Communication

How to Communicate with People Who Ask for Money

High-earning business people are often the target of money requests; professional athletes are no exception. It is public knowledge that professional athletes can make a lot of money, which many times encourages friends and family to feel entitled to some of it as well. The request may or may not seem legitimate to you and you may or may not be willing to give, so we will share our suggested process and tips for the scenarios below, but first we want to make some things clear:

  1. Giving money is rarely the best solution; the goal should be to help set them up for long-term success and self-sufficiency. Truly helping someone rarely equates to giving money. Giving money more often than not will enable an unhealthy habit, unsustainable lifestyle, or unhealthy life pattern. The best way to love someone is to truly help. Giving money is often more harmful than helpful.
  2. Someone’s failure to plan is not your emergency. If someone approaches you claiming they are going to lose their house or car tomorrow, do not feel the need to bend over backwards to help with this immediate need. Part of what they might be needing to learn is that they need to better track their finances so they can better assess when needs will arise.
  3. Involvement is often better than money.  Most of the time what people need is someone to help them get organized and brainstorm solutions, not cut them a check.  Each person is responsible to determine whether or not the financial contribution is going to help, not hurt.  A great way to determine if the contribution will help or hurt is determining the person’s history with receiving gifts to help through tough financial circumstances.  If the person needing help has a history of receiving help, then it might not be a good idea to continue that cycle and provide another financial gift.

Now onto our scenarios:

  1. You don’t want to give them money, but you want to help.
  2. You want to give them money, but are unsure if it would actually help.
  3. You don’t want to give them money and don’t feel you have the time/experience to be able to help.
  4. You want to give them money and don’t care about anything else.

You don’t want to give them money, but you want to help

or

You want to give them money, but are unsure if it would help

The process for both of these are essentially the same: gather the facts, brainstorm long-term solutions, and meeting the need. Giving someone money without addressing the underlying issues is just a band-aid and will hurt more than help.

Step 1: Gather the Facts

If someone asks you for money, ask this person to share their full financial picture (i.e. what they own, what they owe, where their money goes) with you. If you do not have the full context, then it is difficult for you to provide good counsel and understand whether giving them money would actually help them or not. This may seem intrusive and put them off, but they are the one asking for money, not you.

Example conversation:

Person: Can you give me $100 for food?

You: I really want to help, but I just want to make sure I’m helping you in the most effective way. This may seem intrusive, but I would want to see your full financial picture first. Would you be willing to set up some time to really break down what you currently own, what you owe, and where your money currently goes? That way we can determine what the most helpful course of action is.

*At this point, the person can either agree or get mad at you. Be sure to stand your ground, but don’t be condescending about it. Be sure to tell them you would love to help however you can, but you don’t believe giving money is the most helpful thing you can do.*

**Also be aware that they may try and pressure you by making statements such as, “I thought we were friends” or “If you were really my friend, this wouldn’t be an issue.” In situations like this, they are trying to manipulate you. Their accusation of disingenuous friendship is actually revealing that their feelings toward you are disingenuous, as it seems as though the friendship exists only as long as you give them what they want.**

Step 2: Brainstorm Long-term Solutions

Once the full financial picture has been reviewed, think through the various options to remedy the situation. Financially speaking, most of the time a person has three main options:   

1. Increase Income: Can they work overtime, get a new job, a second job, or start a side business? 

2. Sell Something: Do they have anything of value to sell (collectibles, a vehicle, furniture, etc.)?

3. Reduce expenses: Are there certain expenses that can be reduced? 

Note: Oftentimes someone wants their financial situation to change without changing their lifestyle, but a person’s situation rarely changes without changes to their lifestyle.  Of the three options listed above, it is important to keep in mind that increasing income is often out of a person’s control and selling stuff is not sustainable long-­term.  Therefore, the best way for someone to change their lifestyle is to reduce their expenses.  Experience has proven that when it comes to reducing expenses, the two areas to examine first are housing and transportation.  A person can find ways to trim $5 here or $20 there by looking at other expenses.  However, the best way to reduce expenses by hundreds, if not thousands, of dollars is for a person to change where they live and what they drive.

