What is the best way to help someone get out of a financial hole?

[bankgirl05]

I work in banking, and I have seen similar situations time and time again. If you do want help him get on track this is what one of my customers did: they established a Basic checking account (low monthly fee) no minimum balance requirement, in both of thier names, but basically she held the checks, did not give him a debit card, and gave him an allowance. His pay checks were direct deposited so it was there each week. It was a lot of work at first, they sat down once a week and decided what needed to be paid when, and how much money he had to spend, they even set up a savings account about 6 months later, and he would set aside a potion of his pay just like a bill into his savings. I don't work in that branch any longer, but one of the girls I know says he still comes in and is doing well!!!
I would definately shop around for banks though, some offer lower fees if you have a direct deposit and online bill pay. Credit Unions are fabulous for this (I work at one now) and now-a-days you can find one you can belong to just for being you!!! (we have a community Charter that says as long as you live, work, worship, volunteer or attend school in one of the 2 counties we have branches in you can belong!) Goodluck, I commend you for wanting to help.

 

[DISdreamin']

Honestly, I'd second the people who said PT job. When DH and I had full-time contracting positions that suddenly became veeeeery PT, we went out and got PT work on the weekends. We ended up doing cleaning jobs - dusting, vacuuming, cleaning sinks and toilets. But it was what we had to do to make sure our bills were paid, so we did it. Not my favorite job ever, to be certain, and I was really glad to let it go once we could!

Dave Ramsey always seems to mention delivering pizzas as a way to earn money. Has your brother looking into PT jobs to help get him back on track? Oh, and Dave Ramsey's FPU, yup that is something that would help, but I think he'd have to want to go. IMO it's probably sort of like rehab - you have to want to be there and participate. If you go into it not believing, or not ready, it won't work.

 

[rnorwo1]

Thought I'd update everone since the thread has been revived! I spent awhile with my brother just teaching him better basic habits, like recording in his check register. I just acted as a sounding board for helping him to plan which bills to pay and budget what is left over... he has a hard time looking at how much money is available versus what needs to be paid... he just pays things without knowing if he can cover it! He made the first two weeks without going in the red, and seems to be on track for this pay period.

He's done a really good job at not spending anything extra for about a year now, so that's not hard for him. He had just gotten into a cycle of living in overdraft to keep his bills paid on time, but I think if he can stop paying overdraft fees, he may actually make all the bills.

Unfortunately he has not been offered any new positions yet.... it's really hard to find a job around here. He's already working weekends and late evenings at his current job, so no time to work an extra job. Unfortunately he isn't paid overtime though... hence the need for a new job! He's in the process of selling his place that is much closer to his work to live in a condo he has been trying to rent out... will save a note each month, but his transportation costs will sky rocket, but hopefully it will still save some. Every little bit will help.

Thanks again for all the advice, I needed the smack down to stop feeling sorry for him and enabling!

 

[jcano]

Dave Ramsey has a financial course that my husband and I attended and it was wonderful!!! Go to http://www.daveramsey.com/fpu/ and see if there's a class in your area. If there is I would sign your brother up- that you can pay for-It cost about $100 but it is soo valuable. It will teach him all the things everyone is talking about in this thread. You know what they say don't give a man a fish, but teach him how to fish!!! This would do it !!!
Dave Ramsey is GREAT!!!

Just about to post the same info. You are enabling him...not helping him. Help by giving him the tools that he needs.

 

[Shelly F - Ohio]

Sit down with him and be frank. Tell him that you have done all you can do for him and that you are not going to bail him out. He needs to not live beyond his means and then expect family to bail him out.

He needs to cut up all of his credit cards but one and he needs to give you that one card for safe keeping.

Plus if he looks for a new job a lot of times a credit check is run on new hires and he could hinder getting a new job based on his credit.

Its tough love but it is what it is.

 

[shortbun]

I agree that he needs to drop his checking account, start buying money orders for his bills. It's costing him so much money!!! He could better afford Direct TV although he should get rid of that and go with DVD's or get his TV online. I personally think phones are a security issue-either cell or land line but not both. Last, he needs to get a second job. I don't think there is anything wrong with you giving him money once in a while but put a limit on it and make that clear to all parties. He's your brother and he's obviously not being foolish just having a tough time keeping his head above water. He needs to continue to look for work to cut his commute as those are always expensive but for now, he should keep his job. Maybe he can find an apartment closer to work and save that way. Good luck, you are a good sister.
eta: every system seems great to the people for whom it's worked. Teaching a man to fish does not feed him immediately. He must have nourishment in order to be able to learn. I don't think you are enabling your brother by helping him. He sounds like he's doing the best he can. Some people take longer to learn and some are not able to learn. We do not put our weak on the mountain top to die in this society. kwim?

