Friend on the verge of financial ruin, how to help?

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Topic Author
neowiser
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Friend on the verge of financial ruin, how to help?

Post by neowiser »

I am in my late 50's and want to figure out the best way to help my friend from college who is spiraling downward. She has bounced from one company to another for the past 20 years doing midlevel accounting type work. She always finds a new job when things get rough and she is on the verge of being fired but it is getting harder and the stress of her current job is literally killing her. My impression is that she is in over her head at these places, unable to learn the new software fast enough and receiving no support from the employers.

She is a single mother who lost most of her savings in a contentious divorce and she took on debt to put her only child through college. That child has recently graduated in a promising career but is having trouble landing her first job. My friend is paying her daughter's portion of rent until the daughter can find a job.

My friend works 7 days a week and still can't catch up with the project she has been assigned. She has several chronic health issues that make her dependent on the insurance through her job. She owns a condo that I suspect has little equity, I don't press for details.

It's possible she will be fired from her current job and end up on unemployment for awhile. I have encouraged her to look for less demanding work, but she claims she cannot afford to do this and still be able to retire at 65 when she will be eligible for Medicare.

My husband and I are secure and could afford to help her financially, but I don't have a clue on the best strategy. Should we determine an amount that we can afford to give and ask her which expenses she would like us to pay? I do not want to give her money outright because I worry she would use it to support her daughter, who should be pushed to support herself at this point. The possibility of paying medical expenses is appealing because the IRS doesn't count those contributions as gifts. However it would also make sense to pay her mortgage, so she will at least have a roof over her head. We could contribute about $12,000 the first year, but then what?

Does anyone else have experience with a friend or relative who you decided to support financially? What worked and what didn't work?
OnTrack2020
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Re: Friend on the verge of financial ruin, how to help?

Post by OnTrack2020 »

Has your friend ask you for help? Or are you just her sounding board?

We did do some supporting of our son who recently took a job in another town where we didn't have a rental place lined up, so he lived in an extended stay place for a few weeks. After he found a rental and signed the lease, he lost his job and was out of work for about a month, but found a better job. We did some assistance toward the extended stay and paid for groceries when he was out of work. But, he did have money saved (still does) to pay for rent, utilities, etc.

These are some, what I would consider, larger expenses (mortgage, medical bills) that you are talking about paying. Are your friend and daughter able to downsize? Sorry, but the daughter, even though she has graduated college, can certainly land something for more than basic minimum wage, if necessary.
tashnewbie
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Re: Friend on the verge of financial ruin, how to help?

Post by tashnewbie »

Agree with user above...has friend asked for your help? If she hasn’t, I’d probably stay out of her business. You’re talking about extending sizable help. I assume you’re very close to this friend.
sd323232
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Re: Friend on the verge of financial ruin, how to help?

Post by sd323232 »

best advice here, stay out of it and concentrate on your own finances please
TheDDC
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Re: Friend on the verge of financial ruin, how to help?

Post by TheDDC »

sd323232 wrote: Sun Sep 27, 2020 6:43 pm best advice here, stay out of it and concentrate on your own finances please
+1

I would offer my time to get them assistance as needed. Beyond that it's a good idea to be there a shoulder to cry on and to be a good source of advice, not a cash register.

-TheDDC
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oldfort
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Re: Friend on the verge of financial ruin, how to help?

Post by oldfort »

You must either be a very good friend or very rich. I can't imagine giving $12k to someone or receiving $12k from someone who wasn't related to me.
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galawdawg
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Re: Friend on the verge of financial ruin, how to help?

Post by galawdawg »

neowiser wrote: Sun Sep 27, 2020 4:56 pm She has bounced from one company to another for the past 20 years doing midlevel accounting type work. She always finds a new job when things get rough and she is on the verge of being fired...
And she is on the verge of being fired again??

I agree with the others. Supporting her financially would be a very unwise decision. You've given her some advice but she is unwilling to take it. With what you have shared about her work history, there are many red flags. Be a good listener but only she can make the necessary changes to move forward.
J295
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Re: Friend on the verge of financial ruin, how to help?

Post by J295 »

Kind of you to consider your friend.
Won’t weigh in on giving or not giving decision.

If I were gifting I would give a check with no strings attached.
NewMoneyMustBeSmart
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Re: Friend on the verge of financial ruin, how to help?

Post by NewMoneyMustBeSmart »

Best advice I can think of is to offer her gifts with conditions for subsequent gifts. This is yours; if you do this we'll give you more. Under no circumstances would I do a loan.

