Should You Try to Help Friends or Family Financially?

I’ve made some dumb mistakes in regards to “helping” friends and family in that past, like loaning out money even though I knew I shouldn’t have.

While I think that loaning money to a friend or family member is a bad idea in most circumstances, what about offering advice or going through your contacts to get them a good deal?

I like to help people. It just makes me feel good and when I see an easy opportunity to help someone I take it. But I continually learn that helping people financially just doesn’t always work out.

In general I think the people you try (or want) to help fall into three categories.

 

Some People Can’t be Helped

Some people can’t be helped. It’s a tough pill to swallow – but it’s true.

One of my friends is getting a large income tax refund. He’s also about to have another baby. Due to a constantly growing family, his car will no longer fit each family member. So, he’s in the market for a new vehicle.

His credit is less than stellar so he planned on going to a buy here, pay here car lot. I know that the prices a lot of buy here pay here lots have are inflated, along with extremely high interest rates, and super-fast repos if a payment becomes past due.

I also happen to be in good with some very honest people who own a buy here, pay here car lot and he asked me to check on vehicles for him. So, I did.

I knew that if I called to check vehicle prices for this friend that he’d not only get a good interest rate but also a cheaper price. Plus, he’d get to pick his own payment (within reason.) You can’t get a much better deal than that.

They had several cars that he was interested in. The only catch? He needed fifty percent down. This was really no problem seeing as he’d get a large income tax refund in a few short weeks.

However, he didn’t want to wait a few short weeks. He wanted a car and wanted it now.

So, what’d he do? Went to a car lot that only required $200 down, got a vehicle at super inflated price, and a 20 percent interest rate. Just so he could get the vehicle this past weekend.

I didn’t make a big deal of it I was just trying to look out for him. It’s just frustrating that when you try to help some people (like explaining interest rates), that even if they ask for your advice they don’t take it.

 

Some People Don’t Want Help

Then there are some people, maybe like your parents, who wouldn’t take a dime from you even in extreme circumstances.

I really try hard not to shell out financial advice unless someone specifically asks me for it. Even if my Dad was talking about money and I chimed in with my two cents he’d let it go in one ear and out the other.

I think we can all relate to this, though. There are some things that you probably don’t want help with either. Even if you know an expert on the subject you’d rather figure it out yourself.

Some people don’t want help and that’s okay. They either want the reward of accomplishing something on their own or are just too stubborn to take advice from someone else.

I just try to keep my opinions to myself in these type of situations. It’s better to do this than strain a relationship by giving unwanted advice.

 

Some People Are Appreciative

Then there are those people you feel really good about helping. They ask for your advice or for you to hook them up with a certain person and they are truly grateful. And, they’d happily return the favor to you whenever you need it.

They aren’t looking for a handout, just a favor.

 

Help Who You Can

When we see a friend or family in a sticky situation we want to help. That’s just human nature.

However, just because we think we see someone who could in some way benefit from our help doesn’t mean that the person wants help or can even be helped. As frustrating as it can be, some people will never want to change their financial situations and some people want to do it without the help of others.

Before you lend out a helping hand assess the situation because you might just be straining relationships or wasting your time.

Do you lend out financial advice to friends or family?