Jan 23, 2025
Anyone who puts aside $15,000 by the time they’re 20 has the kind of discipline it takes to fulfill their dreams, whether that’s studying abroad or investing.
It’s an enviable position to be in, particularly from the point of view of relatives struggling with debt. They may think they’re entitled to your hard-earned money simply because they’re family, especially if they believe their immediate needs are more important than your long-term goals.
Put your financial security first
Let’s say your pregnant cousin’s request has you in an emotional bind. You could end up in a bigger bind if you give her a handout — even if the impulse to help is natural.
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One survey found that about 60% of U.S. adults have helped family members out financially in a time of need. But the same survey revealed that 35% of the people that did so ended up damaging their credit score and their relationship with the person they helped.
It can be a vicious cycle. Research suggests that those of limited means are often the same people who give in to pressure from loved ones to hand over money when they can least afford to.
The only way out of this difficult situation is to set clear financial boundaries.
Remind yourself that you’re not responsible for the choices they make and respond to requests for financial support with compassion and clarity. Explain that you have already committed the money, and end the conversation by making clear you will stand your ground on your choice.
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Offer help in other ways
The good news is that you can help out a loved one who is struggling financially without handing over your money, especially if you value your relationship and want to preserve it.
Here are some suggestions:
Launch a fundraiser. This can be a private family fundraiser or a crowdfunding initiative. You can make a small contribution to the cause, but ask other family members to donate as well. This is a good way to equalize the family pressure.
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Look for ways to refinance debt. Work with your loved one to see whether they can consolidate high-interest debt on credit cards and pay it off with a new loan at a lower interest rate. This may mean a trip to the bank together.
Help them set a more realistic monthly budget. Sit down with your relative and do a deep dive into their monthly bills to look for savings, such as dining out less frequently, buying clothes at thrift shops or finding savings on insurance.
Look into government benefits. Help your loved one apply for government support. For example, the USDA’s Women, Infants, and Children Benefits (WIC) program supports families with free healthy foods, breastfeeding support, nutrition education and referrals to other services.
Connect them with legal aid Sometimes relatives need legal support as well as financial assistance. For example, legal aid officials can pursue a claim for child support from a father.
By offering non-financial help, you can still show kindness to your cousin while preserving the dreams you have worked so hard to save for.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
