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?
I really want to help people with their finances too, but if they really don’t want me to know their entire situation, then I can’t help them. Simple as that.
It’s amazing how many people want to find a magic solution, without any sacrifice on their part…. it just doesn’t work that way. Any change will be difficult, but in the long-term, life will get easier.
So true, there is no magic solution. I’m learning to help out by pointing out the tools and resources rather than give them a turnkey solution.
Sounds like a great way to help others without wasting too much of your time in the process! This allows them to value their decision more too since they have to scrounge up the info on their own.
My wife and I were asked by another couple for help on getting their finances straightened out. So we sat down with them and talked about budgets, cutting back, paying off debt, etc. Over the next several weeks, they regaled us with tales of eating out (at least five times in one week), buying things they didn’t need, and raiding their retirement accounts to help pay off credit cards. We quit.
That can be rough, especially since you took the time to go through the process. I’ve done the budgets and then seen it completely ignored.
Bravo! I love helping people with their budgets (I NEVER give out actual money, though I would if it were a true emergency of course). The problem is, while I can impart some of the “knowledge” behind the budget, I can not give the individual the will-power that is needed to stick to it.
I want to know what inspired the post? What was the straw that broke elle’s back?
Haha, I’ve been hit with back to back requests from loved one to help. I guess pregnancy hormones just made me say ‘enough’. I got bigger things to worry about now. :P
Elle, You keyed in on the fact that if one does not want to do the work and help him/herself, then nothing will change. Success with money and life requires hard work and consistency!
I’d have to say that I’ve been in this situation before, and it’s frustrating. I’ve sat with someone, helped them with a budget, and told them where to cut and what to cut, and then watched them not do it – they just were not ready (and still arent). I have also been on the other end of this situation, and got a bit of help from someone and failed to follow through. I think a lot of people think finances are like some sort of magic, and they just are drinking the wrong potion.
I know someone who give out money to his family without ever asking them 1) why they’re taking on a discretionary expense that they can’t afford and 2) when they plan on paying him back.
So far, he’s given out $3000 to one friend and $1000 to his sister and a whopping $120,000 in interest-free loans to his mom. (He also gave her $6,000 more last year, of which she’s only paid back a small amount, despite having that much in savings.)
What’s worse, he never even ASKS for repayment, even when his lenders are taking trips to Jamaica or buying houses.
He thinks he’s financially responsible, and thinks that everyone turns to him for loans because of that … when in fact he’s as financially clueless as the rest.
Wow; I hope your friend can take a step back and see if he’s really helping the situation. I think it hurts more when its family. If you don’t give you can feel guilty if you do give you can feel used. Tough situation.
People ask help with their finances, but they don’t help themselves. Worst thing, they don’t have a savings account or emergency fund and treat it as their least of their concerns. I pity them.
It is so true. I love to help people, but they really need to help themselves. It is the only way they will solve their problems.
Having a baby really jiggle your priorities doesn’t it? You can’t be a crutch forever and you’ll have a lot of baby expenses coming up. I think you made the right choice! Your friends and family will have to learn to stand on their own financial legs.
It is insane how quickly I changed how I reacted. It made it much easier for me to say no. So far, only one relative has had an attitude. Others may not like it, but with a baby on the way, they don’t push it.
This post reminded me of my friend who helps others file their taxes. He tells me some of them walk in even without their W2s!
You can’t help those who are not motivated enough to help themselves. It takes two to tango.
Enabling. The love hate relationship with wanting to help and crippling the person you are helping. I could use the tip about just not answering the phone because I’m a pushover :)
I was about to comment until I read this. I could not have said it better. Very true!
I’ve actually set up certain numbers to go to voicemail on my cell for awhile. It allowed me to screen calls a bit.
Love these two sentences! “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.”
Do people really do that? Come on Elle… really? That doesn’t seem rational that people would spend $1,000 on electronics and then cry about not having enough food to eat.
Perhaps you’re too nice? They lean on you like a crutch. You are their IMF, their lender of last resort, which may happen more often than you like.
I don’t know. For some reason, I’ve never had a family member ask me for any more. I don’t think in the past 10 years any of my colleagues have asked to borrow money from me either. We just don’t do it.
So, I’m totally inexperienced when it comes to this. I think I would rather just set some guidelines for them to reach, and then give them the money once they reach it. If they’d like to pay me back, great. If not, it’s ok.
Sam
Yep, people sure do Sam. As a financial coach, I work with folks who have made those poor choices of priorities. Sometimes I can help them make better decisions, sometimes not.
Elle, don’t feel bad. when people get free advice, they often value the help based on what they paid for it. Even when they pay for advice, they often lack the follow-through and willingness to work hard for results. Sometimes it’s best to just say no.
It’s a bit longer than that, but I actually had someone complain how tight money was after they made a big purchase. The purchase itself was a smart move for their business (1/3 of regular price), but they were upset that they had to bootstrap for a bit on food.
We had my wife’s younger brother move in with us at the start of his second year in college because he seemed to be drifting aimlessly and we thought we could give him some direction and guidance. He moved in – got a great job at an electronics retailer, a side gig lifeguarding at our local gym (with a free membership to boot), and started attending classes.
Then, for some reason, he decided to start skipping classes, calling in sick, and continue partying endlessly.
He just didn’t seem to get it that he had to change his behavior. He eventually got the boot, gave it all up and moved out of town. He seems to be going through the same cycle of behavior where he’s at now….its like he gets all set up, then self destructs.
Sometimes you can only do so much, right?
