Happy Sunday fellow dukes!
I have a topic that’s been on my mind all weekend and felt it would be worth sharing with the community. This is one of those freely written, not so much of a point, but more of putting down thoughts on a topic type of article. We want to get your mind churning and hear your thoughts in the comments below!
A Quick Snippet from ET The Hip Hop Preacher
Eric Thomas has been mentioned a few times on Duke of Dollars, and today I wanted to share a quick podcast snippet from the Secret To Success Podcast, episode 7, your willset.
To listen to the snippet, the starting time is 29 minutes, 40 seconds and ends at 32 minutes, 35 seconds.
Notable quotes:
“Why are you calling other people to make your dreams a reality”
“Why are you expecting someone to buy you something, or do something for you when they are the ones grinding!”
Sacrifices
For many of the bloggers or readers in the personal finance community, it may seem like a normality to SACRIFICE part of your life to achieve financial independence or a debt-free lifestyle. We spend hours reading blogs, more hours writing blogs…and most of us have a full-time job! This doesn’t even convey the fact that we are side hustling at the same time or researching how to be a better blogger or managing our careers.
“I don’t know how to use Mint or I don’t feel like tracking my money or I don’t know what to do with my paychecks” are just not excuses to me anymore. Situationally, you may not be able to save much of your income or max out retirement accounts; that is totally OK. But my goodness, at least do your best to get there. We live in a capitalistic society where people have rags to riches stories. You have to start somewhere!
“I don’t have time to handle my money” – but you have time for social media, Netflix, and nights at the bar.
There are just too many resources and free places to access the internet in the US for an excuse of ignorance as the sole reason you have money challenges. Google returns search results in less than 1 second with the best articles on topics within the personal finance realm. Podcasts have episodes to explain in detail mindsets and strategies with money.
“The world of personal finance is confusing and it is really hard to understand it” – Life is hard! Personal finance doesn’t even come close to complexity as topics like organic chemistry, electrical engineering, or architecting bridges. We have the Rockstar Forums, many personal finance blogs in the community, and wonderful people who are here to help!
Why am I talking about sacrifices on a random Sunday in April?
Because a theory I conjure up after recognizing the following:
Those who actually take the time to read on money moves, make sacrifices for their future, place an importance on experiences over materials as they pad their bank accounts with emergency funds, and max out their retirement accounts are the same ones who are looked at in families to pay for those who do not make the same sacrifices.
This leads me to ask myself, are we obligated to do so?
Family & Money
This is what makes personal finance so interesting and by using thought experiments we can prepare for situations in the future before they happen.
Thought Experiment #1: Your Uncle has an alcohol problem and needs rehab, do you help pay for the treatment with no strings attached?
Thought Experiment #2: Your grandparents’ health is declining and your the only one of your siblings who can fit the bill as they head to a nursing home – do you help?
Thought Experiment #3: Your nephew or younger sibling has gotten into trouble and needs help paying lawyer fees – what do you do?
Thought Experiment #4: Your parents don’t have retirement accounts and you recognize they are getting older – do you work with them to start preparing now?
As you can probably tell, many of these questions really have an “it depends” type of answer. I would totally agree with you and your feelings towards money, your sacrifices, and role within the family really matters. It feels like to me the social pressures within our culture lean more towards helping your family, in fact, a friend recently even stated it to me: “They are your blood, and you have their back no matter what.”
Which is true.
It just makes me wonder, would they have yours?
That’s why I find the thought experiments helpful. The reality is that many in our world are better sayers than doers. The mindset of “we would always help each other” might be what we all believe in, but using credit cards to get into debt (and now needing help) are actions that show your real beliefs.
For example, if someone is driving a new Mercedes or other fancy car and has children, but doesn’t have a college fund for them….well their actions and balance sheet might just lead us to infer what is really important to them. Should you then help that child get through college when they need it?
