it’s a hand up or a handout, many families wouldn’t
be able to pay the bills or live as well as they do now
without extra cash from mom and dad, grandma or grandpa
or a kindly aunt or uncle.
1 in 4 Americans received some money in the previous
year to cover day-to-day expenses from someone who doesn’t
live with them, according to data from the Pew
Charitable Trusts’ Survey of American Family Finances
and the Panel Study of Income Dynamics at the University
of Michigan Institute for Social Research.
not talking about slipping someone an extra $10 or $20
here or there, either.
talking about giving someone $500 or more to cover a car
repair, surgery for a beloved dog, a student loan
payment or some other ginormous bill.
median dollar amount of assistance was $1,000, according
to Pew’s research, which was conducted in late 2014
with a total sample size of 7,845 people.
a fascinating glimpse at how personal balance sheets get
a boost from places other than paychecks and smart stock
picks. We’re talking about an under-explored area of
how a transfer of wealth among family and friends can
add to financial security.
Americans run into financial difficulty, their friends
and their family are there to help them," said
Diana Elliott, research manager for the Pew study.
survey, released earlier this month, showed that
households that experienced a material financial
hardship in the previous year were five times more
likely than those that did not to receive money from
family or friends. Maybe they missed a mortgage payment,
skipped paying a bill, avoided going to the doctor,
couldn’t afford to get a prescription filled or had a
credit card declined.
of this, of course, is any surprise to many grandmothers
or aunts who have been running family bailout programs
long before any of the big banks or automakers ran into
Barthlow remembers the time her older sister moved to
another state and needed money to repair her truck and
get her necessary state certifications for her health
I wrote her a check for $800," said Barthlow, a
didn’t think twice about it.
would I not take care of her?" Barthlow said.
all, her big sister had bailed Barthlow out when she
needed money after her divorce to cover her property
sisters paid each other back in full over time.
said she even pulled out her checkbook to cover a $1,500
bill for her niece at one point when her car was
impounded. But that didn’t turn out well.
niece paid back most of the money but not all of it.
Things got rather unpleasant when Barthlow said her
niece gave her a little too much attitude instead of
she said, "the Bank of Gabriella was officially
closed to her. No cash withdrawals."
said many families are happy to be able to help out
their adult children or other friends and relatives. It
can make them feel good to be able to use their
resources to get someone else out of a bad jam.
sometimes, relatives refuse to cut spending, trim back
or eliminate expensive unhealthy habits or frankly, even
go out and get a job.
maybe, you give the niece with a sob story $500 for her
rent and she shows up on Facebook bragging about a
brand-new python-embossed Michael Kors shoulder bag.
some point, you just need to slam on the brakes and say
families providing support to others can be coping with
their own headaches involving money. About 75 percent of
Hispanic households who gave help to others in their
network reported feeling burdened, according to the
do you know if you can afford to help out a friend or
family member without putting yourself in danger of a
said she spotted some helpful tips several years ago
that she regularly shares with families. Go through this
checklist first before giving any money to a loved one
your own retirement account fully funded?
you have enough money in an emergency savings fund to
cover your own bills for anywhere from three months to
all of your credit card bills paid in full each month?
you give or lend someone that money, can you completely
let go of it without any strings?
much as someone promises to pay you back, they might not
always do so, she warned. She said the issue with her
niece was very painful, not because of the money but
because of the harsh words.
changed the dynamic of our relationship," Barthlow
said, even though the girl’s mother ultimately paid
the rest of the debt for her daughter.
young families raising children need that extra safety
net provided by family or close friends. One in five
households making less than $40,000 a year received
money from friends and family in the past year — and
two-thirds of those people got financial help more than
one time. The amount of help for that income group often
was around $500.
it doesn’t necessarily mean you don’t have two
pennies to rub together, if you’re getting extra cash.
adults who received help for higher education or a home
purchase, most were raised in the wealthiest households.
The next generation can benefit in many cases from the
wealth that a family has built up. The amount that
households making $85,000 a year or more received was
for some seniors, many in the family only know too well
who to hit up for cash.
so-called silent generation — retirees born in the
mid-1920s to the early-1940s — were the most likely to
give or lend money in the past 12 months with 31 percent
in that group giving something. The median amount given
or lent was $2,000.
baby boomers were next on the list with 30 percent
helping out financially. The median amount given or lent
family members benefited from the generosity the most.
Millennials received the most money with 19 percent
reporting receiving money in the past 12 months.
doubt, it’s comforting to know that we can bank on our
families and friends when we really need a little extra
cash. But we all should realize, we really shouldn’t
play that Friends & Family ATM card too often.