Financial problems can be a very isolating ordeal. Those who experience them often wish for support but unsurprisingly find that it sometimes comes with a price tag. This is often the case when dealing with accountants and financial advisors.
More people have been focused on repairing their finances rather than ambitiously growing their wealth in recent times. Real concerns are surfacing around affording household bills and debt payments, with many Canadians being a stone’s throw away from financial ruin.
If you are lucky enough to be experiencing some degree of financial stability, you should know that many other people are not so fortunate. The struggle is everywhere, and it can be closer to home than you might initially presume.
Here are some tips for helping family members who are struggling financially.
Suggest Great Resources
You can audit your family member’s spending and teach them as much as you know how to. That said, unless you are a financial expert, there will always be a limit to the level of guidance and wisdom that you can supply.
Try to recognize when you’re out of your depth and recommend reliable services instead. For example, income tax calculators can be highly useful and tailored for people in certain regions. One webpage is titled Income Tax Calculator Ontario, helping people to estimate their provincial taxes efficiently. The location can be switched to the other areas of Canada too. Either way, users can benefit from better visibility around margins, deductions, refunds, and what they owe.
These online resources can be useful and informative tools. Because of how easily they can be accessed, users don’t need to worry about their taxes again. Much peace of mind can be found here. Sit with your loved one and go through these options together. After some time, they should be able to use the website independently, giving them a greater sense of agency with their finances.
Audit Your Loved One
Not all financial problems are down to bad luck. While it’s tempting to take the side of your loved one if they’re enduring hardship, there’s always a chance, however slim, that their problems could be of their own making.
Sit down together and audit the family member. Where is their money going? Try to see if they have excess subscriptions or overspend on their shopping trips. Many costs can creep up on a person, and some may not even realize they have spent so much money until it is too late.
Your family member may not be responsible for their misfortune. Still, it’s worth double-checking things all the same. Do not frame your efforts as doubting your loved one – simply establish a consensus early on. That way, you have a solid foundation from which you can develop solutions.
You can also lean into a series of teachable moments here. If there’s a clear pattern of money mismanagement, you can highlight these instances and show proof of your accusations. There’s nowhere to hide with an audit, so it could be a real turning point for your family member.
Remind Them About Assets
People can have a lot of money but very little cash. If your family member has invested a lot of their wealth into stocks, vehicles, property, or cryptocurrency, it may be time to start cashing out on some of them to balance the books somewhat.
If the need for money is an emergency, then saying goodbye to some assets can be a very challenging ordeal. It’s easy to grow attached to personal property, especially if they were passed down or gifted by somebody important. Still, compromise is often a key part of salvaging a financial disaster.
There’s some nuance to these situations. If your family member is the co-owner of an asset they wish to sell, they must ask the other person for permission. Where necessary, researching and getting valuations to optimize the sale price of cars or property is also highly recommended.
It could be worth reminding your loved one that large amounts of money should seldom be sitting in a bank account. If it’s all simply hoarded, it could leave them vulnerable to scams, so it’s always best to invest in things like property where their wealth can build and be more secure.
Draw Attention to Scams
It’s more difficult than ever to not only achieve wealth but to hold onto it—many people out there vying for people’s money via unsavory and immoral means.
Keep your loved ones informed about the potential of scams, especially if they are vulnerable. Refresh their memory around suspicious emails and cold-calling. Remind them that no employee representing a bank would ever ask for their details or passwords, either.
Avoiding problems such as these may seem like common sense. However, there’s always the potential for getting mixed up in something dubious. Even the most well-reasoned individuals can become victims here, so practicing caution around one’s finances is always a good idea.
Consider Mental and Emotional State
Even if your loved one is aware of scams, their sense of rationality can be impaired if they are in a poor mental and emotional state. They may be more likely to make mistakes in money management if they are feeling stressed or disassociated.
Try to remember that some people don’t necessarily want you to be a financial advisor. They may simply wish for a supportive family member during these times. You should try to be as empathetic as possible and endeavour to be a dedicated listener.
Unfortunately, younger Canadians are experiencing a physical toll owing to their financial stress. Obviously, these types of ordeals are not confined to those in a particular age range either, with many people suffering from poor health and fatigue due to all their concerns. In the end, it is important to remember that these thoughts and feelings can lead to poor health.
Only courageous and loving family members can be unfailingly supportive during these darker periods in life. Be patient and understanding, and your calmer persona may make a real difference in your loved one’s life. It may even be worth suggesting a visit to mental well-being professional if these problems persist.
Budget Your Time
As much as you may wish to help your loved one indefinitely, spending most of your life supporting another person is unreasonable. There are paid professionals who can do this and services already mentioned.
Consequently, you must pay close attention to your own well-being during this time. If you are burnt out from all your responsibilities in your life, then helping to manage another person’s finances is surely a recipe for disaster. Help where you can, certainly, but do try to recognize your own limitations.
If your loved one needs consistent financial help, then scheduling the time at which you can lend support is for the best. That way, you mitigate the chances of being overwhelmed, and your family member can set reasonable expectations as to what they can ask of you. Remember, boundaries are always a positive thing.
Recommend Inspirational Stories
People who experience financial struggles endure great hardships. Many people see the struggle as a hopeless endeavor and cannot see a way out for themselves no matter how hard they try.
It might seem like a smaller gesture, but recommending the reading of other Canadian success stories might be enough to inspire and motivate your family member into action. If people can muddle through dire circumstances for a shot at a better life, then why should your loved one not follow suit?
Of course, the very best inspirational stories stay with people long after they were first told. They can be recalled fondly during most testing times and bring calm and reasoning to high-pressure situations. Ultimately, some people simply need to know that they can not only recover from their plights but excel far beyond them too. It’s just a matter of time, patience, and hard work!
Deciding to Fund Your Family
The question of whether or not to lend money to your family is immensely personal. Not everybody would be comfortable doing it, but others may loan their funds out in a heartbeat if it meant protecting the people they love.
There are many reasons you should pause at this juncture and deeply consider your approach. Valid questions to ask are:
- Can you afford to help? You could later need the money that you are lending out. Is your financial future as secure as you presume?
- Will you get the money back? Is your family member somebody you can trust? Do they have a history of breaking repayment promises with yourself and others? What is the economy like?
- Could your relationship sour? Money can be just one reason some familial bonds are strained. It can taint meaningful relationships in any situation, so your reasoning needs to be free of other people’s influence and feelings.
Ultimately, it is up to you what you decide to do here. There are good reasons to choose either path. So long as you are certain of your actions and have complete faith in the family member you are lending money to, all should be well.
