My Brothers First Financial Meltdown

You can check out the second part of this article here

Back in May this year, my older brother came to me with a problem. He asked me to loan him money because he was getting behind on his bills and didn’t think he could make his payments that month. He wanted to borrow the entire amount for one months bills, around $500.

I do my best to prepare for emergencies so I did have the money and could have lent it to him but I didn’t feel right about it. My brother and I butt heads and for the longest time I couldn’t even talk to him because I knew every time I did, I would get upset about bad financial choices he was making and the fact that he wouldn’t take anyone’s advice.

This time was a bit different though. I knew if he was coming to me asking for help, he was pretty much at rock bottom. So instead of handing him cash, I told him to come up to my place and we would go over his finances together and I would help him figure out what to do. If things came down to it and he really didn’t have any way to get back on track, I would lend him the money.

So we sat down and spent about four hours going over his finances. I’m sure each of us have been at ground zero with our finances, where we are looking through everything for the first time and realizing how much money we are wasting on things. For my brother, this was the very first time he had done this and it was a real eyeopener for him. I could tell that things changed for him that night.

Not only did we go over everything and discover plenty of places he could cut costs and get back some of the money he had spent, I made a very specific and detailed set of instructions for him to complete in order for him to dodge the bullet that was currently pressing in on him and set himself up to save in the future. I’m more than happy to help family out, but these instructions would set him up to create habits for the future so that he wouldn’t have to come asking for help again.

He left that night seemingly still nervous about his predicament but he seemed excited about making changes. Again, I was reminded of the first time I realized I was flushing money away and decided to make changes in my own life. It’s a good sort of nervousness and excitement about a new adventure about to unfold.

I followed up with him a couple times over the next week to make sure things were going well for him and to answer any questions he had. He was able to follow the instructions I gave him which consisted of getting fees waived from his bank, switching banks to one that was more customer-centric, returning things he purchased without doing any price research which he overpaid for by *huge* percentages, and canceling subscriptions he had recently signed up.

By doing all of these things, this emergency of his was diffused and he was able to make all his payments.

Fast-forward to now. I haven’t heard anything from him about his finances since June. I stopped keeping tabs on him because it is his responsibility to get his finances in order, and I was just helping him out temporarily.

Last week, I got an email from him asking for more assistance…

Tomorrow, I will go into more detail on his current situation but wanted to open things up to you all for input.

Without hearing any more on his current situation, what would you do if you were in my shoes?

You can check out the second part of this article here

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16 People have left comments on this post



» AmandaNo Gravatar said: { Nov 8, 2010 - 04:11:07 }

I think you made a good decision to help him with his finances rather than loan him the money. After all, the quote does go, “if you give a man a fish, you feed him for a day, but if you teach a man to fish, he can feed himself for a lifetime.” I know it is so annoying when people ask for advice but don’t take it, but since forgiveness is divine and he is family, I would help him again if I were you. Hopefully he’ll learn to fish right this time!! 🙂

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» Jesse MichelsenNo Gravatar said: { Nov 8, 2010 - 05:11:05 }

@Amanda

While I write PF day in and day out, I’m not all that approachable if I know you, you know me, and both of us know you should be doing things different with your money so the fact that he came to me, not once, but twice is actually pretty cool. I’m not annoyed by it at all I just wish he had come to me or taken others advice sooner. You’ll have to check out tomorrows post, there is more to the story than I’m letting on 🙂

BTW, haven’t seen ya around here in a while, thanks for stopping by again!

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» SquirrelersNo Gravatar said: { Nov 8, 2010 - 05:11:52 }

First off, I congratulate you on helping out your brother the way you did. Sure, you helped him out when you knew he was in what seems (based on how you explained it) a tight situation. What especially like is that you spent the time with him to go over his finances, and help teach him how to make better decisions. That’s really where the biggest long-term help might be.

Now, he’s back. Hmmmm. My initial reaction is to talk to him and find out exactly what he has done since June. Did he listen to your advice? Did he make some new bad decisions? Did some additional misfortune come his way? My thoughts are to hold him accountable for any poor decisions made, and if you help him again, make sure he checks in with you to keep him on track. Of course, he’s your brother – older at that – so you know best.

