Home > Business > My husband’s sister and brother-in-law declared bankruptcy. The family helped them out — but they still spend, spend, spend

My husband’s sister and brother-in-law declared bankruptcy. The family helped them out — but they still spend, spend, spend

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My husband has a large family, and his siblings have varying levels of financial security. One of his sisters is married with teenage children, and though her husband had a low-six-figure job, they have had difficulty keeping up with bills over the years.  

Members of the family have given them a substantial amount of money and/or paid for their children’s school or other expenses. Then her husband — who is in his 60s and not in the best of health — lost his job, and things got worse. 

They had absolutely nothing saved and were already behind on their bills. They filed for Chapter 7 bankruptcy and were able to keep their family home. She is now employed and her husband is employed again, albeit at a lower salary than before their bankruptcy.  

They received about $20,000 from an inheritance that should have helped them catch up, but they still have trouble making ends meet at times. I am happy that we and other members of the family were able to help them out when they were in need, and I don’t have any expectation that we will ever be paid back. 


‘She and her family don’t appear to make any real sacrifices or change their spending habits.’

The problem I have is she and her family don’t appear to make any real sacrifices or change their spending habits, and — although I don’t want them to be out on the street — I don’t want us or other family members to have to keep giving them money. 

If they don’t change their habits and have no savings or plan for retirement, then I have no doubt that at some point it will fall back on us to support them again. My husband and other family members have tried to talk to them about their finances, but they don’t seem to listen or just don’t get it. 

At this point, they would say they are fine — but that’s until something happens, such as an unexpected large expense, one of them losing their job or getting injured or, even worse, one of them passing away. 

What can we do?

Sister-in-Law

Dear Sister-in-Law,

Three little words: No. More. Bailouts.

You and your husband can make a joint decision not to agree to more financial assistance. If they know it’s there waiting for them, they will be more tempted to spend, spend, spend. If they know you’re serious and you have made a stance on this as a family, they will be on notice.

You could — as a family and as a parting gesture — offer to pay for a series of sessions with a financial adviser or financial therapist. If they are not saving money for their retirement and/or for a rainy day, how are they going to make ends meet? Relationships are not ATMs.

Some people spend their way into a lifestyle to which they would like to become accustomed, but the truth is they don’t have the money to become accustomed to it for very long. No amount of lecturing will fill that God-shaped hole. If they don’t feel enough with what they have, buying more stuff will only feed that habit.

A financial adviser might ask them to cut up their credit cards, and only buy what they can afford on a monthly budget. It’s a different kind of goal. Balancing the books can be more pleasurable than buying something on impulse.

Previous studies have identified “impulsivity” among people who want to escape unhappiness and low self-esteem. This 2010 study in the “Journal of Experimental Social Psychology” found that individuals conspicuously consume to signal their wealth. They need other people to know what they have.

Other research suggests the lower your self-esteem, the more likely you will opt for flashy credit cards with higher fees. “Social image is a substitute for self-image,” these researchers wrote. “Demand for status is psychological in nature.” They found that increasing self-esteem causally reduces demand for status goods.

You can lead by example and tell this couple that you decided not to buy a new Tesla or a $30,000 bracelet because you have other priorities. You could tell them how you prefer peace of mind. But the hard truth is you can’t get people to see things your way. They are accountable for their own actions.

However, they will do what they do. You would not believe the number of letters I receive from people who sign off with a question like, “How can I get her to see this from my point of view?” Or, “How can I get him to change his ways?” You are not responsible for their current or future financial mistakes.

Your relatives’ problems are likely emotional ones as well as financial. Until they figure that out, and learn how to manage their impulses and spot patterns where they’re headed towards more financial difficulties, history will repeat itself. But it’s not your job to live their lives for them, as much as you care about their wellbeing.

See also: I don’t want to be taken advantage of’: My boyfriend moved in during the pandemic and pays me $400 a month

You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

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