Travis – your family was very generous. We’ve also opened our home on occasion. It was hard because we wanted to help and be encouraging, but every time we bought up getting a part time job, they had an excuse. Finally both sides agreed it would be better if they tried another option.
The budgeting part aside, this reminds me of when I was a tutor in a writing center at the community college I used to work for. A student came in asking for help with her resume for a job. I sat down with her and asked to see her draft as usual – and she had nothing. Absolutely nothing. She had some references’ names on a scrap piece of paper, but that’s it.
I just sat there and told her she needed to look at some books about resume writing and decide what kind of resume to make and then I could help her correct it … and she looked at me like I was crazy.
Those of us who work our tails off – from writing papers to making budgets to paying off debt – to achieve our goals, or, in my case, build ourselves back up from making mistakes find the whole “why-don’t-you-just-do-it-for-me” attitude kind of disgusting. Get to work, and get it done – that’s what I say.
I know the feeling, Serenity; I can’t tell you how often I’d be running my office hours as a grad student when someone would come in, ask for help, and not be able to tell me what, in particular, they wanted to look through. Since these visits would always pick up at the end of the school year, I got the feeling they somehow expected me to teach them everything right before the finals, rather than having to learn it themselves. It’s one thing to get stuck on something (I am a chemist, and understand how someone could have trouble in that area, particularly with some of the more difficult disciplines), but to not even have some idea of what they need help on, that just reeks of ‘Do all this for me, so I don’t have to learn it or do anything.’
I hear you – helping people is one thing, but getting someone to care is nearly impossible. I tutored as well and I know how you feel.
I now avoid certain childhood friends just because I know that they hit me up for money. It’s bad enough that when we go out, I’m always footing the bill.
Great rant, and so very, very true!
In my personal life, I very rarely give advice on financial matters! My friends do not seem to need or ask for help. At least one relies on me to plan our overseas trips and does appreciate the effort. My children occasionally ask questions which I am glad to answer. They actually listen!
Elle, I had a similar situation with, of all people, my mom. I tried and tried for hours on end to help create financial plans that would work. I’ve written many a budget with no effort from her side. Your blog title is spot on – just because I want so badly for someone else to live a better life financially isn’t enough. They need to want it as well. Great read!!
I think most of us here have had the experience that you can’t make other people do things if they don’t really want it for themselves. And if they really want it for themselves, then chances are they will do it for themselves and just ask for guidance.
I used to date this guy who told me wanted to go back and finish college–a program in fitness training. Truly, this is what he wanted to do with his life. In fact, he’s a personal trainer today and loving it. But the going back to finish my degree thing? I spent MONTHS of my time researching different programs, figuring out his budget, researching scholarships, etc. I mean–I was super excited about this and knew it would be great for him.
Here’s what happened: he enrolled, got a student loan (even more!), then completely didn’t do the work. Unreal. I was furious. The program was actually online, and he literally just had to read, research, write up something once a week, and take these little quizzes. He just lost all motivation! Even worse, since he dropped out he then owed the student loan back right away and of course he had no money whatsoever. What a terrible thing!
This was a huge lesson for me, and I am glad that I learned it early on (when I was 24).
Lending money to family is such a tough thing, as is trying to help someone budget who doesn’t know how to make sacrifices. I’ve been helping my mom budget and am glad that she is finally starting to let go off frivolous spending. I was tearing my hair out for the longest time trying to get her to realize clothes shopping is not a necessity and she’s finally doing better now.
Our priorities are definitely out of whack and in addition to that my generation seems to have an overwhelming sense of entitlement.
You’re exactly right when you say that you cannot help those who are not wiling to help themselves.
We all try to help out where we can, but inevitable it comes to a point where we have to use the “tough love” strategy. It isn’t pleasant, just a fact of life. Great article – solid points and good advice!
Lisa @ Wallet Watcher
Great post! I’ve been in a similar situation and helped out a friend a few times and then realized that his/her behavior wasn’t changing so it was a sinking ship. Kind of like the old saying, “You can give a person a fish to feed him for a day or you can teach a person how to fish and feed them for a lifetime;” in this case, if the person doesn’t want to learn how to fish or make any changes to the situation, then sad to say, it’s a lost cause. People only change when they are ready or something happens that forces them to change.
Great post. I have refused to help out if a friend is irresponsible with their money. There’s something called wisdom!
As a credit counselor, I’ll tell people to make an expense worksheet before constructing a budget. It’s important to see where their money is going every month before trying to create a budget for them. Most of them will be shocked at what they spend on every month!
I love the title. I don’t use budgets in my own personal finances because the biggest expenses are those that come from pulling the trigger on rare occasion — a home, a car. However, a budget would have been valuable when I was a student who didn’t know much about money and finances. I probably did spend too much money on what I considered essentials at the time. ;)
I usually give the same talk. Start working towards lowering your debt along with saving for an emergency fund. And the usual contribute to your 401k etc..
I’m trying to start a budgeting assistance business and I’m running into a lot of problems. Either people don’t have money, time or both. This blog isn’t very encouraging but I feel that need to help people are there. There are so many people who spend money and don’t know where it all goes. I’d like to stop that.
I occasionally am asked to help people with a budget too. Like you I know most of the time they won’t stick to it – an hour or so working out a plan isn’t going to undo years of bad habits. However, the experience is always meaningful and the education passed along hopefully sinks in somewhat :)
Just browsing through some of the older posts. It is very true…It is also partly ashamed of why I started to blog so that my wife and I could reveal our financial situation and do something about it.