8 Ways To Help Family Members In Financial Trouble

What do you do when a family member becomes unemployed? Or suffers an unexpected injury and can't work or has insufficient insurance to cover mounting medical bills? How do you respond when you learn a loved one can't pay their bills? Let's take a look at a few options you can consider to help your family members in trouble - without hurting yourself financially.

1. Give a cash gift. 
If your loved one is having a short-term cash flow problem, you may want to give an outright financial gift. Decide how much you can afford to give, without putting yourself in financial jeopardy, and then either give the maximum amount you can afford all at once (and let your loved one know that's the case) or perhaps give smaller gifts on a periodic or regular basis until the situation is resolved. Make sure it's clearly understood that the money is a gift, not a loan to be repaid, so you don't create an awkward situation for the gift recipient. If you're considering giving them a substantial sum of money, you'll need to keep an eye on the annual gift exclusion set each year by the Inland Revenue (Hasil).

2. Make a personal loan. 
Your family member may approach you and ask for a short-term loan. Talk frankly, clearly write out the terms of the loan on paper, and have both parties sign it. This helps both parties be clear on the financial arrangement they're entering into. Some loan details you'll want to include are:

• the amount of the loan
• whether the loan will be one lump-sum payment, or if it will be divided and paid out in installments upon meeting certain conditions (i.e. securing another job, paying down existing debt, etc.)
• the interest rate you will charge for making the loan and how it will be calculated (i.e. compound or simple interest)
• payment due dates (including the date of full repayment or final installment due)
• a recourse if he or she doesn't make loan payments on time or in full (i.e. increasing interest charges, ceasing any further loan payments, taking legal action, etc.)
• If you are going to lend more than $10,000 and/or you're going to charge an interest rate that is substantially different than the going rate for most borrowers, you may want to talk to a tax professional. There can be unique tax implications for low interest loans among family members.

If you're worried about potentially straining your relationship by having to administer the loan (i.e. collect payments or call when the payment is late), consider using a service, such as Prosper.com or VirginMoney.com. These companies can draw up the contracts and even collect automatic payments from your loved one's bank account. (To read more on this subject, see Outfox The Debt Collector's Hounds and Negotiating A Debt Settlement.)

3. Co-sign on a bank loan.
Your loved one may be interested in obtaining a loan or line of credit (LOC) to help with short-term financial needs but what if his or her credit requires getting a co-signer? Would you be willing to co-sign on a bank or credit union loan or LOC?

Before simply saying "yes" and essentially lending a family member your good credit, it's important to realize that there are legal and financial implications to co-signing on a loan. The most critical thing to understand is that you are legally binding yourself to repay the loan if the other borrower fails to do so. The lender can take legal action against you and require that you pay the full amount, even if you had an agreement between you and your family member that you would not have to make payments. This delinquent loan will also now affect your personal credit. So if your sister/brother/uncle fails to make payments on the loan on time and in full the lender can report the negative account activity to the credit bureaus to file on your credit report which, in turn, can lower your credit score. (Keep reading about debt and credit in The Importance Of Your Credit Rating, Debt Consolidation Made Easy and Expert Tips For Cutting Credit Card Debt.)

Co-signing a loan is serious business. The fact that your family members need a loan co-signer means that the lender considers them too great of a risk for the bank to take alone. If the bank isn't sure they'll repay the loan, what guarantees do you have that they will? It may also mean that you could have more difficulty getting a loan for yourself down the road, since you are technically taking on this loan and its payment as well.

Before co-signing for a loan, make sure you:

• Ask for a copy of your family member's credit report, credit score, and monthly budget so you'll have an accurate picture of his or her finances and ability to repay the loan.
• Meet with the lender in person (if possible) and be sure that you understand all the terms of the loan.
• Get copies of all documents related to the loan including the repayment schedule.
• Ask the lender to notify you in writing if your family member misses a payment or makes a late payment. Finding out about potential repayment problems sooner rather than later can help you take quick action and protect your own credit score.

4. Create a budget and help create a bill-paying system. 
Often, people in a financial crisis simply aren't aware where their money is going. If you have experience using a budget to manage your own money, you may be able to help your family in creating and using a budget as well. To break the ice you may want to offer to show them your budget and your bill-paying system and explain to them how it helps you make financial decisions. As you work together to help them get a handle on their financial situation, the process will point out places where they can cut back on expenses or try to increase their income to better meet their financial obligations. (To learn more, read Expert Tips For Cutting Credit Card Debt and A Guide To Debt Settlement.)

5. Provide employment. 
If you're not comfortable making a loan or giving a cash gift, consider hiring your family member to assist with needed tasks at an agreed-upon rate. This side job may go a long way towards helping them earn the money they need to pay their bills, and help you finish up any jobs that you've been putting off. Treat the arrangement like you would any other employee - spell out clearly the work that needs to be done, the deadlines and the rate of pay. Be sure to include a provision about how you'll deal with poor or incomplete work.

