There comes a time when you’re right on track with your budget, with no extra to spare and then suddenly you have your relative calling you to bail him or her from a financial mess. It’s good if you have savings where you can pull the resource to help but for somebody like me who’s just starting out to figure the ins and outs of budgeting, it’s a situation where you are left scratching your head.
If you really have no way of solving this as you have your own financial issues, it helps to say no and explain your situation. Don’t just ignore your relative like not responding to his calls or text messages. He would understand your situation when you explain rather than just saying no for an answer. Caveat is you have to be truthful. Saying no when you actually have the means to help is not cool as he will soon find out that you are on spending free when he’s asking for your help.
But on cases when you just can’t say no to a relative in need, much more if it’s a family, you have to find a way to help. Of course, your budget is now ruined. You have no extra to spare and you now need to figure out how to hell are you going to squeeze your budget just to accommodate a family’s contingency.
If you are the type of person who doesn’t say no to a relative, you have to plan this ahead of time. Create a budget category, say contingency expense where you allocate a certain amount even if you don’t need it yet. It’s like a savings but will be spent sometime in the future. The contingency expense may even be used when there is an unexpected expense in your own family. The benefit of this is your savings is not touched and won’t make a dent in your overall budgeting.
I had a situation once when I was already on track with my budget and then my younger sibling called to borrow money to pay for her apartment’s rent. She said she lost her ATM and she’s having hard time getting a new one and the rent is already due and her landlady was already bugging her and other series of unfortunate events etc etc. I don’t have any savings yet as I made it a point to pay my high interest debts first before saving. [Because there’s no use of setting aside money for saving when you can use the money instead to offset your high interest debt]. I had just finished budgeting my cash on hand and just enough until the next pay day.
In that case, I had no choice but to check my bills if I can still delay the payment. My electric bill is due in a few days but I can still delay it for two weeks before I get a notice of disconnection. Disappointing as it may be, I had to delay the payment to help our younger sister. So I sent her the money and texted her how I came up with the money. I usually don’t expect my siblings to pay in return but in this case, she has to learn that anything borrowed should be returned. I told her that the money was supposed to be for the payment of our electric bill. If she already has her money, she needs to pay it back or we will be disconnected. She replied back saying her thanks and promised to pay in two weeks time. [ I just hope she would.]
Lesson here is I need to create the contingency category in my budget to avoid similar events in the future. And whatever amount I can stash to that category, that’s the limit of the amount I can lend to my siblings or relatives.
kuripotmode 