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Helping cash-strapped family members

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July 13th, 2009
emptypockets
emptypockets

Between layoffs and the troubled markets, many people are experiencing financial hardship. When people fall on hard times, they often turn to family members for help. If you re the head of your family, you may be grappling with how to best help your struggling adult children or grandchildren. Lending money is always an option if you can afford it. But, even if you have extra cash, Tampa, Fla., financial planner Kimberly Overman says you should still treat it as a loan, with a fair interest rate, repayment terms, and signed documentation. But if you can t afford to lend money or don t believe it s the best solution, there are still many ways you can help cash-strapped relatives: 1. Cut them some slack: One of the cheapest things you can give is your understanding. Out-of-work children and grandchildren might not be able to afford airfare to visit you this year and might need to eliminate gifts. Overman says to avoid guilt trips, and let them know you re aware of their limitations. 2. Play headhunter: Job searching can be an exhausting endeavor. Overman says parents can help without spending a dime by reviewing resumes and sharing professional contacts. Help them be successful in what it is they do for a living, she says. 3. Lower entertainment costs: If your kids aren t as flush as they once were, they ll appreciate you planning budget-friendly activities. Instead of staying at a luxury resort, go camping and have dinner at home with the family instead of going out, Overman says. 4. Be a financial adviser: Nicole Hall of Lending Tree says offering guidance on budgeting or lowering expenses is a no-cost solution to help struggling family members get back on track. 5. Take the first step: If debt or problems like gambling have contributed to your loved one s financial woes, Hall says you can help by finding resources like credit counseling for them. That can be really hard for people when they are up against a wall, so it s helpful to have someone you trust help you take that first step, she says. 6. Hire them: Do you already pay people to mow your lawn or take care of the pool? Kathleen Campbell, a Florida financial adviser, suggests hiring your unemployed children or grandchildren instead. My philosophy is, if somebody is going to get paid for this stuff, let s keep it in the family, she says. 7. Pick up the tab: If you re financially secure, but not comfortable loaning money outright, Campbell says you can opt to pay tuition or medical expenses directly to the school or health care provider. 8. Help them get around: If you re planning to buy a new car, Campbell says consider giving yours to a family member. If you don t need the vehicle as a trade-in, this is a great way to help job-seekers who need reliable transportation. 9. Take them in: If you live nearby and have space, Campbell says letting family move in with you may be a solution. But, she says to be clear on expectations, like the length of the stay and household chores. 10. Give your time: If you re retired and have free time, you can help family with free babysitting and other services that will give them flexibility to focus on their job hunt.

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