If she's in a dead end job that's killing her, maybe offer to pay for a sabbatical. Pay her mortgage and groceries and nondiscretionary costs so can relax, and figure out how to get out of the hole she's dug.
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JoeRetire
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Re: Friend on the verge of financial ruin, how to help?

Post by JoeRetire »

neowiser wrote: Sun Sep 27, 2020 4:56 pmThat child has recently graduated in a promising career but is having trouble landing her first job. My friend is paying her daughter's portion of rent until the daughter can find a job.
If your friend is receptive, you could advise her to stop doing that.
I have encouraged her to look for less demanding work, but she claims she cannot afford to do this and still be able to retire at 65 when she will be eligible for Medicare.
Not everyone can retire at 65. Perhaps she needs to give up on that goal, at least for now.
I do not want to give her money outright because I worry she would use it to support her daughter, who should be pushed to support herself at this point.
Are you in a position to help her find a better job - one that wouldn't fire her? That seems to be the right long-term solution.
Last edited by JoeRetire on Sun Sep 27, 2020 7:21 pm, edited 1 time in total.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
bltn
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Re: Friend on the verge of financial ruin, how to help?

Post by bltn »

Giving your friend money won t really help with her underlying problem which is poor money management with no savings. A monetary gift may actually make things worse by creating an expectation during the next financial crisis.

Continue with advice.
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Re: Friend on the verge of financial ruin, how to help?

Post by Jack FFR1846 »

Why is the daughter with no job living in her own apartment? She needs to move home. She'll equally have no job but will also have no rent payment and can help her mom.

I'm going to add that daughter should get a job at Lowes/Home Depot/Amazon/Wal Mart. All are hiring nationwide and all pay more than nothing. While interviewing for a career job, there's a need right now to be earning and helping the family.
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jebmke
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Re: Friend on the verge of financial ruin, how to help?

Post by jebmke »

J295 wrote: Sun Sep 27, 2020 7:11 pm Won’t weigh in on giving or not giving decision.

If I were gifting I would give a check with no strings attached.
Gifts with strings attached are called transactions.
When you discover that you are riding a dead horse, the best strategy is to dismount.
phxjcc
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Re: Friend on the verge of financial ruin, how to help?

Post by phxjcc »

Jack FFR1846 wrote: Sun Sep 27, 2020 7:26 pm Why is the daughter with no job living in her own apartment? She needs to move home. She'll equally have no job but will also have no rent payment and can help her mom.

I'm going to add that daughter should get a job at Lowes/Home Depot/Amazon/Wal Mart. All are hiring nationwide and all pay more than nothing. While interviewing for a career job, there's a need right now to be earning and helping the family.
^^^This


"Promising career, can't find a job".
No, sorry, that's called unemployed.
She needs to find a job that supports herself completely.
30 days, or she moves home.
After the next 30 days, she starts paying rent, or she moves out.
No car, no rent, no food, no car insurance, no clothes money, no "mad" money, nada.

The recurring theme is the daughter being a liability.
However, the problem is the mom because the daughter is acting the way she has been taught to act by her mother.

The dog poops in the house.
The owner gets mad and cleans it up.
The dog: "what's with the yelling? YOU keep cleaning it up!"

OP: you might lose a friend by telling her this.
It is what she needs to hear.
frugalecon
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Re: Friend on the verge of financial ruin, how to help?

Post by frugalecon »

I also have a friend who was on the verge of ruin, still is tbh. He also has been fired repeatedly from jobs. I helped out for a while, giving about $6000 before tiring of his unwillingness to make changes so that there would be a different outcome. I came to the view that giving no strings attached money was not really helping. Personally, if you really care about this person, I would offer to provide some advice, but only if it were really desired. Like help with basic budgeting and strategies for coping. I ultimately decided not to give my friend more assistance, and , after the period where he was very nasty to me and told me that I was the Brutus to his Caesar, he figured out a way to manage on his own. If a person isn’t mentally ill, which is a separate thing, in most cases he or she can figure out how to survive. It may not be a life I would want, but then I have led my life all along so that I am not in that position. It isn’t my responsibility that other people have made different decisions.
mptfan
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Re: Friend on the verge of financial ruin, how to help?

Post by mptfan »

Has your friend asked for your help or your advice?
Kelrex
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Re: Friend on the verge of financial ruin, how to help?

Post by Kelrex »

Unless you have enough resources to provide her with financial security indefinitely, then as generous as you are, you won't necessarily be helping her.

If this was someone who needed a one time gift to get them through a rough patch, but there was a clear path to stability on the other side, then that might be another matter. Still risky, but with a clear possible path to a happy outcome.

