My sister sucks at money management. Like really terrible.
I don’t understand how one girl can spend $600 at a grocery store in one month, justify having $300 set aside for a CAMPING trip with friends (who needs $300 to camp?!), literally buy a new purse at least once a month (justify this because she ”only spends $50 a month on clothes at a local thrift store”). ALL while being $1000 in overdraft, a maxed out credit card, line of credit and student lines of credit to pay for. Oh, and while she loves her career she doesn’t make a whole lot of money. This is a situation where her career makes her truly happy, shes amazing at it and it’s rewarding so lack of money is worth it, if she can manage.
We all have our money issues and reasons why we ended up in the financial situations we have, I’m no saint. I try to explain to her that she won’t need $300 to go camping for two nights and suggest she, throw $200 on debt but no, she might need that money for camping??? She had enough smarts to take my advice a few years ago and suggest, when she got a raise, to increase her provincial loan payment and pay it off in two years; yet while in a time of financial hardship during a relationship fallout, instead of calling to temporarily lower her loan payments down to the minimum (a $100/month difference), she lived off credit to make up for temporary lost income…this made sense to her.
She does not understand that paying off a credit card with a line of credit isn’t actually paying anything off. She’s an educated person but continues to money, she justifies the weirdest things. I also encouraged her to pay closer attention to her credit score but she couldn’t be bothered.
I have budgeted her many times and she’s not upheld it. She’s at the point now of needing serious hand-slapping-help before she really ends up over her head, she’s very close. I love my sister and don’t want to see her suffer financially. She has proven to me that she has no financial maturity and I feel like, as the big sister, I need to step in and take over her finances for a while to get her back on track.
I’m going to talk to her this next week, but I’m thinking about taking control and putting her on a cash budget. I’m going to play a Gail Vaz-Oxlade role and take away all her debt and credit cards (and maybe even cure them in a jelly mold). We live close enough that, God forbid, there was an emergency and she needed to get to a bank, I could give them back (with discretion, of course).
I think once she learns that she can live on cash without dying from starvation she’ll be able to takeover her finances again but for the in-term she needs a good sisterly kick in the ass.
Has anyone ever done anything like this for friends/family? What was the outcome? Any advice?