In the aftermath of the great recession, economic uncertainty is a reality for many families. And for others, budgets are tragically certain; they are completely nonexistent. There are more people than ever in dealing with a budget crises. These emergencies stem from unemployment, foreclosed homes, medical bills and student loan debt.
Given the far-reaching effects of the recession and its aftermath, chances are that you or someone you know has run into some economic difficulties. Things can be especially difficult when a member of your family experiences a budget crisis. Whether it is your child, parent or sibling dealing with financial problems, you may end up needing to lend a helping hand so that your relative can be back on his or her feet.
Leave Your Judgments at the Door
Have you been telling your daughter to stop her foolhardy spending? Did you advise your brother not to take out that high-interest loan? Even if you predicted the current financial calamity, this is NOT the time to tell your fallen family member “I told you so.” It won’t help the situation, and it could potentially cause a family rift.
Consider Renting a Room
If you can handle it without getting too stressed out, consider letting your family member move in. You don’t have to bring in a freeloader-simply require the the new resident pay rent or help out around the house. This is an easy way to help relatives get back on their feet again.
Co Signing a Loan
If your relatives are in danger of losing their home, co-signing a loan may provide temporary relief while they sort out their finances. Of course, you’ll want to think carefully before you do this. Co-signing a loan, even with a family member, can be extremely risky business. If you truly doubt your family’s members ability to make payments, avoid a personal loan agreement at all costs. If the money does not get paid back on time, it will be your credit score on the line.
Next time a family member is in an economic bind, consider lending a little financial or emotional help. Family members should take care of each other, and who knows, you might end up needing assistance one day.
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