Home » Spending Practices » The Family and Your Spending: Relatives and Extended Family

The Family and Your Spending: Relatives and Extended Family

Enter your email address to follow Know Your Money and receive notifications of new posts by email.

Join 416 other followers

Categories

RSS Know Your Money

  • Listen To Certified Financial Planner Tonight, On Donell Edwards: VIEWPOINTS
    Understanding how to avoid making costly mistakes in managing personal finances, and achieve and maintain control of personal finances. Continue reading →
  • A New Day
    I apologize for my absence, but I embarked on a new venture that took much more time than I imagined, but it was well worth it.  In March of last year I started my own talk radio show.... Continue reading →
  • The Conversation Everyone Avoids, That Almost Everyone Should Have
    38% of American households carry month-to-month credit card debt...."Households with the lowest net worth (zero or negative) hold an average of $10,308 in credit card debt."...69% of Americans have less than $1,000 in savings, while 34% say they have no savings at all. Continue reading →
  • Important Announcement
    So, having money problems is not always the result of a lack of knowledge but can involve a person's judgment, circumstances, and sometimes... Continue reading →
  • Her Story
    Recently, a story came to light in my hometown about a 27 year old woman who was cited for a misdemeanor sex charge. She was caught by an undercover detective in a sting operation targeting escort services. It was her first night on the job. How did she get there? She said.... Continue reading →
  • Know Thyself
    She told Oprah that losing her money was the result of, “being a millionaire with a ghetto mentality.” ... The only relationship she had with money was spending it. Continue reading →
  • Saving Is Not Optional!
    There are many attitudes and philosophies about saving, but there is one factor that cannot be ignored in achieving financial security, and that factor is.... Continue reading →
Advertisements

Donell EdwardsDonell Edwards, Blogger

About Donell Edwards: Donell Edwards is President of CWR Media and is also founder and publisher of The College World Reporter (CWR) magazine and CWR World News & Information Service.  He is also a professional speaker, freelance writer, and entrepreneur.

 

 

 

Know Your Money
Thursday – March 27, 2014

 

SPECIAL Family Spending Series
The Family and Your Spending:  Relatives and Extended Family
By Donell Edwards

All of this week we have been trying to make a point that the family can and does influence spending, and that it is necessary to understand how those closest to you affect spending decisions that you make.  Some times this may come in the form of assistance you are asked to provide.  So it is necessary to have a game plan, a plan of action when your assistance is requested or needed, and in regard to parents and grandparents, even adult children to some extent, to set aside funds in the budget to be able to care for these needs when they occur.

Also, within the immediate family circle, mates or significant others and children, there must be communication, education, and cooperation, in order to ensure that everyone is working together to avoid wasteful spending, instead of being detractors and influencing wasteful spending decisions.

The last post in this special series on family spending deals with relatives and extended family, really close friends that are treated like family.  If you are viewed as being in a good financial position it is easy for relatives and extended family to come to you when in need financially.  Even if you are not viewed as being in a solid financial position, if it is perceived that you are in a position to help, you will probably be the one that relatives and extended family most often turn to.

No one should tell you what your relationship should be with your relatives and extended family, and that is not what this post is about.  You must decide what you will do whenever anyone asks you for money.  Our intent is to help you understand the impact your decisions may have on your finances in the short term as well as in the long term.

There is a difference when someone is really in need due to an injury, illness, loss of employment, or some other situation beyond their control, than when their situation is the result of poor money management, gambling, addiction to alcohol or drugs, or just laziness.  You should make it a point to know your relatives and extended family well enough to have some idea of their situation, which should be a factor in making your decision.  Even if you decide to help knowing that their situation may have been caused by their own actions, at least you are making that decision with the awareness of the circumstances, and it is your choice to help, rather than thinking you are helping someone really in need and later discovering that you have been blindsided by someone taking advantage of your kindness.

 

MP900385400 - Money Handout

 

 

As I mentioned, your decisions regarding you and your relatives and friends are up to you.  We are just encouraging you to always think first, consider how your decision to help anyone financially is going to impact your budget and your finances and make your decision based on knowledge and with compassion.

A rule that I use regarding lending money and helping others which I will share with you, I call The Rule Of  One, is based on what I am in a position to do at the time and is an opportunity for the person being helped to demonstrate to me their character.  The way The Rule Of One works is that I will only lend what I can do without even if the person does not repay me without it affecting my budget or my finances.  If the person pays me back as agreed that establishes some basis for trust in the event they ask for help in the future.  If they do not pay back what was loaned as agreed and make no effort to make payment or offer an explanation why, The Rule Of One means that I have given that individual one opportunity to earn my trust and they have failed, and I will not help them again.  I am not recommending my methods, I am just sharing this with you for your information.

As I mentioned previously, we should know to some extent the circumstances of our relatives and extended family, or make an effort to discretely ascertain what those are before making a decision to provide help.  If I know someone is really, really in dire straits and they come to me and I am in a position to help, I don’t want to add to their burden, and generally I will tell them this is not a loan, I want to help and I am giving you this money to help you.

If you have concerns about the person but you still would like to help, another way to protect yourself is to make the situation a business transaction.  Make a contract outlining the amount being loaned, the purpose of the loan, when it is to be repaid, if not all at once the dates and amounts to be paid until the loan is paid in full, and any interest if you decide to charge interest on the loan.

What happens is that those with wrong motives will generally back away from signing a contract, or if they do they understand that now you have a document that makes them liable for following a course of action that they have agreed to, and that may be used against them in small claims court.  Obviously, this will not eliminate everyone who has the intention of taking advantage of you, but it will eliminate most, and those whom it doesn’t you won’t have to worry about them in the future, and if you choose, you have a means of taking legal recourse against them.

The point is, always be money wise, think about what you are doing with your money, and although you should want to be a compassionate person and help whenever and however you can, think first before doing anything and make sure that you are protecting yourself, your budget, and your family.

 

Are You A Spendaholic?  Send Us Your Confessions:

If you would like to share with our readers how “bad” spending habits have affected you, anonymously or otherwise, for our upcoming special, “Confessions Of Spendaholics,” please send your experience to comments@knowyourmoneyglobal.com.


Follow us on Twitter for more information about personal money management
https://twitter.com/Kn0wY0urM0ney

Copyright © 2014 CWR Media – All Rights Reserved

 

 

Advertisements