My husband and I are debt-free, and we have $100,000 saved. We like to give, rather than loan, money to family members if they’re having financial problems. Can you give us some advice on how to establish giving guidelines?
First, you can’t give to a level that it starts to make you worry about your future. Your first obligation is to your own household. Once that’s done, you can help family members and your immediate community as best you can without weakening yourself.
The big thing in this scenario, I think, is to make sure you’re helping someone get back on their feet. You’re not helping when you give a drunk a drink, so you have to ask yourself if your generosity is really helping them or if you’re simply enabling irresponsible behavior.
I’m not saying this because I’m a control freak. I’m saying it because I don’t believe in investing God’s money unless I see a positive return on investment. In human terms, that means helping someone get out of a mess they’re in, while at the time seeing that they are working to make sure they never end up back there again. If they’re buying cigarettes or lottery tickets with the money, then you’re not helping them.
Taking this stance isn’t mean, and it doesn’t indicate that you don’t love your family. It means you’re loving them well and want what’s best for them.
* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.