What do you do when a family needs financial help?


Quick Answer

When a family needs financial help, options to provide assistance include giving a gift of cash, making a personal loan or co-signing on a bank loan, hiring a member of the family, or prepaying some of the family's bills. Non-monetary help one can provide to a family in need of financial assistance includes helping to develop a feasible budget and connecting the family to others who can provide help.

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What do you do when a family needs financial help?
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Full Answer

Some people are able and willing to provide direct cash assistance when a family needs financial help, while others prefer to give gift cards to help direct any expenditures. For instance, one might give a gift card for a supermarket to make sure parents can feed their children. When giving a financial gift, it is important to make it clear that the money is a gift rather than a loan.

If making or co-signing a loan for a family member in crisis, the person lending the money should insist on written terms for the loan, including the interest rate, the due date and any recourse the lender has if the borrower does not pay as scheduled. If co-signing a bank loan, the co-signer should be aware of the potential effect on his own credit rating if the borrower defaults.

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