Did you know that 34% of Americans have no savings whatsoever? And 69% of households have less than $1,000 in emergency savings?
These alarming statistics point to the worrying state of people’s finances. A remarkable number of people find themselves in financial trouble.
It’s hard to watch someone close to us suffer financial hardship. We want to help, but it can be challenging to know-how.
Continue reading to learn five great ways to offer a helping hand.
1. Help Them Create a Realistic Budget
Many people with money problems aren’t good at budgeting and often don’t know where their money is going. If they are not good at handling their finances, sit down with them and help create a budget.
You can examine their finances together to understand where they can reduce expenses. Perhaps, you can also help them formulate a plan to increase their income.
2. Lend Money With Caution
Proceed with caution if you decide to lend money. A loan can complicate your relationship, so take the time to assess their financial request. Ask them what the money is for and, if you want to help them out, be prepared never to see that money again.
The conversations may be awkward, but communication is vital. It’s a good idea to write out the loan terms and have everyone sign.
Think deeply about lending money to a loved one because it can lead to resentment and guilt down the road.
3. Help Them Find Local Resources
There are plenty of ways you can be of service without digging into your pockets. For example, local resources such as career help centers and welfare agencies assist people during difficult times.
They may not know where to look, and you can help them by researching for them. These agencies can steer them in the right direction without putting a financial strain on your relationship.
4. Helping Family With a Cash Gift
A loan can complicate things, but a no-strings-attached cash gift has won’t. Work out how much you can afford to give and consider the benefits of giving anonymously. It can make things considerably less awkward, and a relationship won’t work if one person feels indebted to the other.
It doesn’t need to be anonymous, but let go of any expectations of gratitude. A one-off cash gift can strengthen your relationship, showing them that you care and you’re there for them.
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5. Offer Emotional Support
Money trouble is often linked with depression and anxiety. Giving them the space to speak to you about their struggles can be an enormous weight off their shoulders.
Try not to judge or criticize them, and open up to them about any financial problems you have been through. Don’t underestimate the power of being emotionally supportive.
Be There for Them in Time of Financial Trouble
There are many ways you can help a loved one deal with money problems, and it doesn’t have to involve giving them money.
If they’re in financial trouble, do your best to be there for them. Neither judge nor expect gratitude from the person you’re helping, and proceed with caution if you decide to loan them money.
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