What you are prepared to offer though won't likely get her through to the other side of anything sadly. Not only is it not nearly enough, there is unfortunately no other side to get to at this time.

Then there's that you really, really shouldn't infantalize another adult. If you want to give her money and she wants to spend it on her daughter, then that's her business. It's not your decision if she uses money in a way that you deem is wise, it never has been, and it never will be, and it's totally inappropriate to try.

I know that's frustrating and disappointing, but you are in for a world of pain if you don't realize it beforehand.

Is there a way to financially help? Perhaps.
Just don't fall into the guardian angel trap. It's complicated, ugly, frustrating, dehumanizing to *both* sides, and almost always guaranteed to injure all parties involved.

If you go ahead with this, do not expect to come out the other side feeling good about it. If you're okay with that, then you may be able to navigate this. If ending this with bitterness and resentment isn't an acceptable outcome for you, then take a beat and reflect very very carefully on this before you do anything.
J295
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Re: Friend on the verge of financial ruin, how to help?

Post by J295 »

jebmke wrote: Sun Sep 27, 2020 7:27 pm
J295 wrote: Sun Sep 27, 2020 7:11 pm Won’t weigh in on giving or not giving decision.

If I were gifting I would give a check with no strings attached.
Gifts with strings attached are called transactions.
Not understanding your comment. The dictionary definition of transaction is an exchange or transfer of goods, services, or funds. A gift can be conditional or unconditional. No strings attached means it’s unconditional. A gift with strings attached is typically called a conditional gift.
Last edited by J295 on Sun Sep 27, 2020 8:49 pm, edited 2 times in total.
bogivan
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Re: Friend on the verge of financial ruin, how to help?

Post by bogivan »

bltn wrote: Sun Sep 27, 2020 7:20 pm Giving your friend money won t really help with her underlying problem which is poor money management with no savings. A monetary gift may actually make things worse by creating an expectation during the next financial crisis.

Continue with advice.
I agree with this. It is commendable to want to help an old friend, but if you aren't already deeply, deeply involved in their finances and lives, there is a very real risk of making things worse. Comments like "My impression is that she is in over her head" and "owns a condo that I suspect has little equity" indicate that you don't really have a complete picture of what is going on. The situation with the daughter also seems to be very concerning and adds a whole other layer of complexity which is another reason to tread very carefully.

Imagine, for example, if she were truly on the verge of something like bankruptcy or foreclosure: you might be able to extend the current situation for some period with your $12,000, but that money might have essentially been wasted if the result is only just delaying the creditor actions.

You're already concerned about a gift impacting her daughter's job motivations, but what if the gift also saps your friend's motivation for getting further help? You might pay medical bills, but what if she could have negotiated them down with the providers? You might help her with the mortgage, but has she pursued forbearance? Maybe in the event of unemployment she could qualify for heath assistance, but what if a big check from you messes with qualifying for that assistance right away?
Xrayman69
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Re: Friend on the verge of financial ruin, how to help?

Post by Xrayman69 »

The background sounds unfortunately like a very predictable and expected result over a long period. The current situation is a result of prior events and decision. No need for me to rehash the OPs shared events (and possibly many more not shared i. This post). I not only fear for the OPs friend but the example that is currently being lived by the friends daughter. Fast forward another 20 years and is the same scenario being repeated for the daughter.

OP, your intent is good. The situation is tough for you with regards to your friend, but tread lightly. Advice and follow up is much more valuable then financial support. Advice and “presence” much like a counselor allowing the friend the opportunity to view the situation and advance can be a liberating process that hopefully will lead to durable self reliance and continued independence.
Topic Author
neowiser
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Re: Friend on the verge of financial ruin, how to help?

Post by neowiser »

Very good input here, thank you. I’ve known this friend for 40 years and she is like a sister to me. I suspect if the situation were reversed she would offer to help me. Her daughter shares an apartment with a boyfriend, so moving out would be complicated.

I had previously offered to help with medication expenses, and for the first time she mentioned that possibility should she get fired and face a period without insurance. I will follow through with the medication offer but will hold off on additional offers, the daughter needs to realize how dire the situation is.

She is seeing a financial planner now who seems to be giving good advice. I once suggested she consider relocating for a job and that advice was not well received. I no longer offer advice unless I’m asked, which rarely happens.
mptfan
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Re: Friend on the verge of financial ruin, how to help?

Post by mptfan »

You did not say whether your friend asked for your help or advice.
bogivan
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Re: Friend on the verge of financial ruin, how to help?