But that’s my biggest takeaway – accountablity going forward if any help is given. It’s that accountability and good decision making that will help the most in the long run. I hope this is a fair comment, as I’m just going by what I have read here. Maybe if I read differently when more details are provided, I might see it differently:)

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» Jesse MichelsenNo Gravatar said: { Nov 8, 2010 - 06:11:57 }

@Squirrelmeister

I don’t believe in taking handouts or giving them ya know, it just lacks that accountability you’re talking about.

And some excellent, excellent points here…like I allude to above, there is more to the story than I let on and you, good sir, may have just jumped the gun but come back tomorrow and see what exactly I found when inquiring further about the present trouble.

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» everyday tipsNo Gravatar said: { Nov 8, 2010 - 09:11:08 }

Darn it! I was so hopeful that your brother had followed your plan and gotten back on his feet. However, it is hard to change a lifetime of accumulated bad habits I guess, so I should have known better.

You have done all the right things, now it is time for him to do the right thing.

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Jesse MichelsenNo Gravatar Reply:

ET, I’m not quite letting on to what happens so don’t lose faith just yet 😉

I agree though, it takes a ton of effort to ditch long-standing bad habits.

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» JackieNo Gravatar said: { Nov 9, 2010 - 06:11:10 }

You don’t say what type of assistance he is asking for — hopefully it’s more advice and not cash.

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Jesse MichelsenNo Gravatar Reply:

Jackie, I think he can always use a little of both, but it’s cash again. Check out the second post for the details.

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» Kevin @ Thousandaire.comNo Gravatar said: { Nov 9, 2010 - 07:11:39 }

A lot of times people don’t learn until they hit rock bottom. However, some people hit rock bottom and never recover.

If it were me, I’d offer advice again but no money and hope he figures it out. Giving him money will only teach him that he can come to you when he needs money; it won’t teach him to be responsible with his own money.

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Jesse MichelsenNo Gravatar Reply:

I agree completely Kevin. I have a little of both running in the family, and I hoped my brother, who I’m closer with than the other person in mind, would be the one to bounce back after hitting bottom. He did to some degree and I’m giving the money this time around because I didn’t give any last time but he did take the advice and learned from it. (detailed in my second post about his situation)

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» MicheleNo Gravatar said: { Nov 9, 2010 - 12:11:13 }

I have found myself in similar situations all the time. Friends and family know I am good with managing money and can help them, if they ask. I try very hard to not offer unsolicited advice, but that’s difficult to do when someone mentions or complains about money problems constantly.

Each time I sit down with someone to go over their finances the outcome is different. I find myself frustrated at the ones who ask for help and then don’t take the advice, make excuses for everything and in the end resist making any changes to better their situation.

I will look forward to tomorrow’s post.

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Jesse MichelsenNo Gravatar Reply:

Michele, over the years I’ve been somewhat cured of giving unsolicited advice, it just adds too much stress and disappointment to my life. It seems like each and every time I do give unsolicited advice, it ends up just hurting the relationship with whoever wasn’t asking. But when someone comes asking, they won’t be able to stop the flow 😉 solicited once, solicited forever!

It’s really hard to watch as someone lets things slip away when they know exactly how to change the situation thanks to the help of a friend, but at some point, all you can do is watch and let people make their own decisions. Thanks for your great input on this topic!

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» Investor JunkieNo Gravatar said: { Nov 9, 2010 - 01:11:31 }

Sounds sort of like my brother,except more legal issues are involved.

http://investorjunkie.com/4353/actions-consequences/

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Jesse MichelsenNo Gravatar Reply:

IJ, I agree. It’s funny how both of our brothers ran into problems around the same time. I just hope my brother’s problems don’t escalate to the level of yours because I’m not sure if I would be as strong as your are when dealing with the situation.

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» EvanNo Gravatar said: { Nov 9, 2010 - 03:11:39 }

I didn’t read part 2 yet…going over there now, but I think it is awesome you were able to help him out. I have had to help out most of my family with legal stuff (nothing serious thankfully) and it always feels good when they listen and ANNOYING when they don’t.

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Jesse MichelsenNo Gravatar Reply:

Evan, I’m really glad that he listened. I’ve given him advice for years that bounces off, even when he asked for it in the first place! It was a humbling experience for me as well because I had completely written him off as never going to listen to me, and I realized that night that people really can change and I should be more trusting and patient.

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