6. Give non-cash financial assistance. 
If you're uncomfortable or unwilling to give your family member cash, consider giving non-cash financial assistance, such as gift cards or gift certificates. You'll have more control over what your money will be used for and you can easily buy gift cards in varying amounts at most stores.

7. Prepay bills. 
You may want to consider prepaying one or more regular bills your loved one receives (i.e. rent/mortgage, utility bills, insurance premiums, etc.) to help them during their current financial crunch. Offering to do something, such as paying their car payment may help them avoid a short-term crisis and give them the little extra time they need to work out of their situation.

8. Help them find professional assistance and local resources. 
You simply may not wish or be able to provide your family member with financial assistance or hands-on help. But you can still play a key role by helping them find local professionals that can steer them in the right direction, such as:

• Career counselor and employment agencies
• Welfare agencies and similar services
• Credit and debt counselors
• Lenders who can provide short-term solutions

Conclusion
As always, the most important step is sitting down with your loved one and asking specifically what help they need to work their way out of their current situation. From there you'll have a better idea of the type of information and assistance they need. For example, if they need to make more money you could help them lookg for jobs and update their resume. If they need help repaying credit card debt, you could call local credit counseling    agencies to learn what services they offer, how much it costs and how it could benefit your family member.

Family members and money aren't always a good mix. But, in tough economic times or when faced with unexpected emergencies, your loved ones may truly need your financial assistance. Before you commit to helping, be sure to think through what you can and can't afford to do. Remember, if your own resources are limited, there are meaningful, effective, and creative ways to help your family member(s).

Some debt just seems to keep coming back, to learn how to stop it read Dawn Of The Zombie Debt.


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What if you can’t afford to save?

Even a small amount of savings can come in handy and stop you tipping into debt if things go wrong. If you are only just making ends meet, you might think you can’t afford to save, but it’s surprising how you can find small amounts here and there and they soon add up.

Loose change adds up
By the end of the week, many of us have a few coins left over in pockets and purses – and even down the back of the sofa! Gather up these odd coins each week and put them in a jar. Even just a RM1 a week in loose change will give you a cushion of over RM50 by the end of the year. Looking after the coinc really can mean the ringgit look after themselves.

Keep a spending diary
Sometimes it’s hard to know where the money goes. Try keeping a spending diary for a week or two where you write down everything you spend from the smallest stick of chewing gum to filling the tank with petrol. This will help you identify items you might be able to cut back on.

Then see how much you may be able to divert to your savings instead.

Money going up in smoke?
Review how much you spent on cigarette per day or permonth. If you’d like to kick the habit and boost your savings into the bargain, get starts now.


Don’t pay over the odds
Shop around for the best deals for your phone, internet and fuel bills and review your suppliers every year to see if you are still getting a good deal.

Save money on travel, supermarket and bills by following our Money saving tips.

Could you boost your income?
There are no simple ways to increase your income. Possible options might be take on extra work – perhaps a job you could do from home, such as childminding, or turning a hobby into a small business, selling things you make.

If you have a spare room, you might think about taking in a lodger.

Insurance Agent Never Tell You

How Much Of Your Premiums Go Towards Your Agent’s Commission?

Contrary to what many people think, life insurance doesn’t have to be complicated and expensive. Among many consumers, especially the youth, the thought of adding on financial commitments and learning up on the technical workings of insurance often times deters them from even considering the idea. These are misconceptions for two reasons: firstly, insurance agents in Malaysia generally tend to put basic life insurance coverage low on their list of priorities and push high-premium, high-commission Investment-Linked Policies (ILPs) instead. Secondly, simple life insurance, especially for those without dependents, does not require the expertise of a consultant. Here we take a look at the root of the issue, and make things simpler for you (the consumer) as they should be.

The Commission-Driven Agent

The agent, in the context of life insurance, acts as a representative to advise and educate consumers on the importance and mechanics of their products. This covers the types of life insurance, their coverage values as well as additional available options and riders that suit the consumer’s financial situation best.

Additionally, policy owners are advised on crucial details such as the surrender values of their policies, the breakdown of the premiums, along with other counsels and tips. Life insurance agents, in essence, are supposed to have technical and ethical knowledge as well as underwriting capabilities to sell policies.

Unfortunately, the reality is that in the Malaysian environment, life insurance agents are commission-driven, and do not always advise consumers on the policies that they really need. A simple look at the incentives that these agent typically earn connects the dots: 9-12% for premiums on certain ILPs, fully-paid vacations for achieving sales targets, agent recruitment bonuses, policy renewal bonuses, policy volume bonuses, the list goes on. The commission rate for life insurance policies is in the vicinity of 35%; considering the comparatively low premiums, agents usually sideline it. Even then, however, the agent’s cut would drive up the premiums one would pay. In a nutshell, misrepresentation is rife in the industry, resulting in an adverse outcome of the function of an agent.

A Simple And Yet Inexpensive Solution

The life insurance industry in Malaysia is evolving fast, largely due to the fact that our government has earmarked one of the Economic Transformation Programme’s Entry Project Points (EPP) to address the high incidence of underinsurance and uninsurance. Couple that with the propagation of user-friendly financial management platforms, as well as educational websites, and we have competitively-priced policies on easily accessible platforms emerging rapidly in the market.

