Key questions before helping others

Are you aware of the dreaded 4 D's of finance? You should be. They can hit you and your family or any time of your life. If you have not heard reference to the 4 D's are:

- Death
- Divorce
- Disease or Disability
- The downsizing or Disqualification

Death (without adequate insurance coverage) can be financially devastating, but so can divorce. I have always recommended that until a couple is divorced financially, are not divorced. Illness or disability, of course, can cause loss of income and exceptional medical expenses and downsizing or disqualification means that the job no longer exists. As an adviser time for pre bankruptcy, I have seen these "dreaded D's" over and over again. It is of afflictions that can attack anyone at any time. You could also add another description to the dreaded D - "Devastation", because that is exactly what the dreaded D's create.

Take Care of Yourself First

But there is a fifth terrible disease that does not begin with a "D" at all. It's called "not taking care of your self first." I can not tell you how many people recommended that I got in over their head because they were helping someone else who has had one of the 4 "D's". Either that or they were taking care of someone who should be responsible enough to take care of themselves.

Family members pull our heart strings and so can often lead us in where angels fear to tread. Benjamin Franklin strongly suggested that we should never do something for another that you should do for themselves. Years ago I wrote an article that asks only what we owe to our children. The conclusion was that we had to our children is a responsible attitude.

A "helping hand" so often becomes a crutch to an employee and the person with a good heart is so vulnerable to being sucked dry. And the worst thing is that the person with a good heart does not listen to advice until it's too late. If you know someone who is thinking of helping someone, the best thing to do is to suggest that at least talk to a financial adviser before or pastoral. E 'can help the heart may be able to view options for developing long-term responsible approach, but normally the impending doom the beloved shadow of such wisdom usually.

Key Questions

If you or someone you know is struggling with this problem, the individual must first ask the key question: "Can I afford?" Do not fool yourself to think this is a temporary loan. If the individual repays the loan, the great, but it is likely that when you give your money away, is gone forever and we must assume that most will not see it. But also you should not give money if not from excess funds. Never give away the money budgeted base or money from a savings or investment needed. This includes simply co-sign a loan. You must be prepared to assume the full amount.

The second key question is: "What is the background of an individual?" The potential borrower is hard work and frugal is a very different scenario from the person who is always being fired and is overdue bills each month. It's like a lender must show the person asking for money just as a potential creditor makes, even though you know you can never see the money. A good question may be, why not ask a regular provider, in the first place?

A third question can be easily, "There are other people who will be affected by your decision?" For example, providing assistance to an employee very responsible, but that has very irresponsible siblings could be an error in the decision making process. What will be the result of that action? Certainly do not want your good intentions backfire.

A question may be off if you do not want to attach any condition. This is a loan or a gift? What is the repayment schedule? What happens if the loan is not repaid? There is a difference between what you know in your heart what it wants and will do, and what is being discussed in a transaction. They should be identical, but real life does not work that way.

The terror four D's can not be avoided in most cases. They are part of life. But do not take care of ourselves first is simply the wrong decision and useless most of the time. Use the key questions above to avoid complicating a bad situation even more ....