One of the reasons that many of us are being held back financially is our proclivity for helping others. An ING Foundation Survey conducted a few years ago found that more than half of the 1,000 Black women surveyed had loaned $500 or more to friends or family in the year preceding the study and one-third had loaned $1,000 or more.
Lending money to family members, friends and boyfriends may seem like the Good Samaritan thing to do, but it can keep you underwater for far longer than it should. Is there anything wrong with helping someone out of a temporary bind? Absolutely not. Becoming their personal ATM so much so that the cash you dole out has its own line item on their (fictitious) monthly budget as income? Not cool.
Consistently lending money extends the time it takes you to establish your emergency fund and ensures that you’ll be paying off your credit card balance and the increasing interest longer. Forty seven percent of the women surveyed by the ING Foundation admitted that their giving made it difficult for them to live the lifestyle they desired. This practice not only hurts the giver, but it also hurts the receiver. You become an enabler and crutch for that person (or persons). Rather than changing their habits or looking for ways to supplement their income, they remain unmotivated because you’re always there to bail them out.
Learn to say no and change the financial picture for both of you. There is no need to elaborate on why you can’t help them out this time. They don’t need to know that you have rent to pay on the 1st or that your electricity bill for the month is double last month’s. No is a full sentence.