Priorities
We’ve mentioned in the past to find the”Why” for your motivation to make the sacrifices to build a financial kingdom. Making decisions based on priorities while keeping your own goals in mind becomes challenging as you can see with the thought experiments above.
A very common statement can be repeated as “You are your number 1 priority.” Does that mean it is moral to say no when you have money to help but are putting your own goals first? Should you help people with their challenges if it means putting your life goals on hold?
There isn’t a right or wrong answer, only a decision you must make for your own life.
Our Question to you:
Eric Thomas expresses that he is the one making sacrifices in his life and because of these sacrifices, he has gotten to the point that he can help but doesn’t feel that one should if that person isn’t even coming close to making the same effort. He’s speaking outside of the family (or at least my perception thinks so) for people who want help becoming successful in the motivational speaker game.
For personal finance, we can relate this back to the thought experiments above or real-life situations that require you to make a choice – we are interested in what you think.
If you are in a position of financial stability or strong personal finances, due to the sacrifices and effort you made to get to that point, are you obligated to use that money to help your family and friends freely when they may have made bad decisions or forgone sacrifices to need that help?
SN – we are not talking about people who have had life tragedies and are doing their best to get back on their feet. We are strictly speaking for those who have been lazy or haven’t cared that need help. For example, someone you’re close to who quit their job because they didn’t like it, but did so without an emergency fund and is asking for money so they don’t get evicted.
Interesting questions. I think there is a big difference between helping and enabling. When someone is looking for financial help, it is usually to get out of some sort of crisis. But saving them from that crisis might not be the best way to “help”.
That’s true! I love the word enabling in this situation.
I read an article where the person helped someone remove Credit Card debt by loaning a personal loan with 2-3% interest, which then benefitted both parties.
The friend that had CC debt was able to pay it off via the loan, and instead of 20+% interest, they now paid three. Some may see this as extra but if you really have a personal finance as a business mindset, then nothing is free!
Exactly! Well stated. Personal finance needs to be treated like it’s a business, a private business.
Indeed!!
I say “No, but He’ll No!”
My most popular blog posting do Date was “The Art to Saying No”
https://firechecklist.net/2018/03/17/the-art-to-saying-no/
Hell no! Right on! You don’t owe anyone anything. I refuse to give money to friends and family.
Amen Hank!
It’s a hard question. But I lean towards the side of not giving them money, since I think it tends to enable bad behavior. It seems like there’s people like this in most families, and I’ve rarely heard of someone taking the money, using it to mend their ways, and paying you back.
Indeed! I feel it really depends on the full situation and what they are asking for.
If someone was laid off, truly trying to find another job without luck, and needs a bit of help with a health issue, then it isn’t such a hard decision.
If someone has been fired for missing work a few times, drinks 24/7, and needs money for their habits, then yes, you can say no to them, but it would be hard to see them on the streets!
There just isn’t an easy answer eh? Thanks for stopping by and getting my mind moving this morning.
I am a softie and I like to help people out. But, I have found out it almost always makes the relationship weird. If Mr. ThreeYear and I help with something, we do it no strings attached. Even so, it can make things weird. That being said, my parents have helped us out a lot over the years, so if they ever needed anything, we’d definitely help them. We also plan to help our kids in strategic ways (like putting $$ in their IRAs when they’re young), because that’s how my parents asked us to pay their help forward.
I agree. Even if it was paying for the meal, somehow it makes the relationship wired. But I do have a friend who really needs money that time ,and giving her a thousand changes our friendship for the better.
I love that you’re willing to help out and that is what makes the personal touch of the questions so interesting.
Your situation determines a lot of how much you can help, and also what you expect in return, plus it always feels great to be able to help a friend in need 🙂
I like to help too, depending on who and what the help is. There was a time where money could have gotten in the way of one of my best friendships, and thankfully I was able to let it go as the relationship was more important.
Helping parents is a great one, especially since some parents sacrificed to make sure we had the necessities in life. So glad to hear you are helping your children, so awesome to change your family tree for the better!!