Post by bogivan »

One possible suggestion that avoids a lot of the gifting pitfalls discussed here is to invite her on a free vacation with you or you+husband. You could even claim that you got a "Buy One/Two, Get One Free" deal or travel voucher that you need to use before it expires to reduce any awkwardness or concerns about repayment. Obviously this won't directly assist with her financial pressures, but if the stress and health concerns are getting to her then some time off might be helpful if possible.
MerriebytheSea
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Re: Friend on the verge of financial ruin, how to help?

Post by MerriebytheSea »

Good to hear that you have the kind-heartedness to want to help an old friend, but I add to the caution about taking on what could become a dependency. Your friend’s problem is bigger than a financial hump. She needs a self-help plan. Underperforming for twenty years, in positions where she is marginally competent and often on the verge of getting fired, would be a terrible strain. That she is working seven days a week just punctuates the need to come up with another plan. If she is in her late 50’s, say 58, then 65 is still seven years away. I cannot see the advantage of putting herself through 56 hours of anxiety every week for seven more years. It doesn’t make much since to dig her own grave in the quest for the earliest possible retirement.

It would be better for her health to work one fulltime and a small part time jobs that she does well and enjoys. Since she has accounting skills, she could consider opening her own small business offering bookkeeping services. In our area, small businesses that provide unskilled yard workers and house cleaners begin at $30-35/hr. I don’t want to get too off in the weeds about insurance; it is expensive but rates are reduced for people who are lower income. If self-employment is not an option, she should consider interviewing for a government position where performance expectations are not high and they are not apt to make her work weekends without overtime pay. As a final point – she may be shocked how much her health improves if she finds work that keeps her moving rather than stuck at a desk for 56 hours a week. The body does not like immobility or long term stress.
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Re: Friend on the verge of financial ruin, how to help?

Post by mcraepat9 »

I think these situations are very tough for Bogleheads in particular because BHs tend to be compulsive savers/planners so falling into a situation like this would be a rare event. But I think you have to let this woman come to you for help and then you can impart whatever wisdom (and support) you can and want to give her.
Amateur investors are not cool-headed logicians.
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unclescrooge
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Re: Friend on the verge of financial ruin, how to help?

Post by unclescrooge »

Jack FFR1846 wrote: Sun Sep 27, 2020 7:26 pm Why is the daughter with no job living in her own apartment? She needs to move home. She'll equally have no job but will also have no rent payment and can help her mom.

I'm going to add that daughter should get a job at Lowes/Home Depot/Amazon/Wal Mart. All are hiring nationwide and all pay more than nothing. While interviewing for a career job, there's a need right now to be earning and helping the family.
+1
When times are tough, you go where the jobs are.
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joe8d
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Re: Friend on the verge of financial ruin, how to help?

Post by joe8d »

mptfan wrote: Sun Sep 27, 2020 7:56 pm Has your friend asked for your help or your advice?
Many times people need advise but are embarrassed to ask .You should be able to sense that and offer advice in a "nonoffending" way.
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liverpool
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Re: Friend on the verge of financial ruin, how to help?

Post by liverpool »

Probably not a good idea to ask for advice on an issue which is essentially emotional from people whose focus is mostly dollars and cents. My advice would be to follow your heart, after all you have said this person is like a sister to you. Not sure you can put a price on that.
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joe8d
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Re: Friend on the verge of financial ruin, how to help?

Post by joe8d »

unclescrooge wrote: Sun Sep 27, 2020 9:50 pm
Jack FFR1846 wrote: Sun Sep 27, 2020 7:26 pm Why is the daughter with no job living in her own apartment? She needs to move home. She'll equally have no job but will also have no rent payment and can help her mom.

I'm going to add that daughter should get a job at Lowes/Home Depot/Amazon/Wal Mart. All are hiring nationwide and all pay more than nothing. While interviewing for a career job, there's a need right now to be earning and helping the family.
Yes, Nothing wrong with working at Target until something comes along and better to have that on your resume than nothing. I Believe I saw a statistic that 25% of the retail workforce have 4 yr degrees
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mptfan
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Re: Friend on the verge of financial ruin, how to help?

Post by mptfan »

joe8d wrote: Sun Sep 27, 2020 10:06 pm Many times people need advise but are embarrassed to ask .You should be able to sense that and offer advice in a "nonoffending" way.
I don't agree. When it comes to money and financial issues, I think it's best to mind your own business unless someone explicitly asks for your help or advice.
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bottlecap
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Re: Friend on the verge of financial ruin, how to help?

