When to say no when family asks for money

On occasion, I’ll be revisiting and updating past columns with the most universal financial advice. I love hearing from readers, even if I can’t reply to everyone personally. Skip to end of carousel Get Michelle’s advice free in your inbox Washington Post illustration; Michelle Singletary; iStock (Washington Post illustration; Michelle Singletary; iStock) You can’t borrow your way to wealth. Learn how to save, spend mindfully and talk about money with your family and friends. End of carousel Though I’m often asked about what to do when there are significant dips in the Dow or S&P 500, people are also looking for guidance on other money concerns, like how to deal with financially irresponsible relatives. Seniors tend to be concerned about tapping their retirement funds, while couples may be seeking advice on how to merge their financial lives. Money matters in a family aren’t just complicated; they can be painfully expensive, as this reader noted: “How do you say no to the family when they constantly ask for help? My sister is a single parent with three children, and my other sister is having trouble with her children and is asking for financial assistance. I am the oldest of nine kids and am tired of giving out money.” Advertisement When you have managed your money well, you often are the go-to person for friends and family members. If you are frequently Plan B for financially reckless family members, they often don’t pursue a Plan A. No, I’m not going to give you money — I don’t do loans — if your last vacation made it so you now can’t pay your rent or car payment. When a relative was laid off during the Great Recession, my husband and I paid her auto loan until she could find another job. Advertisement Here’s another tip: If we assist with an expense, we pay the company directly. If a family member asks me for money and I’m pretty sure it’s because of poor money management, one of the first things I do is assess whether the request stems from an irresponsible decision or the family member doesn’t budget well. I ask for their most recent bank statements and/or a budget, if they have one, and together we go through the numbers. If there isn’t enough income to cover their expenses, we talk about where they might find cuts, ways to increase their earnings, or both. If you don’t want to get involved in their finances, give them the name of a nonprofit consumer-counseling agency. Sometimes, as hard as it may be, you have to get out of the way and let a family member fall. Sticking with the family and finances theme, here’s another past question: “Even if there’s not a legal requirement to pay off a deceased relative’s debt, isn’t there still a moral obligation?” If this were true, wouldn’t relatives also be obligated to pay the debts of living family members? Unless you co-signed for the debt, you have no moral obligation to pay off a deceased relative’s bills. It’s the legal obligation of their estate to take on those liabilities, assuming there is any money available. Advertisement One reader who hates debt asked: “We need to update and upgrade our home significantly, about $100,000 worth. We have significant retirement funds, and we are old enough to take that money out (we are in our 60s). Where would be the reasonable middle ground between our positions?” First, be sure that you want to stay in the home for years to come and that you really need to do $100,000 worth of work. Get multiple bids to see if you can cut costs or eliminate some upgrades, concentrating on needed repairs. Advertisement I’ll wrap up with a question from a couple starting out their financial life together: “My husband of two years and I are ready to finally merge our accounts. Use your husband’s credit union account to stash your emergency fund money (three to six months’ worth of living expenses). Keep your community checking account and make it what I’ve dubbed a “life happens” account. – This Summarize was created by Neural News AI (V1). Source: https://www.washingtonpost.com/business/2024/08/16/singletary-family-money-loan-debt-issues/