Creative ways to give financial assistance to a sibling?
May 7, 2007 9:26 PM   Subscribe

I want to give a sibling financial assistance, but want it to be more than short-term relief. What are some ideas?

I just came into a bit of money. One of my siblings has been struggling for awhile, getting more and more into debt - not because of irresponsible decisions, but just a shortage of income relative to the size of their family - and I would like to help them out financially.

While I could just give them money to pay down some of their debts, that isn't going to improve their cashflow situation and in a few months they'll be back where they are now. What are some creative things we could do with the money that would either reduce their expenses, or increase their income each month?

I'm thinking about earmarking around $5000 for them.
posted by anonymous to Human Relations (7 answers total) 2 users marked this as a favorite
How about paying off their highest interest debt? I'm guessing they never quite have enough to make the payments - getting out from under the interest might free up enough for them to make a dent in the next most expensive debt by themselves.

Or maybe they need either finanical counselor or a job coach to help them get into a position where income meets outgo. Where I live you could buy membership in a local career counsleing center plus aptitute testing plus lots of one on one counseling for maybe $1000.
posted by metahawk at 9:52 PM on May 7, 2007

Possibilities are endless. Aside from the logical investments (shares, bonds, savings, stock etc) you could...

- Purchase a solar system for their house to reduce their power bills

- Get the a more economical vehicle to reduce fuel expense

- Improve their house (cladding/insulation) to reduce heating costs

- Depending on their line of work, perhaps purchase them something to increase their productivity.

- Give them some money towards a qualification (if they can fit the study time in) which could lead to a promotion/change in job.
posted by chrisbucks at 9:57 PM on May 7, 2007

Open up Roth IRA accounts for your nieces and nephews.
posted by mlis at 10:05 PM on May 7, 2007

The easy answer, as metahawk pointed out, is to pay down their highest interest debt.

It's really hard to say without knowing more about their situation.

At one point in my life I needed a car to get a better paying job but couldn't afford a car. My brother loaned me one of his for 8 months so I could get on my feet.

Do they have a reoccurring expense that could be reduced or eliminated by buying something (like another/more reliable car, energy efficient appliances)?

If they've gone to debt counseling then maybe consider a service that you could buy for them. Day-care, maid service, etc. Even if this doesn't directly save them money it might relieve the stress of being eyeball deep in debt.

If they haven't done debt counselling, set up an appointment for them, get a sitter for the kids and take them to the counselor, then out for a really nice meal and talk about what you can do together.
posted by Ookseer at 10:08 PM on May 7, 2007

Pay off their debt. You don't need to get more complex or long term than this - debt is a problem that compounds over time. Fixing it now is a long-term solution.
posted by zippy at 12:08 AM on May 8, 2007

I could just give them money to pay down some of their debts, that isn't going to improve their cashflow situation

But it would. With less debt to service, cash flow increases.

Their biggest expenses are probably housing, food & transportation.

Housing - If they are getting killed by a ARM, use the $ to help them do whatever is necessary to get refinanced (e.g., keep up with payments long enough to get refinanced).

Food - Rent them a plot of land to grow their own food.

Transportation - Help them maintain their vehicles so they don't get hit with a huge bill down the road because of poor maintenance.
posted by probablysteve at 7:48 AM on May 8, 2007

My mother did this with two of her brothers. One of them is extremely financially idiotic, and was deep in debt. She gave him a large (fifty grand?) sum to help him get out of his high interest debt. She then started two large college funds for his children (actually, she had already started them when the kids were born, as a gift, and just increased them by a lot). My uncle pulled himself out of debt and is living a much better life, but that took six years after she gave him the money. However, a very important thing to realize: your sibling will have to pull themselves out of debt. You can help by giving money and advice, but try not to be heart broken if they do something stupid (like build a pool with their new found debt limit). You have to see your money as a gift, given out of love, and not think of yourself as their savior.

I'm not saying that you do think this, I'm just warning against the possibility
posted by nursegracer at 8:54 AM on May 8, 2007

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