Step 3: Meeting the Need

If you have gone through Step 1 & Step 2 and they are still experiencing financial hardship and ask for money, here are two steps that should be followed:

1. Assess need: Determine if there is a need for financial assistance. Our needs are food, shelter, and clothing.  

2. Determine solution: If there is a need, the priorities should be as follows: (1) family, (2) immediate friends (i.e. community), (3) church and local aid organizations. First, determine if this person’s family can help them with this financial hardship. If the family cannot help, determine if anyone in their community can help. Finally, if neither their family nor their community can help, have them present the request to their church and local aid organizations.

If after this, you want to give money, clearly communicate the expectations of what the money will be spent on and come up with a plan and long-term solution that will make this way of helping no longer needed in the future.

*If during any of these steps, you want some guidance or a financial professional to join this process, we have a couple different CFP® professionals we can refer you to who could be of assistance. Contact us.

You don’t want to give them money and you don’t feel you have the time/experience to be able to help

It may be uncomfortable to reject someone’s request, especially if you have the money to give, but the money is under your control and you have the option to do with it what you want. If you want to help them, but don’t feel equipped/able to given your schedule or lack of experience in personal finance, feel free to refer them to someone who can: https://studentloanhero.com/featured/places-to-find-free-financial-help/.

Also, always feel free to contact us as we have a couple different CFP® professionals we can refer you to who could be of assistance and could work with both of you together, if you would like.

You want to give them money and don’t care about anything else

This is entirely your choice, but we want to give you some potential questions, as well as warn you of some things:

  1. Do you want to know what they would use it for? If yes, find out and make sure you are okay with that before giving.
  2. Do they want to borrow it to pay back later or do they not want to pay you back? When would they pay it back?
  3. If they are borrowing it and you want to be paid back, you may want to get the terms in writing. 
  4. Be prepared for them to not pay you back.
  5. Consider setting a limit for each person in your life.*
  6. Giving them money may be fueling an addiction.*

*These last 2 are so crucial that we expanded on them below

Consider setting a limit for each person in your life

You may want to give money to your relatives or best friends, but be aware of how much you are actually giving them. There are numerous athletes who landed a big contract and lost it all fairly quickly (just search on the internet “rich athletes broke now” and you will find plenty of examples). We recommend creating a budget, setting monthly/annual limits on how much you are going to give to each individual in your life, and sticking to it.

If you want to run your budget by us for our thoughts and recommendations, contact us.

Giving them money may be fueling an addiction

To be clear, money is not always helpful and is usually not the best solution. Money can be useful and necessary, but it can also be extremely destructive. If a drug addict is asking for money, giving them money is just digging them into a deeper hole of addiction. That person has proven they are not currently able to be financially responsible and what they need is support and the environment to be able to end their addiction. If this is the case, and giving them money would only fuel a bad habit or addiction (unwilling to work, shopping, gambling, drugs, alcohol, etc.), here is a way to respond to their request:

“This is hard for me to say, but I say it because I care about you: I don’t think giving you money will be helpful and I think you should find help for your addiction to ___________. I will be there for you every step of the way, but I don’t want to enable and encourage your addiction by helping you feed it.”

They may be very mad at you or deny that they are addicted, but at some point, they will realize you were right. When this time comes, they will be thankful that you were real with them and your friendship will mean so much more to them because of that.

If they are willing to seek help, the Substance Abuse and Mental Health Services Administration (SAMHSA) is a good resource who can connect them with local help: https://www.samhsa.gov/find-help/national-helpline.
A helpful resource for veterans: https://journeypure.com/locations/military-program/.

Summary

When dealing with someone who asks for money, always be loving, honest, and humble. You can’t control how they react to your response, but you can do your best to actually help them, (which probably won’t involve giving them money).

Thank you for reading and if you have any questions, always feel free to contact us.

2 comments

  1. Tresha Smith

    Hello!

    I’d like to talk to someone about the resources listed on your website.

    Thanks so much!

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