 

[Mickeyflower]

Just wanted to chime in here as someone who has been where your brother is. Living without a checking account is possible, but he will end up paying more in check cashing fees and money order fees that a basic checking account costs.

All banks will teach you how to balance your check book, and how it works. All you have to do is ask. Usually, community education will have financial work shops that are free.

As for saving money, it's difficult when your county every penny. Not spending loose change is the best. I also take at least a dollar from each check (not a lot but the dollars add up) and put it into my savings account. I start at a dollar, and go up from there. Do a few weeks at a dollar, then a few weeks at $5. I fill my ash tray with all my spare change, and when it fills up, I roll it and add it to my savings account.

 

[arminnie]

Do not give him another penny. You have been there and done that already.

My cousin helped her nephew by totally taking over his money for a couple of years (about 15 years ago). His entire paycheck went to her. She paid his bills and gave him spending cash. It was a lot of work for her, but he really got his act together. Help with HOW to manage money is so much more important that just handing over money.

 

[rnorwo1]

I agree that he needs to drop his checking account, start buying money orders for his bills. It's costing him so much money!!! He could better afford Direct TV although he should get rid of that and go with DVD's or get his TV online. I personally think phones are a security issue-either cell or land line but not both. Last, he needs to get a second job. I don't think there is anything wrong with you giving him money once in a while but put a limit on it and make that clear to all parties. He's your brother and he's obviously not being foolish just having a tough time keeping his head above water. He needs to continue to look for work to cut his commute as those are always expensive but for now, he should keep his job. Maybe he can find an apartment closer to work and save that way. Good luck, you are a good sister.
eta: every system seems great to the people for whom it's worked. Teaching a man to fish does not feed him immediately. He must have nourishment in order to be able to learn. I don't think you are enabling your brother by helping him. He sounds like he's doing the best he can. Some people take longer to learn and some are not able to learn. We do not put our weak on the mountain top to die in this society. kwim?

This is my philosophy too, and I chose my profession based on it! Although my DH and I work hard for our money and work at managing it well, I know that of luck and good fortune have alot to do with what we have in life...even if that means we were just born with more common- sense-DNA or whatever, we have just been blessed plain and simple, and I try to never forget that. My brother has a wonderful work ethic and is talented at what he does, but he also has some limitations that are not his fault. He's learned to work around them in many areas, but not so much in others.

That being said....I do think I was enabling awhile back b/c he got a clean slate without learning new skills. It's been awhile since then though, and he's learned remarkable survival skills... he's living on next to nothing right now. So hopefully he's learned those lessons for life. I'm sending him gift cards to Walmart every few weeks now so he can eat something other than tuna out of a can, but that's about it. I think he can make it now, he is just going to have to have several paychecks without paying overdraft and late fees. He doesn't have any credit card debt or anything right now, and he seems committed to not ever going that route again!

 

[crikcrik1]

I love Dave Ramsey. My husband and I discovered his program 3.5 years ago, and it completely change our financial lives. We got on a budget and started telling our money how to work for us instead of living paycheck to paycheck and barely making it each month. We had a LOT of debt and have paid off $85K since we started. We're still working on being debt-free, but the biggest help was learning how to budget and "make our money mind."

I really think your brother would benefit from the course. He could learn how to budget and stop dying by 1000 cuts with all the late fees, etc.

You are a wonderful sister for caring. I don't think you should abandon him, but don't enable either.

 

[GoofyIsMyHomeboy]

Just wanted to chime in here as someone who has been where your brother is. Living without a checking account is possible, but he will end up paying more in check cashing fees and money order fees that a basic checking account costs.

All banks will teach you how to balance your check book, and how it works. All you have to do is ask. Usually, community education will have financial work shops that are free.

As for saving money, it's difficult when your county every penny. Not spending loose change is the best. I also take at least a dollar from each check (not a lot but the dollars add up) and put it into my savings account. I start at a dollar, and go up from there. Do a few weeks at a dollar, then a few weeks at $5. I fill my ash tray with all my spare change, and when it fills up, I roll it and add it to my savings account.

This could also be a place where you could help without entangling your name with his finances. If he gave you even five dollars a week to put away for him eventually he'd have a small cushion for unexpected expenses. If you have control of this cushion it won't be so easy for him to dip into and might actually still be there when those expenses come up. One adult controlling or trying to control another adult's finances always has the potential to get dicey, though.