My wife and I have a policy. We do not lend money. We have a few exceptions. The first exception is that we would help our parents if they needed money. The only time that I ever lent money was to my best friend when he was getting divorced. I trusted him and he paid me back. A few years ago a distant relative asked me to borrow $1,500. My response was no. He made a mess of his finances and I am not responsible for fixing his problems.
Sounds like you have a very great person in your life, because I am in agreement that sometimes life really hits and help is needed.
It sounds like the person you chose to give money versus the person you didn’t helped make the decision easy for you !
I’ve helped my parents pay off almost $30,000 of debt in the last year and don’t regret it once. The amazing thing about my family is that everyone has each others back and contributes how they can. Growing up my parents could not afford a computer for me for school so my aunt bought it for me. Another Aunt always bought my school supplies to help. When she broke her hip at age 75, my parents offered to have her move in to their house and take care of her until she got better. They can’t contribute financially but will do anything for the family with their time. Now I am older and I am in a position to help financially I do. Besides my parents, I have started to help the younger generation too. My contribution of money is not better than other people’s contribution of time though. Maybe I’m giving money but my cousin is providing quality time and that is just as important. We all play our role in the family. I know my family will be there for me if I need them. This article makes me sad because it’s amazing to have such an awesome family that you can give freely to and will know will always have your back. I’m sorry you havent experienced it!
Hey Millennial Boss – thank you so much for this wonderful comment that got my mind churning on a Friday.
I’m delighted to hear about your family, and huge shout out to your aunts to help you grow into the person you are today. It sounds like their small gifts helped you really become a solid person, and it was awesome to hear this.
How do you balance between helping your family versus your own goals? If you don’t mind sharing.
I wanted to apologize because this article may have made it seem that my family doesn’t operate in the same fashion. It really all depends on the people involved, because unfortunately it isn’t so cut and dry for us. Overall, our family (immediate and more distant) do help each other. My parents provided for me throughout my whole life, made so many sacrifices, and bought some things for me (like Xbox or games) that I sometimes have trouble buying for myself.
Long story short, it was because of them I was able to play athletics, enjoy movies and buffalo wild wings with my friends, and always had basketball shoes each new season. Financial troubles did indeed hit during my college years, and it wasn’t that they refused to help or that I would refuse to help them (again depending on the situation), but I made it a priority for myself not to need help and to be a man as I grew into one.
Thankfully they gave me the tools to do that, and this post more directly relates to when and how to best help your family. Enabling someone who is poor with finances by giving them free money without stipulations (like you need to budget for 3 months) or pay this back at a no interest, low cost per month, doesn’t mean you aren’t helping them, only that you are showing them you work hard for your money and it isn’t for free. Is that the right approach for some situations? Depends on the person who needs help. I definitely am with you that having your families (including my friends in this) back and them having yours is why life is worth living. My favorite part of it all is the opportunity to help, but for me it just hasn’t been as simple to always do it with no strings attached unless I truly am willing to part with that mula.
Actually, pretty random but I have been looking into long term healthcare for a member of my family (2K+) a year to make sure that it can reduce my risk of having to pay it, but help them to afford it later. I’ve researched 529s for my nieces and nephews, helped people budget, and even pointed them to the site.
My priorities are myself, my future family, and of course my family – in that order. I’m so looking forward to removing debt for my life so the opportunity to help like you do is a much easier decision, and am so so so inspired by you for doing so!
(We decided to be absolutely honest in our manifesto, so I want to make sure I am doing so with you!)
Interesting situations. Ironically, I’m a lender for rehabbing property, so, everybody knows I lend. As y’all pointed out, as a business. It is a financial transaction.
My brother at 59 years old,was purchasi g a new house. He was selling a long held rental with great cash flow in a decent area to…. raise money for the down payment. I thought about tossing 20 or 30 grand at him to help so he could keep the rental. Then, pause, our mother mentions that brother is heading on rather expensive cruise in a few months.