Post by bottlecap »

Your friend has bitten off more than she can chew. I’m not sure why you feel responsible.

Almost no one can have everything they want.

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Watty
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Re: Friend on the verge of financial ruin, how to help?

Post by Watty »

One thing you might consider doing is paying for her health insurance if she does get fired.

You would know that money would not be wasted and it would also help avoid the situation where she might drop her insurance then money for an expensive medical procedure if she gets cancer or something. If that happened you might be in a dilemma where if you don't help her pay for an expensive treatment then she might die.
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Re: Friend on the verge of financial ruin, how to help?

Post by BruDude »

It’s always difficult seeing a long time friend face financial troubles when you have been successful and done things “the right way” and maybe they haven’t. Some people take offense to this kind of help while others are incredibly grateful. If you think it would be the latter, I would give her the money and tell her it’s a gift no questions asked.
socaldude
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Re: Friend on the verge of financial ruin, how to help?

Post by socaldude »

Don't do it... the crucial sentence was..." the last 20 years..", I would mayyyyybe give her a $100 gift card on Thanksgiving , birthday etc. I have "loaned" friends and family money 5 times that I can recall, and each and every time I have regretted it. I agree with others, paying her daughters rent? Her daughter needs to move home a get any job and help mom out! Keep your distance, a drowning person can drown you !
Kelrex
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Re: Friend on the verge of financial ruin, how to help?

Post by Kelrex »

neowiser wrote: Sun Sep 27, 2020 9:04 pm Very good input here, thank you. I’ve known this friend for 40 years and she is like a sister to me. I suspect if the situation were reversed she would offer to help me. Her daughter shares an apartment with a boyfriend, so moving out would be complicated.

I had previously offered to help with medication expenses, and for the first time she mentioned that possibility should she get fired and face a period without insurance. I will follow through with the medication offer but will hold off on additional offers, the daughter needs to realize how dire the situation is.

She is seeing a financial planner now who seems to be giving good advice. I once suggested she consider relocating for a job and that advice was not well received. I no longer offer advice unless I’m asked, which rarely happens.
I completely understand how you are feeling.

My advice and perspective above doesn't come from a cold or analytical place, it comes from personal experience and witnessing the many personal experiences of others.

You simply don't have enough resources to actually help her, and by trying to, you could end up destroying a friendship, which is what she's really going to need moving forward.

Let me put it this way:

Would you be willing to indefinitely move her into your home? That's the litmus test here. If you can't honestly say yes, then don't start inserting yourself into her personal finances, because it is that involved and intimate, and in many ways, even moreso than living together.

Remember, the most valuable thing you provide her moving forward is your friendship, because she is desperately going to need to feel loved and supported when the wheels fall off. This financial aide you are trying to provide is *the most* likely path towards destroying that friendship.
Valuethinker
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Re: Friend on the verge of financial ruin, how to help?

Post by Valuethinker »

Kelrex wrote: Mon Sep 28, 2020 5:01 am
neowiser wrote: Sun Sep 27, 2020 9:04 pm Very good input here, thank you. I’ve known this friend for 40 years and she is like a sister to me. I suspect if the situation were reversed she would offer to help me. Her daughter shares an apartment with a boyfriend, so moving out would be complicated.

I had previously offered to help with medication expenses, and for the first time she mentioned that possibility should she get fired and face a period without insurance. I will follow through with the medication offer but will hold off on additional offers, the daughter needs to realize how dire the situation is.

She is seeing a financial planner now who seems to be giving good advice. I once suggested she consider relocating for a job and that advice was not well received. I no longer offer advice unless I’m asked, which rarely happens.
I completely understand how you are feeling.

My advice and perspective above doesn't come from a cold or analytical place, it comes from personal experience and witnessing the many personal experiences of others.

You simply don't have enough resources to actually help her, and by trying to, you could end up destroying a friendship, which is what she's really going to need moving forward.

Let me put it this way:

Would you be willing to indefinitely move her into your home? That's the litmus test here. If you can't honestly say yes, then don't start inserting yourself into her personal finances, because it is that involved and intimate, and in many ways, even moreso than living together.

Remember, the most valuable thing you provide her moving forward is your friendship, because she is desperately going to need to feel loved and supported when the wheels fall off. This financial aide you are trying to provide is *the most* likely path towards destroying that friendship.
Yes good advice.

A loan won't help - bigger hole, plus a sense of personal obligation which will destroy the friendship.

Gifts aren't large enough to solve the problems.

Exceptions:

- give cash or useful gift cards for Xmas, birthdays etc - $100 then will be really appreciated. Sometimes it can be just to pick up the tab for the week's groceries.