Living beyond your means and ignoring your finances is a a bad habit much like smoking, overeating, over drinking etc. Until he makes up his mind that he is going to change, and puts some real effort in to make that change, spending your money to try and help him isn't going to fix the larger problem.

I do wish you the best of luck with it. I have a friend in a similar bind right now (mid-bankruptcy). It's hard to watch someone struggle when you know you could fix things, at least temporarily. I'll bring a bag of groceries when I come over, always offer to drive if we go somewhere, collect coupons and freebie offers for her, treat for movies occasionally,just little things to help. She is doing what many people here have suggested - living on cash. It has helped. She had to re-learn that you just can't spend money you don't have. At least not for long.

Good luck, I hope things turn out well.

 

[dfchelbay]

Very long story short, my brother (40 yo, divorced, one kid grown) is a financial mess. He filed bankruptcy maybe 10 years ago and got back on track, then he was in an accident and spent 2 years with surgeries and rehab, on disability and racked up cc debt again. I bailed him out of that debt, he went back to work and was doing well, but then a year or two later I ended up giving him quite a bit more money for more debt. My DH and I are ok financially but not where we'd like to be in terms of savings goals, so sending him money is not the easiest thing for me to justify, and I feel so guilty asking my DH to help him (although they have a great relationship.)

Finally he has been staying out of debt, however, his basic bills do not leave much wiggle room in his budget, so anytime anything comes up, like car repairs, he is in the hole again. While he's not returned to credit cards, he's paying a fortune in NSF and late fees, and constantly in the negative. He is juggling things around every month, making double payments (to catch up on missed payments) on some things while neglecting others, to turn around and do the same thing with different bills the following months.

He is also completely clueless about how to manage money (and I mean the basics, like recording the checks you've written and truly understanding how much money is available... he thinks looking at the balance online is sufficient!), but he is living very frugally. I just looked at his bank statements and there is no going out to eat or other entertainment or shopping... in fact he only spent $111 the entire month on food/toiletries and such.

I have listed for him things he should cut, like the phone and direct tv, but that's about all he has that is even remotely a "luxury." He is looking for a new job to hopefully increase his pay or at least decrease his commuting costs, but who knows how long that will take?

Obviously, sending him more money will not solve anything. He needs someone to teach him how to manage what he has and he needs a more permanent fix, such as increasing his income. We are several hours away from each other, so sitting down with him in person to demonstrate how to maintain a checkbook will be very difficult.

The only thing I can think of is to start another checking account for him, something we both have access to, and deposit some money in it to give him a fresh start, while his current checking account sits and gets sorted out of this negative cycle. That way, I can look at the account daily and give him feedback, maybe I can check in with him daily and see what he is showing in his check register balance, etc. Then maybe I can help him catch mistakes before they get out of hand again?

Any other thoughts?? I would love an idea that did not require me putting out more money for him! If he did cancel the above (which would only free up about $200 a month) and we just worked on him getting out of the cycle himself, how long should that take? I just don't see how to do that while incurring the negative fees, but I've never been in this situation before... maybe it's not impossible?

Thank you so much for any ideas!!!

Maybe you could buy yourself a slingbox and set it up at your house. Then, he can load the software on his computer and can watch your cable tv for free. He can cancel his monthly cable tv/satellite bill. That will give him a bit more wiggle room.

 

[Taja]

You could help him:

Develop a monthly budget (based on actual expenses) to be updated at the beginning of the month.

Prioritize expenses.

Realize that some things he considers essential may not be (housing, utilities, food, basic transportation and basic job-appropriate clothing are essential). Eliminate cable, dining out and other entertainment, use prepaid cell phone (or less expensive plan and carefully watch minutes/texts used), use internet service at the local library--which just happens to be a good place to check out Dave Ramsey's Total Money Makeover book.

Help him set up a cash-basis system for most expenditures (exceptions: mortgage/rent, insurance--recurring monthly expenses).

While I don't agree with everything Dave Ramsey says, his system is an excellent way to start understanding one's financial issues (need more income, fewer expenses) and developing plans to deal with them.

Usually, the biggest issue these days (assuming CC habit has been eliminated) is unemployment and/or underemployment. It may be necessary to work two or three jobs just to survive.

It's a lot of work and can be fairly painful in terms of not having funds to use for non-essential items, but it does work. And your brother is at a good age to be able to rebuild his life!