He did not ask, I have to think, that if he did, the response would be similar to the article…Get your house in order and you’ll be fine. I’m not enabling more irresponsible behaviour.
The feeling that happens when you lend money to someone who needs help, only to find out they don’t actually need it, but because of their decisions seem to, is a hard one to swallow.
It sounds like you made a great decision here! Would love to hear more about your job, what does a lender for rehabbing property mean exactly? Let me know if you’d be interested in guest posting! [email protected].
I ask myself a few questions anytime money lending:
1. Was this situation self caused or was it truly unfortunate circumstances?
2. If I don’t receive the lent money, will it cause me to feel anger towards the person asking?
3. Can I find a way to empower through lending money to help them become better in the future, and possibly avoid it?
4. Are they doing everything they can to rectify their own challenges?
I don’t have a ranking system or anything like that, but my feelings towards the situation after asking these questions help me make final decisions. Overall this hasn’t happened much for me, especially with my debt payments each month, but could more in the future!
These are tough questions, because most people seem to equate family/friends requests for help as a negative thing, i.e. the enabling comment above.
However, sometimes it’s not so simple. I recently gave my dad about $300 to get some much needed dental work done. He’s been disabled and on fixed-income and government sponsored health programs for quite some time, so he really did need the help as he doesn’t have any “extra money” to use toward that end.
Now, if this were around a different period in my life, before he became disabled, and when he was squandering money by going out drinking after work every night, then no, I wouldn’t have given him anything.
It really all comes down to the circumstances surrounding the ask, and the person asking, as well.
You are very kind for doing that for him! We feel the same way with the circumstance dictating the decision.
I see in other comments people have pretty strict policies against it, and with a family to provide for, it is understandable that they do!
Thanks for sharing!!
You nailed it the answer is “it depends” I once had a relative ask for $20 for her medication that month, she couldn’t afford it. I reached into my pocket to pull it out jus as the doorbell rang. It was Schwan’s. She proceeded to purchase $50 in expensive ice cream. I pushed the $20 down back into my pocket.
This is a perfect example, thank you so much for sharing. I hope you bought yourself some ice cream with the $20 saved 🙂
Great ideas to think about. I think it’s definitely situational. We should help our family and close friends whenever we can, but that doesn’t always mean giving them money. Sometimes paying bills or paying off debts can be enabling of bad habits, but sometimes emergencies pop up and we should help when we can. There are other ways to support loved ones that don’t involve giving money and can be more helpful in the long run.
That’s a imperative point – what is best for them in the long term? I’ll have to add this to my list of questions to ask myself in these situations. Thank you for sharing!
A thought, because it seems that a lot of people around me prefer to give to cold charity than say, someone they know, their relatives who’re not doing well. I wonder if they don’t help people who are close to them, where do they go when they need help?
That’s a great question. I didn’t look up any stats for you – being familiar with personal finance articles – I would say many turn to credit cards and debt. This can really compound the fundamental issues of either not spending less than you earn or not earning enough to cover life expenses.
This could also be the cause of homelessness in the different areas of the world. I’ve definitely heard of stories from people who have a child addicted to a drug, spent money trying to help them, and it didn’t help. When their money dried up, what could they do? It was almost like the return on investment wasn’t there (in terms of running your finances like a corp) to them after trying so hard.
Obviously this has a huge effect on their life and not something we would want to happen to anyone, alas it does :(.
I had a friend changing careers, so finances were tight. I had admission coupons for the event we were going to, buy 1 get 1 person in free! I told her if she got herself there (gas $), she could be my free person, and I’d treat for food, since her birthday was close. We had a great time and she is so much happier in this job.
Then there are people who tell me ‘oh I really want to go but don’t have money for gas to get there’. I plan far in advance, if you really want to go, you save up for it.
I think the line between helping and enabling can depend on the recipient. Some people will consider it a loan, and pay you back, others will consider it a gift, and keep asking for more.
