3 Ways to Help Family Members in Financial Trouble
The world around us can be very unforgiving at times. Sometimes fortunes can change in an instant, such as when fires or flooding exacerbated by climate change sweep through the land. In other moments, dangerous seasonal weather such as tornadoes and hurricanes can ravage the local landscape and wipe out complete neighborhoods and towns. A major global event, such as the sudden arrival of a pandemic, can result in the closure of entire segments of the job market.
On top of all these issues, many can become impoverished when they have to suddenly face outrageous medical costs or adjust to soaring home rental prices. Even major hikes in gas prices or food costs can put many people’s budgets at risk. These real-world scenarios often hit close to home, affecting members of your own family. If someone you love is experiencing a hard time financially, here are some ways you can help them, shared from a contributor.
Selling Your Term Life Insurance Policy
If you need to come up with significant cash to help a family member facing catastrophic medical costs or struggling to get back on their feet, you could consider selling your term life insurance policy. This type of coverage is designed to pay a death benefit to the owner of the policy if the individual who is insured passes away during the coverage timeframe. If you no longer need this insurance and wish to sell the policy, one of the first things you’ll want to find out is whether your insurance is convertible. This option would allow you to change the policy from term to whole or permanent life coverage, thus making it generally available for sale under a life settlement. There are also specialized situations where you can sell your term policy. You can then use the needed funds you receive to help your family member.
Co-Sign on a Loan or Offer a Cash Down Payment
Another way you can help an individual in your family is to co-sign on a loan they are applying for. If someone is going through financial hardship, their credit alone is not enough for them to qualify for a loan they might need. Suppose that your family member finds themselves without a job because they don’t have reliable transportation. If you work with them and the car dealer, you could co-sign on the note, and that would help them qualify for the car. Alternatively, you could also offer to provide the cash needed for a substantial down payment on the vehicle. This would make the transaction far less risky for the bank or credit union.
Help Them Get Set Up in Affordable Housing
For many people, including family members, the high cost of rental housing cripples the budget each month. One of the most valuable money saving tips for families, and the current rule of thumb is that you should only spend 30% of your gross income each month on housing and utilities. Unfortunately, in many areas of the country this is not possible due to out-of-control hikes in rental property costs. Since housing is likely the biggest expense of a family member, it’s important to help them address this recurring problem. One of the things you can do is to work with the individual and help them apply for and qualify for subsidized housing. There are different programs available. In some areas away from big cities there are multiple options available and your loved one will only have to pay 30% of their income for a quality apartment in a nice complex.