This is a guest post from my friend Kraig at Young Cheap Living. This is an awesome post and I know he’d appreciate your feedback. You should also check out his blog, where he shares great information for 20-somethings looking for ways to get ahead financially.
Lately, I’ve been pinching myself to make sure my financial situation is actually happening to me. See, I’ve been working very hard on my finances for almost 4 years now, after learning some major money lessons when I (foolishly) borrowed a lot of money. That hard work has paid off, as I now have a handle on my spending, live on a budget, and have gotten out of debt.
I have close friends and family members who are struggling though right now, though – big time. They have no idea how much different my situation is from theirs since I started paying attention and making good financial decisions. I don’t normally discuss finances with them unless they start the conversation; I’m scared of how I would handle it and what it would do to my relationships with them. It’s kind of a bummer that I haven’t been able to talk to them about money, and I want to figure out how to do it better. Here’s more on their situations:
My Close Family Member Who’s Struggling
I have a close family member (let’s call her Kristy) who has a college degree and is incredibly smart and talented, but has been in a career slump ever since she graduated college a few years ago. She was a victim of the recent economic downturn, which caused graduates to lose hope of entering the workforce with momentum. She earns a full time income but it’s barely enough to survive on.
Recently, I saw two of her bills. Both were several hundred dollars, and both were past due. One of these bills was just flat out careless and could have been prevented (it was an overage on her cell phone plan). I’m aware that she has also racked up close to $1,000 in credit card debt in the past year.
Here’s my frustration. I don’t think Kristy wants my advice on any of this. I’m very aware that she is drowning in her bills and can’t pay them. At the same time, I’m aware that she does make enough money to live on. It’s very hard to watch.
My Close Friend Who’s Struggling
Next is my close friend – we’ll call him Brian. He lost his job a few months ago, just after moving in with his girlfriend. Because of his prior lifestyle (spending everything he made), he instantly had no money because he had no savings at all. He is now living off of his girlfriend.
Brian told me the other day that all of his tax refund will be going to pay his girlfriend’s credit card bill, because he has convinced her to charge everything of his for the past few months (he either doesn’t have credit cards or they’re maxed out). Apparently, she has charged over $2,000 in the past couple months for him.
After he told me that, he said this: “It cost $700 alone to go home to my parents’ house for Christmas.” Note from me: One tank of gas would have gotten them there and back. They also stayed at his parents’ house and ate their food. After her said that, I stepped in and said, “Going there does NOT cost $700.” Then he mentioned it was gifts for his family that cost so much.
So basically, my friend, who has thousands of dollars racked up on his girlfriends credit card, who is flat broke and has very little income coming in (from a part time source), is spending $700 on Christmas presents. That’s VERY frustrating for me to hear and not be able to comment further.
My Thoughts on Helping Them
Obviously, I care about these two people, but don’t know how to help. Here are some options that I’ve thought of and my personal opinion on each:
1. Give them money. I don’t ponder this for my friend often, but I do with my family member. I could write a check and pay those two past due bills; honestly, I wouldn’t even notice the money was missing. It would be easy for me and obviously for her, but in the long run, I believe it would hurt her. I feel like she needs to figure this out on her own. My friend obviously has his girlfriend there to give (or lend) him money. Thankfully, he hasn’t asked me to help him out financially. I do, however, need to be prepared for the possibility that he might someday. I’ve thought that through, and my answer would/will be no. I’m not sure on my answer for my family member, though.
2. Get in their business about it. I could very well stick my nose into both of their finances and give them my two cents. I could tell them both how they’re overspending and living foolishly without the money to do it. Both of them are living a more expensive lifestyle than I am, and both are spending more than me, therefore I know they are spending unnecessarily. If I tell them what I think, I could damage my relationship with them, though, so I haven’t done it at all up until this point.
3. Wait until they ask my opinion. This is what I’ve been doing. Their financial hardships have been going on for awhile, long before their immediate situations happened. They haven’t asked for my advice – yet. Part of this may be that they have no idea how well I’m doing financially, or that I have any ideas for helping them out of this mess (which I do). I haven’t shared any of this with them for fear it would come off as bragging. All I really want to do is tell them how much tightening my belt, budgeting, and getting out of debt has CHANGED MY LIFE for the better!
Therefore, I turn to you, readers. How can I help my family member and friend? I really care about them and want to help them, but have not figured out how to yet. Have you ever been in a similar situation? If so, how did you help that person?