My boyfriend at the time and I were going on vacation and I asked to borrow $1000 from my mom to have, just incase the car broke down and I needed long distance tow or repairs and the place wouldn’t take a credit card. (It was rural and some local repair places want cash in hand not a credit card from someone out of state.) Everything went fine, repaid her the money. My then boyfriend (now ex), decided he needed a new suit for an interview for a job that would require wearing a suit, so while we were in the store, maybe he should get a 2nd one. And dress shirts, and ties because they all match. I had good credit and could open a store card and get the discount, clearly stated ‘this is a loan’, ‘yes I’ll pay you back’. Other instances too, and he was shocked when he came into funds and I handed him an itemized bill of his ‘yes I’ll pay you back’ moments. The final total was close to $7000. It was a wake up call for me, because he would have happily ignored his ‘debt’ indefinitely.
I’ve gotten on board with knowing I won’t see the money again from certain people, and others for whom it really is just a bridge until they have cash in hand.
I’m so sorry to hear that he did that!
Our favorite word for this type of event is perception. Our perception of money is vastly different than others, all based on our experiences, our environment growing up, our relationship with money, and how well off our family is. People have such different attitude towards it that is truly baffles the mind!
My grandmother always asks me when I tell her things that happen to me: “Did you learn anything”…and it sounds like you did. Good job!!
It’s always a hard call – are we actually helping or hurting? I did lend my brother money once, but he didn’t ask for it – I stopped him before he was about to go to a pay day lender. He did pay me back. I also bought his suit for my wedding. He probably could make better money decisions, and probably could’ve paid for the suit by tweaking his non-existent budget, but I didn’t want him to stress over it.
You are a great brother! Good for you and both of us dukes are in favor of helping out people with no strings attached sometimes as well! Thank you for sharing!!
I was always raised to view helping people out financially as a gift, not a loan.
This doesn’t mean I don’t PLAN to be paid back; rather, it’s that I need to factor “maybe I’ll never see that money again” in as a possibility from the get-go, regardless of how much they SAY they’re going to repay me. If I’m trying to decide if I should provide money to somebody else — regardless of if they’re friends or family — it’s a good way to judge if I should or not. If I wouldn’t provide somebody with the same financial help as a gift, I’d hesitate to provide it as a loan. It’s such an easy way to sow resentment into your relationships; you can’t expect people to get “better” just because they told you they would. You have to give without expecting to get back.
If it’s a situation where I’m okay with that, and it balances out, then I will give what financial help I can.
If the calculation doesn’t match up, though, or it’s a situation where money won’t actually solve the underlying problem, I generally try to find ways to support friends/family without just throwing cash at them. I’ve offered my services with child/pet care during an aunt’s medical treatments, provided my spare bedroom when a friend’s relationship suddenly fell through and they needed a couple weeks to find a new living situation, built budgets for friends who were perpetually struggling to make good money choices and then getting caught between paydays, aided in job searches by editing resumes and scanning job postings, etc. By providing specific and concrete offers of help and then following through, I can try to make people’s troubled times a little easier to bear without taking personal responsibility for their situation onto myself (AND, in an ideal situation, I can stop them from having to pay somebody else to provide a service they need).
“I can’t help you financially right now, but I’d be more than happy to do THING X, Y, or Z to help you get through this. Let’s figure that out, instead.”
That’s wonderful you are able to work with your friends and give them so many different types of help. Definitely what good friends are for! I agree that someone saying they will change or fix something doesn’t guarantee they will! If you consistently give someone with bad money habits free money, do you feel that they will ever change without having to? It makes me think a bit about how you can help them change through incentives of changing with help. “I’ll gladly help if you sign up for mint and try it for a week” type of thing.
I feel that it depends on your relationship whether or not a loan option makes sense – definitely feel like close friends and family can be prioritized over that. Taking on a loan with someone who is in debt is really helping them out while they help you though.
