It can be hard saying no. As hard as it is to deny ourselves a want today, it can be even harder to deny someone else who wants or needs our financial help. Saying no is a hard thing to do. Unfortunately, saying “no” is often essential to ensuring our financial security.
In her article “How to Stop Being the Family ATM and Learn to Say ‘No’” published in USA Today, Liz Wetson defined financial enabling as “giving money in ways that keep the recipients from taking responsibility and solving their own problems. It may include providing financial support to an able-bodied person who refuses to work, bailing a chronic debtor out of another financial jam or serving as a de facto emergency fund for someone who refuses to save”.
Sometimes that person is an adult child, a romantic partner or even a friend. While no one likes to see someone you love struggling, being their enabler can put your own financial security and future independence at risk. Financially helping adult children is becoming an alarming trend. In fact, a 2019 survey from Bankrate found that 50% of those surveyed say they have sacrificed or are sacrificing their own retirement savings in order to help their adult children financially. Given the financial challenges women face as we look to achieve a lifetime of financial independence – the fact that we typically live longer, experience higher healthcare costs and will most likely find ourselves single in retirement, being a generous enabler, giving away too much money today can put you at serious risk down the road.
If you are caught in a situation where you are a generous enabler, or you are feeling pressure to become one, I like the three questions the USA Today article suggests you ask yourself as a way to limit your involvement:
- Will This Money Actually Help? Maybe this truly is a special circumstance that is one-off and you can help this person you care for. But if this is a chronic problem like over-spending or they are effectively choosing not to work, this money may not actually help. Many times money doesn’t solve money problems.
- Is There a Better Way to Help? Maybe you can offer your time instead of money. For instance, helping with some childcare while the person works and gets back on their feet. Or help them with their resume or find them a mentor to help improve their career prospects. Be careful handing over money. Perhaps you choose to help with a specific expense, like rent for a specific period of time or even pay for financial counseling. Regardless of how you help (if you choose to help) it must come with a deadline – not just a deadline in your own mind, but a firm deadline you make known in no uncertain terms (and you must stick to it!)
- How can you make this decision stick? Unfortunately, desperate people may do desperate things and when it comes to being “cut-off”, they often times put pressure on those who have been helping them. This pressure can be through guilt, threats like moving away with the grandkids, or even verbal abuse and physical threats. If you are worried about your safety, contact law enforcement. Others may need to do things like change passwords or remove access from financial accounts. Many times, blaming your financial advisor or accountant can do the trick. Saying something like “As much as I would like to help, my advisor says I have reached the limit of what I can afford. Giving you more money just isn’t possible.”
Don’t be a generous enabler. While saying “no” can be hard in the short term, many times it is true that you are doing it for that person’s own long term good. We all need to work and learn to become self-sufficient.