
However, the above mentioned situations for the most part were preventable. I know this because I’ve made similar mistakes as well. I’ve done some pretty stupid things and I’m GLAD that someone didn’t bail me out. Instead they encouraged me to get my financial act together. (Gotta love grandparents!) Personal responsibility is a part of personal finance.
Have you ever been in situations where you realized you’re not really helping someone? What would you do in the above situations?