By Teri Williams
During Financial Literacy Month let’s discuss a taboo subject. We all have family members who did not get the money memo. What do you do when your family is “the problem?”
Here are five money solutions to achieve better financial well-being for you and your family.
First, name the problem. You can’t fix something if you don’t admit it’s broken. Having a conversation to admit there’s a problem — with yourself and/or family members — will put you on a path to finding solutions.
This admission does not have to be harsh or uncaring. In fact, it can be argued that allowing a family member to continue down the path of poor financial management is uncaring.
Most of us were not raised in a home where money was openly discussed. Financial literacy was not part of our dinner conversations. By naming the problem, you can open the door for an important family discussion about money.
Second, save yourself first. You know the drill on an airplane. Put your oxygen mask on first before you help anyone else, including your babies. Why? Because you can’t help anyone if you can’t breathe.
The same strategy is needed for finances. Get your financial house in order first, so that you are in a better position to help your family.
Now let’s be honest. Most of us are “fronting” to our family or — for whatever reason — they think we have more than we actually do. And we may have more than them, just not much more. So how do you save yourself first?
You don’t have to explain your financial condition in detail, or give a reason that will blow your cover. You just can’t help until you can breathe.
Third, contain the problem. One of the shortest, but most difficult, words in the English language is “No!”
We love our family and want to do whatever we can to help them. Well sometimes saying no is helpful. If we bail them out every time they overspend, they have no incentive to live within a budget.
Yes, there are unexpected emergencies when financial assistance is needed and helpful. However, if emergencies are happening regularly, there is something wrong. Sometimes you must “Just say no.”
Fourth, teach them how to fish. Most financial woes are caused by insufficient income, along with lack of financial literacy. According to the Federal Reserve Bank of Cleveland, the difference between Black and white wealth is largely due to income disparities.
Unfortunately, lower income means you have less “wiggle room” to manage your money. A flat tire or loss of a job could set you way back financially. This is why financial literacy and savings are so important.
Wealthy people know that automatic savings are the only way to save. If your paycheck goes into your pocket you’re more likely to spend it. So teach your family members how to set up an automatic savings plan to create a “rainy day fund.”
This could be a “keep the change” program that automatically rounds up their purchases and places their change in a savings account, or it could mean setting up a direct deposit from their paycheck into a savings account (and lets them get paid two days earlier). Before they know it, they will be able to tap their emergency savings rather than asking you for money. So, in other words, instead of giving them a fish (i.e. your own hard-earned money), teach them how to fish, or how to save.
On the income front, sometimes family members get stuck in the cycle of unemployment because we’re the last hired and first fired. They may need job referrals to help them secure a better-paying job or a job that is a better fit, but they might not know how to ask for help.
Don’t give up on them. Just keep the door open so when they’re ready, you can refer them (or even push them) to friends and family who can help them find a better, longer-term job.
Fifth, build a “good with money” family mindset. Being good with money is a mindset. We must always be on the lookout for new ways to make more money or save more money.
Given that most of us did not come from families that talk about money, we must find new ways to create a “good with money” family mindset. And let’s face it, our family does not always want to listen to us, especially if we’re the baby in the family, or worse, if they think we’re stingy or selfish.
Fortunately, there are some great podcasts and even TV shows that talk about money in an entertaining way. Recommend that family members check out top financial influencers, such as Tiffany “The Budgetnista” Aliche, Earn Your Leisure or the OneUnited Bank “OneTransaction” podcast.
To be clear, money combined with family can be messy. Typically, there are many years of trauma and childhood wounds that are behind our money issues. The problem is not just financial, it’s emotional. However, if you follow at least three out of the five solutions above, you and your family will rise up and experience better financial well being.
Teri Williams is the president and chief operating officer of One United Bank, the largest Black-owned bank in the United States.
A flat tire or loss of a job could set you way back financially. This is why financial literacy and savings are so important.