- if the person winds up going bankrupt and then can't get credit, help with deposit for apartment, etc. $1200 then, say, to get a roof over their head (or a car so they can drive to work) can, literally, save a life.

But they have to be in a situation where they have negotiated with their creditors and agreed a payment plan (or gone through personal bankruptcy). Otherwise your money goes in, and the creditors just hike it back out.

They need to consult with a personal finance charity (American equivalent) which will help them identify which spending they can cut out, and negotiate with their creditors.
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changingtimes
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Re: Friend on the verge of financial ruin, how to help?

Post by changingtimes »

A brother-in-law, who never married and is in his 50s and has worked most of his life in an industry that's now dying, was laid off just before the pandemic hit. He has always been on the edge of solvency, not because of profligate ways but because his profession is not known for high pay.

I offered to pay his rent through the end of the year, and I write the checks directly to the management company. I wanted him to be able to focus on job hunting without a fear of losing his apartment. He did get a part time job almost immediately, at least, and continues to interview. But I made clear that it was only for a set amount of time, and will be sticking to that.

He never would have asked for help, and I'm sure he is embarrassed, but I did it as much for my late DH, who I know would have wanted me to use some of his monies that he didn't get to use himself in a situation like this.

I do think offers of specific help--like paying for medication, like you mentioned--are the way to go. And a set time period.
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Re: Friend on the verge of financial ruin, how to help?

Post by MikeG62 »

neowiser wrote: Sun Sep 27, 2020 9:04 pm Very good input here, thank you. I’ve known this friend for 40 years and she is like a sister to me. I suspect if the situation were reversed she would offer to help me. Her daughter shares an apartment with a boyfriend, so moving out would be complicated.

I had previously offered to help with medication expenses, and for the first time she mentioned that possibility should she get fired and face a period without insurance. I will follow through with the medication offer but will hold off on additional offers, the daughter needs to realize how dire the situation is.

She is seeing a financial planner now who seems to be giving good advice. I once suggested she consider relocating for a job and that advice was not well received. I no longer offer advice unless I’m asked, which rarely happens.
It sounds like the best thing that could happen is happening - she is getting advice from an objective/independent person. Hopefully that will get her on the right path forward.

Sadly, I tend to think that most people who end up in a similar financial position to your friend do so as a result of a lifetime of bad financial decisions. I don't see how your giving her $ would necessarily change that. She needs to realize the error of her ways and have this result in a change in the way she responds to the financial choices in her life. It's sad, but she is probably not unlike a sizable % of the US population.
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Jags4186
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Re: Friend on the verge of financial ruin, how to help?

Post by Jags4186 »

Be a good friend. Invite her over for dinner every now and then. If she asks for advice give it to her.

I wouldn’t be writing a check. This isn’t helping a friend who had a curveball thrown at her. This is a friend who’s means doesn’t fit her lifestyle anymore. I suspect whatever money you give her, while potentially giving her temporary relief, won’t really change the problem. I wouldn’t be looking to take on a 50+ year old adult child, which is what it sounds like you are proposing.
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Re: Friend on the verge of financial ruin, how to help?

Post by Jack FFR1846 »

neowiser wrote: Sun Sep 27, 2020 9:04 pm Her daughter shares an apartment with a boyfriend, so moving out would be complicated.
Oh please. If the daughter wants to play house with her boyfriend, she should be able to pay her own way. There is no lack of nearly immediate jobs. Just not in her field, which I understand. Too bad. Life doesn't cater to you just because you want to live with the boyfriend.

Amazon, Wal Mart, Lowes, Home Depot, probably Target (I have not seen signs specifically, but haven't been to Target lately). Why is she not already working at one of these places who are begging for workers.

One of my sons works for Amazon in the warehouse. They appear to be a good company who treats the workers well. He's a 20 hour per week employee while waiting for a specific shift full time job to be approved and even PT, get vacation time.
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lostdog
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Re: Friend on the verge of financial ruin, how to help?

Post by lostdog »

I borrowed money to a friend. It was a mistake. He said he would pay me every two weeks. The two weeks turned into a month and then every other month. You see the pattern?

I am no longer going to borrow money to friends that are bad with their money. It's too high risk. I'll eventually get the money back but mentally it's gone. It's my fault.

He's still my friend, he's just bad with money.
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Re: Friend on the verge of financial ruin, how to help?

Post by PoppyA »

I have a similar friendship in length, love, & inability to manage life on her part. I believe in using my charitable abilities close to home, on things I see actually help, & not on administrative costs of large charities.

