When people we care about are struggling financially they often turn to their friends or family members for help. Sometimes unexpected things like a health scare or unemployment happen, and people need help with their finances. Keep reading below to see some of the best ways you can support a friend or family member. 

Cosign a Loan

If you’re willing to co-sign a loan or line of credit, this can be a huge help for your friend or family member. But you should be aware of the potential consequences. You are legally responsible for making payments now, and the banks or lenders can take action against you for missed payments. 

So it’s important you have a good grasp of your own credit and financial standing before agreeing to cosign a loan. It’s a good idea to first ask your friend or family member for a copy of their credit report and a monthly budget. 

Personal Loan

This can be a good way to help out your friend or family member, but make sure you both understand the agreement. Write out the personal loan contract in full and have each of you sign it. 

Include every last detail, such as the total amount of the loan, whether you will be sending it all at once, or over a period of time. Also write down any interest rate you’re going to charge, the due date for each repayment, and any actions you can take if your friend or family member does not pay you back. 

Make A Budget 

It’s a good idea to sit down with them and create an in-depth budget. Before you go spending or risking some of your own money to help out, sometimes people just need to be better organized. Mint is a great site to help you with budgeting.

Another tip to go through how you budget your own finances first. Maybe you can find some ways to save money in little ways, like at the grocery or department store. 

Job Hunting

It’s possible your own financial situation stops you from lending money directly to your friend or family member. If your job has any hiring opportunities it may be helpful to put in a good word for the person in need. 

Find out their employment history first to see what they have experience in. If you can’t help them by getting an interview where you work, maybe you have other friends that can. 

Sometimes it’s better to help them get a long-term solution to their financial issues. Getting steady employment will definitely help them in the big picture. 

Be Smart About Being Helpful

We always want to help our friends and family however we can. But you also have to be careful. If you’re spending too much of your own money helping this person, you might find yourself in a tricky situation. Do the best you can to help, but make sure that you have enough money to cover your own needs.