How to Help a Financially Irresponsible Family Member or Friend

There’s an older friend of mine who has a son that he loves dearly, but the son just takes blatant advantage of the situation. He stops by to see his father only when he needs a handout, and although those visits are somewhat friendly, it’s really obvious that the son is mostly just there with his hand extended. The father opens up his wallet and hands over his cash and, almost as quickly, the son races out the door to do other things, leaving a deflated father sitting in a chair wondering what went wrong.

It’s a common experience. A friend or family member struggles greatly to get their finances in order. They fail repeatedly. They fall into a pattern of just asking family members and friends for “help” to get through a “rough patch,” but never change the underlying behavior.

You want to help that person – you seriously do – but it begins to feel like financial help is just pouring money into a bottomless pit with no real change. You feel used and taken advantage of, and the other person makes you feel like you are nothing more than a bank for them to tap. It’s not healthy for either one of you.

That gut feeling of nothing ever changing is usually the correct one. People who fall into this kind of cycle in their life are very rarely helped by continued financial assistance. Rather, continued financial assistance is almost always used to perpetuate the personal and financial mistakes that led to needing financial assistance in the first place.

However, this doesn’t mean that you want to abandon these people, and it’s fear of conveying that sense of abandonment that often keeps people handing out money against their better judgment.

Here’s the cold truth, though: just handing over cash doesn’t help the person you’re trying to help, and it certainly doesn’t help you. You need to find a better path going forward, and here’s how to do it.

Make a clean break – no exceptions. As of today, you’re no longer going to just hand cash over to a financially irresponsible family member or friend that comes knocking for a handout. It’s over. It doesn’t help that person, as evidenced by the fact that they keep coming back. It doesn’t help you, as evidenced by the fact that your money keeps vanishing. A new path has to be found, and it starts now.

This does not mean that you will no longer help your family member or friend, but that the help will become non-financial in nature. This brings us to the next point…

Decide how you will help non-financially before communicating that clean break. How exactly will you help this person that you care about without just handing over cash? That’s a tough question, and it depends a lot on the person’s character and the situation that they’re in.

You might find it best to simply offer a friendly ear and meaningful advice. You might be able to offer some sort of non-financial help, like giving someone a ride to work or simply having them over for dinner once a week or help them research ways to find more help. Consider what you can actually do – not give, but do – to help that person find a better path in their life, one of independence.

When you communicate that you are no longer going to help financially, make it extremely clear with no wiggle room. Don’t make it sound like you’re not handing over cash this week but you’ll do it next week. Make it abundantly clear that you cannot afford continued financial assistance and that the assistance is not bringing about any sort of meaningful change in their life, as they keep coming back for more.

This is a permanent change. Make that very clear. Don’t leave any wiggle room.

At the same time, make it very clear what kind of help you will offer instead. This needs to be done in parallel, or even given first, because without it, you’re giving off signs of abandoning that person. That’s not the goal here. The goal is to transition to non-financial help if they need it.

Talk about what you will do for that person, something that you should have already considered and decided long before the conversation takes place. You will give them a ride to work. You will help them fill out job applications. You will have them over for dinner on Sundays. You will watch their daughter while they go out looking for work. You will take care of their pets if they go into rehab. Those are non-financial things that you will commit to in order to help them.

If you’re concerned about retribution or other negative emotional responses, have others present when you have this conversation. Sometimes, people are scared to have these kinds of conversations because they are worried about the emotional stability of the person they’re talking to. If this is a real concern for you, consider having this conversation when others are present or else at least when they’re quickly available, such as having someone else in another part of your home while the conversation is happening, or having this conversation in public.

It can be very difficult to deal with strong emotional reactions or emotional instability from someone you care about. Often, they’re purely reacting on the emotional response in that moment, in which they see a financial source disappearing, and that’s often very difficult to handle, especially when you’re missing a longer-term perspective on life.

If you are in a situation where you are providing financial assistance to someone out of a sense of fear, this is a situation you need to escape from for your own safety. Consult other people in your life and have support for you ready as you cut that financial link. It needs to be done for your own long-term safety and freedom.

Come through consistently with the non-financial help. If you’ve promised some form of non-financial assistance, such as driving that person to work or taking care of a few of their obligations while they go job hunting, come through with your offer. Show up and take care of what you promised to take care of.

If you can’t manage to do that, then this becomes less about cutting financial ties and more about cutting ties altogether. You are choosing to change the nature of that relationship and when that changing nature is uncertain, if you aren’t abundantly clear in your actions as to what the new terms are, your actions can describe something that you may not want. The other person may just interpret it as abandonment in their time of need and walk away from you entirely.

If you promise something, come through. Be sitting outside their home in time to drive them to work. Have yourself ready to go for child care when they drop off their daughter. Make a good meal on Sunday evening. Be there to listen when they stop by or call you. Don’t make your promise of non-financial assistance be an empty or meaningless one.

The thing to remember throughout all of this is that persistent financial assistance for a financially irresponsible family member or friend doesn’t help either one of you. It keeps them from seeking a path to true independence and personal success, and it keeps you from all of the opportunities that life has to offer. Cutting that financial relationship gently and carefully, while still showing love and compassion, is a key step for both of you to find the success that you both want in life.

Good luck!

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.