One such service-provider, born from this evolution, is ‘U For Life’, which allows consumers to bypass insurance agents and purchase insurance for themselves directly online. A check by Loanstreet shows that an e-policy can be customised, reviewed and confirmed in 10 minutes, after which coverage instantly takes effect. ‘U For Life’ follows a step-up type policy, which increases in accordance with buyer's age.

Also, due to the fact that the company is purely online, incurring only essential costs, they have the competitive edge when it comes to price. Life insurance protection of RM100,000 can be purchased for a premium starting from just under RM10/month – considerably lower than if one were to purchase a policy through an agent.

On top of speed and affordability, common concerns are swiftly addressed in the form of a Q&A section, and the underwriting function of an agent is replaced by an easily understood list of questions. Payment is done promptly through credit or debit cards, followed by a confirmation to your email; and we’re left wondering why this service is only emerging now.
Conclusion

Becoming your own life insurance agent have never been easier, the benefits far outweigh the trouble of talking to several agents from several companies and ended up with expensive life insurance proposals. You’re now in better charge of your savings on premiums, stronger control over your finances, better knowledge on the subject matter, and the best of all, you don’t lose out from being dictated by inexperienced, commission-driven agents.

Read up more on the workings of life insurance from “7 Common Mistakes People Make With Life Insurance”, and once you feel confident enough, give it a try. You might just become a life insurance agent of sorts for your family and friends and spread the useful tips!

Empat Strategi Menyelesaikan Kewangan Ahli Keluarga

Membantu ahli keluarga yang bergelut dengan masalah kewangan boleh membuat keadaan menjadi serba-salah. Adalah lebih baik jangan hanya ditumpukan kepada memberi wang walaupun kita benar-benar mampu. Terlalu hebat ujiannya selain memberi ruang luas untuk syaitan memfitnah hingga memporakporandakan persaudaraan ahli keluarga.

Apabila kita berkeluarga memang pedih membiarkan mereka susah dalam hidup. Lebih pedih lagi apabila kesusahan itu boleh dielak dengan hanya sedikit ilmu tentang kewangan dan pilihan pengunaan wang yang tepat.


1.Diri ini tidak Sempurna

Kita masing-masing mempunyai kekuatan dan kelemahan. Kita mungkin utuh dari segi kewangan tetapi orang lain kukuh dari segi kesihatan. Kita mungkin tengah duduk di kerusi empuk memikirkan kedudukan kewangan saudara kita dan pada masa yang sama saudara kita mencari cara yg sesuai untuk berjumpa dengan kita mengenai masalah tersebut.

Kita rasa amat terpanggil menguruskan perkara yang kita anggap penting, tetapi tidak semesti orang lain  menganggap ianya penting walaupun pada kita ianya penting. Disebabkan tiada diantara kita yang betul-betul sempurna, kita wajib berinteraksi dengan ahli keluarga dengan kecintaan, kasihan,dan sabar. Perubaha tidak dapat dilakukan dalan satu hari.


2. Semak semula perhubungan kita dengan ahli keluarga

Semak semula siapa yang anda percaya dan siapa yang akan mendengar masalah anda. Jika perhubungan tawar maka maslaha kewangan tidak mampu diselesaikan kerana kebanyak masa kita memerlukan pihak ketiga untuk memberi idea penyelesaian.

Apabila tidak ada rasa hormat selalunya orang tidak akan mendengar masalah kita.


3. Jangan cuba selesaikan maslah kewangan dengan memberi wang

Kebanyakan masalah kewangan bukan disebabkan tidak cukup wang tetapi berpunca dari ketidakupayaan mengendalikan atau mengurus wang dan memilik mengunakan wang yang tidak tepat. Melainkan kelemahan pentadbiran kewangan telah diselesaikan, jumlah wang walaupun banyak tidak mampu membantu menyelesaikan masalah kewangan. Wajib ingat- Wang tidak boleh menyelesaikan masalah kewangan. (Baca: Total Money Makeover)

Oleh itu jika menghulurkan wang, mesti dikepilkan syarat yang membantu kearah menyelesaikan  krisis kewangan. Mereka mesti melakukan sesuatu seperti bekerja sebagai tukaran kepada bantuan. Lakukan sesuatu agar membantu menyelesaikan masalah pengurusan wang bukan saja meyelesaikan masalah kewangan


4. Harus berhati-hati jika memberi pinjaman kepada ahli keluarga

Apabila anda memberi pinjam wang kepada kawan atau keluarga, perhubungan secara otomatik akan berubah. Oleh itu mesti ada garis-panduan apabila memberi pinjaman kepada kawan atau keluarga.

Pada pengelaman saya jika seorang kawan gagal membayar pinjaman seperti yang dijanjikan maka susah untuk kita bermesra dan dalam banyak kes peminjam akan mengelakkan berjumpa dengan kita walaupun di Masjid.