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How to Help Others Financially Without Hurting Yourself

Most people would prefer to spend on their own family than on others.

Many would talk a good game during gatherings about the good investments they made, what they managed to buy, and the bump in salary they got from a recent career switch. If you try to borrow money from them, you will see their faces change.

Those far richer would rather be quieter because they do not wish too many to know their actual wealth. After all, if others know about it, many people will come to bug them. There can be a lot of reasons why they are reluctant to help, and the main one might be they are coming to terms with what they have and are not sure how much they can help without affecting their own family.

But for some who became financially independent, with wealth more than what they need, the second part of your life might feature using your wealth to be of meaningful help to the people you care about.

So how do we help others in a manner that makes sense?

I will provide some handles for you to think about in today’s article. Most of you would have picked up a couple of them quickly, but reviewing them in one sitting is always good to see if they all add up well.

1. Find out how helping others would potentially affect your goals

If you wish to voluntary help others, that is a financial goal.

Before embarking on this financial goal, it is good to figure out how high this goal ranks among everything your family wishes to achieve.

Chances are there are some other goals you would not want to compromise, such as your child’s education and leaving enough money for your retirement.

Figure out how high this goal ranks, and by helping others, would it compromise the other higher priority goals.

Here are some questions to ask if you are in a position to help:

  1. Are you in a sound position to give money?
  2. If you give, would your financial progress for certain milestones be hindered?
  3. Would financial support for your loved ones be one of your long-term goals?

You can help if it does not impact these high-priority goals. If they do impact the goals, and both of you are still willing to help, then at least you will go in with your eyes wide open.

2. Discuss with Your Spouse to Seek Consensus

Making money decisions without respecting your spouse will often lead to some sort of resentment and strain in relationships in the future.

Many of us would be gung-ho and say: “But this is my money, not my spouse’s portion of the money”.

Sometimes, your spouse is unhappy with you not because of the amount of money but your decision-making and your relationship with who you are trying to help.

Or it could be more than that.

Money is often the conduit to manifest relationship problems, which the couple may care less about.

Check-in with your spouse if you wish to help your parents or a good friend. If you have a history of making rash, fewer-quality decisions, then your spouse can act as a good sounding board to ensure you have made the right decision.

3. Figure out the actual financial help they need

Their needs might not be what you think.

Some people would tell you they need $XXX, but you should think independently about what kind of help they really need.

Often, there is no best or right way to help them.

Here are some questions to think about:

  1. What are the financial expectations on your side and his/her side?
  2. Is this going to be ongoing, long-term financial support or a one-time?
  3. Are there other family members that can help as well?
  4. Which aspect of their need will help them the most? (paying off the debt, or covering their living needs etc.)
  5. Is there a way to help without affecting your finances?

4. Frame financial help as gifting instead of loans

Often, you would be disappointed with the process of collecting the money back.

The collection part would often ruin relationships.

So based on experience, ask yourself if you are willing to part with the money as a gift and never see it again, even though you are loaning money to them.

If you are going to feel disappointed next time, you might as well visualize whether you would feel okay with the consequences today.

5. Create a Separate Financial Account for the Financial Help

If helping loved ones is your critical goal, it is best to separate the financial commitment through a physical bank or brokerage account.

Having clear separation will allow you to account for the amount of financial commitment and review your history of help.

If too much money is left, you might not have moved enough to fulfil your critical goal.

Some of you might want to invest the money if the money is really for long-term help. The asset allocation and the method of spending are different topics in themselves. However, the spending systems should not be too different from retirement math.

If you wish to pay for your family member’s rent partially, you might need a more prudent plan because there needs some consistency.

However, if financial assistance is the best way, a smaller but flexible cash flow provision method might be more applicable.

6. Create healthy boundaries in your financial aid process

You might not want your giving process to become a monster instead of your original altruistic goals.

Some may not understand or find that you are snobbish about your money, but you want to achieve a fine balance between helping and not being emotionally drained.

We do not want to give when we are not in a financially good position.

Make sure that they understand whether this is based on best effort, your own predicament and to what extent you can help.

7. Take time to reflect upon your help

I think we won’t get everything right at the very start.

Sometimes, we might realize we are trying to help more to boost our ego. We might also realize we are not in a good position to do that and struggle with financially helping.

It is for us to figure out if we have enough empathy for others, if in our care for others, we failed to care about ourselves as well, or if we achieve a good balance.

Like many aspects of our lives, we cannot tweak or recalibrate if we don’t think about it.


Many of us help our family members because it is ingrained into Asian cultures.

But you may struggle to come to terms with it, and I think it is normal to have that struggle.

Most of us are not financially secure or independent when we decide to help. Some are helping not out of their own free will.

Helping intentionally without compromising your other goals will benefit you if you have the means. For one, there is evidence that spending money helping others would make people happier.

There is always some sort of a silver lining because someone benefitted.

Let me know what you think.

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Monday 18th of July 2022

Point 4 is so true especially for amount greater than 4 figures. In my own experience, one disappeared untill now. Another one promised to pay back in another 12-18 months which i will not be too suprise if it got delayed again.

My biggest disappointment in these cases are seeing them rather spend discretionary than paying u back.


Monday 18th of July 2022

Sometimes i wonder whether only those who really got into real trouble have the courage to ask their friends despite the embarrasment.

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