That said, I also believe your friends ability to manage her life will not likely change. Gift cards are a great idea, as is including her in on vacations. Even some anonymous gifts.

The best thing you can do is accept her reality & love her. That is a gift you give yourself.
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neowiser
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Re: Friend on the verge of financial ruin, how to help?

Post by neowiser »

One possible suggestion that avoids a lot of the gifting pitfalls discussed here is to invite her on a free vacation with you or you+husband. You could even claim that you got a "Buy One/Two, Get One Free" deal or travel voucher that you need to use before it expires to reduce any awkwardness or concerns about repayment
I have actually done this several times. We live on opposite coasts, so I plan a getaway in a vacation rental somewhere we can meet. She has covered her flights and I cover everything else using a variety of explanations. We cooked our own meals and visited places with mostly free sightseeing opportunities. It’s been good for both of us, and my husband is supportive.
A brother-in-law, who never married and is in his 50s and has worked most of his life in an industry that's now dying, was laid off just before the pandemic hit. He has always been on the edge of solvency, not because of profligate ways but because his profession is not known for high pay.

I offered to pay his rent through the end of the year, and I write the checks directly to the management company. I wanted him to be able to focus on job hunting without a fear of losing his apartment. He did get a part time job almost immediately, at least, and continues to interview. But I made clear that it was only for a set amount of time, and will be sticking to that.

He never would have asked for help, and I'm sure he is embarrassed, but I did it as much for my late DH, who I know would have wanted me to use some of his monies that he didn't get to use himself in a situation like this.

I do think offers of specific help--like paying for medication, like you mentioned--are the way to go. And a set time period.

Thank you, this is what I envision, a safety net for a fixed period of time. Every time I speak to this friend I encourage her to explore opportunities in local government even if it means a pay cut. The only alternative at this point is to go on disability, which she could do based on her health history. But that would result in benefits fixed at about $2400 per month for life and I’m not sure how much she would be able to earn at a part time job without affecting benefits.

Lots of collective wisdom on this site and I needed to hear that I should toughen my skin a bit in this situation.
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Sandtrap
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Re: Friend on the verge of financial ruin, how to help?

Post by Sandtrap »

Did your friend specifically ask for financial help from you?

"I need xxxxx $$$, can you lend it to me?"

(based on multiple personal experiences that vary from person to person)

Actionably:
(Friend)
Sell home. Rent.
Relocate to LCOL, low cost of living region.
Obtain less stress employment.
Daughter and boyfriend are adults and self sufficient, paying for rent is enabling while they "play house" and put off adult employment and self sufficiency. Give notice when rent will be discontinued. The results may be a pleasant surprise.
Seek various gov't assistance re: health care, etc.
*Specific concrete actions reflecting a desire and need and willingness to make substantive changes.
(substantive changes = substantive results)

(You)
Give advice and guidance as needed and requested.
Give emotional support as needed and requested.
Can your friend move in with you in dire times? Temporarily? Temporary/permanent?
Read and give copies to friend, "Life Strategy" and "Life Code" by Dr. Phil. (Amazon.com)
(If you provide a financial safety net for a fixed period of time, can you take it away if your friend continues to be dependent?)

(disclaimer)
Lot's of different ways and opinions on these types of matters that vary per each person per incident per . . . . . :shock:

*Sometimes; safety nets, training wheels, crutches, and life subsidies, all appear the same.
j :happy
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changingtimes
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Re: Friend on the verge of financial ruin, how to help?

Post by changingtimes »

neowiser wrote: Mon Sep 28, 2020 8:23 am Thank you, this is what I envision, a safety net for a fixed period of time. Every time I speak to this friend I encourage her to explore opportunities in local government even if it means a pay cut. The only alternative at this point is to go on disability, which she could do based on her health history. But that would result in benefits fixed at about $2400 per month for life and I’m not sure how much she would be able to earn at a part time job without affecting benefits.

Lots of collective wisdom on this site and I needed to hear that I should toughen my skin a bit in this situation.
I actually suggested the try-to-get-a-job-with-the-government approach to B-I-L, for both current benefits and, if he sticks it out long enough, a pension (since I'm sure he has very little saved).

I do agree with the other posters, though, that the daughter needs to step up. I probably would have been less likely to jump in to this situation were there kids. (I'm pretty sure he's getting help from his parents as well, but, perhaps like in the situation with your friend, I think we have all just expected for a number of years that we are going to have to pitch in to help him.)

And just maybe there was a little self-preservation tied into my generosity--I'm the only one who lives within a thousand miles of BIL, so I was heading off any other family member coming up with "maybe he could just stay with you for a little while to save on rent."