For example, 1K loan with you for 2% APR versus 1K loan @ 20% APR can be the difference between them needing 1020 or 1200 to pay off that debt. Not only have you helped them by making it easier, your trusting them to pay you back. That’s where the friendship part can be rough if they don’t, so lean towards what you were saying with the don’t expect it back. My feeling towards that depends on how much money you loan them 🙂
Thanks for sharing!
I’ve lent some money to a friend of mine recently. They didn’t have any money to get through the week and asked me a ridiculous amount of money and we both knew that. Anyhow they spent most of the money in 2 days, had to make due with whatever was left, and that was a lot less than what i initially gave.
I knew how she was like and i had the luxury to forget that money for that moment but i still confronted her about why she spent it such a way. And that it was wrong of her to treat what i’ve earn in such a way.
And that is probably how i’ll always be like.
I’ll give the money if i have the luxury to never get it back, but i’ll confront them so that they understand that money comes with ties. Friends asking for money always changes the condition of the relationship. It either takes it to a level where trust is truly earned or shatters that trust and both sides know it. And even if that knowledge is one sided it still makes decision making easier going further.
And with family, i’ll be more strict with my confrontation. Because both times i have the right to do (i believe so) that but damage in a family tie is different with friends. And i would probably watch closely what they’re doing so that i can see how they’re treating the situation.
Friends can be ditched. Family can’t. Things always come back around. And whether they deserve what you’re giving sometimes isn’t the point.
I asked for the money i lended to my friends, i’ll get it back in a few days apparently and im sure it’ll be a little delayed than that, but i know i’ll get it. But i also know that if i didn’t ask they wouldn’t mention it.
Even if it’s out of your hand it is still your money. You have to remember that. Yes, i’ve also said that i forget the money that i’ve given but not in the sense that i’ll never get it back and won’t ask for it because it is out of my hands but in the sense that i have the luxury of affording an opportunity loss. Bust because i gave up on the opportunity doesn’t mean i’ll give up my hard work. and if people can’t except that, than keeping them around is an opportunity loss too. And sometimes the money doesn’t come back and i lend the money being prepared for the consequenses.
By the way, only make decisions that you can handle the consequenses for. Yeah you may never know how a decision turns out until it does but it is you who is lending the money. You can’t blame people for asking or taking. The only actions are the ones you control, and you facing the outcome of those reactions has to be something you consider.
Also, never say never.
You, lending money could mean that someone someday could lend you money too and no one is above that, there’s so many things out of your control and stumbling into a situation where you’ll be desperate is not something you can truely be sure you’ll never do. I’m not saying lend money to anyone so that you can ask them for it too, but don’t be so overly confident of yourself that you’ll never be in a position where that decision is so cut and dry.
Love the “never say never” line because it is so true!
My grandmother has said that with never judge someone for their position in life. My favorite quote for this came from Ip man: “We all have different positions in life, but we all have the same dignity”
The most important thing I’ve taken away from these comments – put yourself in the best position or one that you can’t be hurt when making the decision to loan money. Whether it is free or not, it shouldn’t be something you bank on in the future as needed money.
Thanks for sharing!!
I have provided money to a couple of family members in the past and decided to consider it a gift rather then a loan, partly because I could afford it and partly because I wanted to avoid the hassle of future confrontation. On reflection, I realized that if someone is willing to take my money, then they will also need to take my advice about how they are handling their finances. I envy those people who have families that “watch their back”, as my experience is that is the exception and not the rule. Good article and conversation. Thank you.
I think the ‘enabling’ or ‘helping’ boundary is a good one.
I have never lent money to friends or family, but we have helped with a gift a couple times. I would happily give large amounts to my parents who did so much to set me up for a better path than they had. This is so clear as a parent myself that I feel bad that I didn’t plan to do so specifically all along (not that I am owed anything from my kids).
I think that one problem with lending or gifting money is that often those who most deserve it wouldn’t accept it. You use your best judgement and if it goes sideways, that’s okay. Sometimes we give people things to improve ourselves as much as to help them. I expect anyone in the FI world can understand the personal growth involved in self sacrifice.