Know Money No Problem: A Guide to Positive Personal Economics by Lee Ronnie F

Author:Lee , Ronnie F. [Lee , Ronnie F.]
Language: eng
Format: epub
Published: 2020-06-23T16:00:00+00:00

Chapter 9

Teach How to Fish If You Have to Feed Those Close to You

The cycle of financial dependence is a vicious one. It all starts very innocently, out of goodwill, and a sincere intention to help someone, more often a family member, out. It can be your child, a sibling, your very own parents, or even a distant relative seeking out your financial help. You generously extend a helping hand.

During times of shortage of cash or a restrictive budget, it is but natural that you turn towards your family members and loved ones to help you out. Nobody knows what the future holds for them. A financially debilitating situation can bring you to the brink of bankruptcy. Bills go unpaid, debt tends to pile up, and the effects trickle down to family members who voluntarily take up the responsibility of helping their loved ones. In the process of trying to improve someone's financial condition, you unconsciously commit to an obligation. Seeing your family members struggle with their finances can be very heartbreaking. As much as you want to help them to the best of your abilities, there are always specific time and financial constraints that will limit your capacity to do so.

Your funds and timelines also matter. You cannot take ardent steps in the heat of the moment and face the repercussions later on in life. The 'Society of Actuaries' recently conducted a survey which revealed that Americans consider it their duty to help their family members in need of financial assistance. Furthermore, a survey conducted by “Family Obligations Across Generations'” shows that two in five Americans have extended financial support to a family member in the past year. [41] Wanting to help your loved ones is only natural and is a sign that you care for them. However, from a financial perspective, you would want to review your plans. The rising cost of living, insanely high educational expenses, and staggering student debt have put all of us in a difficult financial position.

Hence, turning to family becomes critical. Not only do parents support their children, but even the millennial generation doesn't step back from assuming the responsibility of their aging parents. Nonetheless, jeopardizing your finances in the process is not the solution. According to a study, one in five Millennials is supporting their aging parents, which amounts to almost $18,250 annually. [42] If you feel you are stuck in a tight spot when it comes to providing financial assistance to your loved ones, here is what you need to do:

Assess your financial position first. Reflect on your savings and consider whether you are in a sound space to loan out or lend money. Is the problem at hand temporary or pervasive? Does the dependent have a future contingency plan to cover up the loopholes?

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