Preventing that alone is worth the outlay. :)
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Re: Friend on the verge of financial ruin, how to help?

Post by galawdawg »

So let's see if I understand this:

Your friend has had a very unstable work history for twenty years with multiple instances where she is about to be fired due to poor work performance but is able to move to another job just before that occurs. Now you indicate that she is again about to be fired.

Despite your suggestions, your friend refuses to consider other work that may be more suited to her abilities, skills, knowledge and possible health concerns.

Your friend may be on the "verge of financial ruin" yet she is paying the rent for her adult daughter (and her boyfriend) who is apparently not yet motivated enough to get some type of employment, even as a temporary stop-gap.

You mention that "I do not want to give her money outright because I worry she would use it to support her daughter, who should be pushed to support herself at this point" yet any financial support you give her will be used, directly or indirectly, to support her daughter. Money is fungible. What if you re-framed your sentence to read, "I do not want to give my friend money because I worry she would use it to support herself and her daughter, when they should both be pushed to support themselves at this point."

There are more issues here than just a temporary financial setback. Your friend's situation appears to stem from decades of problems with unsatisfactory work performance, a number of unwise financial decisions, and the refusal to consider the advice of others. Your friend appears to be committed to staying on the same path that has brought her to this point and your money will merely enable that behavior. If that is truly what you wish to do, all the best. And if that is the case, it doesn't matter how you provide that support. Your friend can simply direct the money she doesn't have to spend because of your charity to whatever she chooses, including paying rent for her adult daughter and her live-in boyfriend. And history will continue to repeat itself. Sometimes the only time a person will change course from self-destructive behaviors is when circumstances are such that they have no other choice.

You appear to be a very caring and compassionate friend, but be cautious not to let your compassion get in the way of what may be a very necessary "wake up call" for your friend. If that is the case, you won't be doing her any favors.

Sorry if my advice is not well-received and I know this is a heck of a way to welcome you to Bogleheads. But folks here speak from years of experience. Good luck.
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Re: Friend on the verge of financial ruin, how to help?

Post by dziuniek »

Not to downplay working at the state level, but I do see that as being easier when one ages. (Especially in accounting)
Lots of systems are older or not updates as frequently.
This would also help with her chronic health problems (maybe) - insurance is usually top notch when working for the state.

It's not a bad place to be when one is becoming older. Maybe she should consider such employment?
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neowiser
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Re: Friend on the verge of financial ruin, how to help?

Post by neowiser »

I am a lifelong Bogleheader, even before I knew about Bogleheads, so none of the suggestions here strike me as harsh. Emotion has always been the bane of good financial decisions, which is why it is so difficult to reconcile the two.

I received an inheritance 5 years ago and the amount I would like to gift my friend is not more than what I would otherwise contribute to our donor advised charitable account. She is not aware of the size of my inheritance, it would make my attempts at offering advice even more awkward. The amount isn’t enough to be able to offer her continuing support.
And just maybe there was a little self-preservation tied into my generosity--I'm the only one who lives within a thousand miles of BIL, so I was heading off any other family member coming up with "maybe he could just stay with you for a little while to save on rent."

Preventing that alone is worth the outlay
My friend has half joked about coming to live with us but it is out of the question. I respond with silence when she jokes about this, so as to not leave any doubt.
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Re: Friend on the verge of financial ruin, how to help?

Post by KlangFool »

neowiser wrote: Sun Sep 27, 2020 9:04 pm Very good input here, thank you. I’ve known this friend for 40 years and she is like a sister to me. I suspect if the situation were reversed she would offer to help me. Her daughter shares an apartment with a boyfriend, so moving out would be complicated.

neowiser,

It is not complicated. The daughter cannot afford the rent. She either moves out or the boyfriend pays her part of the rent.


Or else, the daughter will destroy the mother's health and finance.


KlangFool
Last edited by KlangFool on Mon Sep 28, 2020 10:01 am, edited 1 time in total.
KlangFool
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Re: Friend on the verge of financial ruin, how to help?

Post by KlangFool »

neowiser wrote: Mon Sep 28, 2020 9:56 am
I am a lifelong Bogleheader, even before I knew about Bogleheads, so none of the suggestions here strike me as harsh. Emotion has always been the bane of good financial decisions, which is why it is so difficult to reconcile the two.

neowiser,


You cannot help someone that does not know how to manage their own finance. By enabling, you are prolonging their mismanagement.


And, the bad habit is being passed to the daughter.


KlangFool
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