# How can I get a spender to become a saver?



## Alexandra (Apr 3, 2009)

My little brother just asked to borrow ten thousand dollars from me in order to dig himself out of debt (he intends to pay it back, with interest, in one year). I have confidence that he will pay the money back. He has borrowed money before and is as good as his word. 

But how do I address the financial irresponsibility that led him to this point? He takes huge risks with money, he does not save when he has a windfall, and he does not agree with the concept of delayed gratification.

I know that money does not solve money problems. Behaviour change does. How do I get him to see the light?


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## Squash500 (May 16, 2009)

Alexandra said:


> My little brother just asked to borrow ten thousand dollars from me in order to dig himself out of debt (he intends to pay it back, with interest, in one year). I have confidence that he will pay the money back. He has borrowed money before and is as good as his word.
> 
> But how do I address the financial irresponsibility that led him to this point? He takes huge risks with money, he does not save when he has a windfall, and he does not agree with the concept of delayed gratification.
> 
> I know that money does not solve money problems. Behaviour change does. How do I get him to see the light?


 IMHO it's hard for people to change. If you would tell your little brother that you refuse to lend him anymore money then maybe his behaviour might change?

IMHO your brother has no incentive to change as long as you keep lending him money. However if you stop lending him money then it might cause tension in your brother/sister relationship. Who knows?

I guess it's sort of a catch 22 situation!


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## lb71 (Apr 3, 2009)

Don't lend him the money. Sometimes you need tough love. Besides, how do you expect him to pay you back in a year if he can't pay off his debts now? Maybe he needs a lesson now.

From my experience, spenders are difficult to convert. If you want to convert your brother, I would charge him a high interest rate. Some would be for you, and some would be set aside for him. Make sure he pays you monthly, so it is part of his monthly expenses. So say you lend him $10 and he repays $1k a month for a year. At the end of the year, you keep $11k and return $1 to him. Do not tell him this ahead of time, just tell him the high interest rate is to compensate for the risk you are taking. (You could tell him you don't have the money and had to borrow it.) At the end, return the $1k and say you started a saving account for him and hope he uses the experience to continue.


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## Alexandra (Apr 3, 2009)

Sadly, I am already resolved to lend him the money. I was just hoping that I could say something to him to make him see the light. I think he is a hopeless cause. At least now he can stop cycling his credit card payments (borrowing from one to pay the other). At least for awhile...I am sure that despite all his protestations to the contrary, he will find himself right back in this same situation within a year or two.

It makes me sad that my husband and I are well on the road to wealth, and my own brother will always be a penniless loser.


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## Mike H. (Apr 15, 2009)

I've found that many people exhibiting this kind scatterbrained, irresponsible financial behavior do so as a symptom of adult ADHD. They give in to any impulse for immediate self gratification; spending on credit without thinking about how to pay for it later. Did your brother show signs of ADHD as a child? ADHD kids become ADHD adults. Nobody 'grows out of it'.

You can read more about it here http://en.wikipedia.org/wiki/Adult_ADHD and here http://www.helpguide.org/mental/adhd_add_adult_symptoms.htm

Many other online resources are available, just google adult ADHD.

If your brother has an ADHD personality type, perhaps you can guide him toward realizing this and getting some treatment. I prefer to call this a personality type instead of a disorder; there are advantages to ADHD as well as disadvantages. 

I've seen people amazed and ecstatic just from taking a simple test - they finally have an explanation for lifelong problems. ADHD people tend NOT to dwell in denial as may be the case with people suffering addictions or other disorders. They seem to actively seek answers, treatment and resolution. The most reliable research shows that counselling, education, and behavior therapy are almost useless, but medication can be very effective. A person doesn't need to take medication every day, either. With time, they can learn when they need it and when they can do without it.

In my own family, (and this does run in families) I've seen night and day differences from appropriate treatment.


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## Rickson9 (Apr 9, 2009)

Alexandra said:


> I know that money does not solve money problems. Behaviour change does. How do I get him to see the light?


Selling (an idea or product) involves uncovering a need and finding a solution to address that need.

Each person has unique needs that have to be determined in order to sell them.


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## Spidey (May 11, 2009)

I agree with IB71. He has no incentive to change as long as he has people willing to bail him out.

You are not responsible for your brother. I've seen relatives fall into the same pattern that you are, and I've also fallen into it for a short time. The relatives I'm speaking of are wonderful people who've been taken advantage of all their lives. In fact, they didn't have enough money to send their own children to post-secondary education because of helping several brothers and a mother. In my case, I lent money to a friend and found out I ended up with a lot less respect than the friends who wouldn't lend. You may be setting yourself up for a life of misery unless you break this pattern.

In my opinion, its not to late to say that you've changed your mind. Perhaps if your husband is willing, you could let him be the "heavy" by saying that its causing a disagreement in your marriage (even if its not). Of course, the more honest answer would be to tell him straight that you've thought it over and decided you wouldn't be doing him any favours. If he cares about you for more than the money then he'll get over it.


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## Alexandra (Apr 3, 2009)

Mike H. said:


> I've found that many people exhibiting this kind scatterbrained, irresponsible financial behavior do so as a symptom of adult ADHD. They give in to any impulse for immediate self gratification; spending on credit without thinking about how to pay for it later. Did your brother show signs of ADHD as a child? ADHD kids become ADHD adults. Nobody 'grows out of it'.


Hmm, you may be on to something. He did show signs of it as a child, but we thought it was just symptoms of a slight learning disability (he had slight aphasia when he was born). 

I would have to broach this subject with him very carefully - I think he might get prickly about the issue.


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## furgy (Apr 20, 2009)

In my view , it's impossible to borrow to get out of debt , you're just exchanging one debt for another , and a family debt always seems to be of less importance than debt to a retail creditor you don't have any relationship with.

I think you are setting yourself and him up for some trying times ahead by lending him the money.

I think it even shows irresponsibility on his part by even asking , I know from experience , I tried it in my younger days , luckily for all , no one was willing to lend me money.

It was the best thing that ever happened to me , I learned to be responsible for my own finances and not depend on any one else.

Don't do it , you can change your mind , it's your money and you'll actually be doing him a favour.


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## Jon Chevreau (Apr 4, 2009)

Next birthday or Christmas, give him a copy of Findependence Day!

www.financialpost.com/fd


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## steve41 (Apr 18, 2009)

Or a pair of scissors. (strong enough to cut palstic)


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## leslie (May 25, 2009)

I second and third the fourth the opinions above that his problems are because of you bailing him out. Talking won't accomplish anything. And what on earth does your husband think of this?


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## STone (Apr 17, 2009)

If you do end up giving him the money, place strict conditions on the loan. Force him to cut up his credit cards and help him create a cash budget that makes him think about every purchase. Credit card use I find is "out of sight, out of mind" for most people. You think you are doing fine for the month and then you get a huge credit card bill. 
If he is not willing to do this, don't give him the loan. Your the one giving out the money and taking on all the risk. Therefore, you are the one that gets to set the rules.


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## mfd (Apr 3, 2009)

You shouldn't lend him the money. You may find yourself arguing with your brother and causing tension if you see him spending instead of paying you back. Even worse it might cause tension between yourself and your husband.

I think the situation would have been better served had you helped organize your brothers finances and get him on a budget. It requires the same amount of will power to stick to a budget as it does to not spend and pay you back. At least with a budget option you most likely won't have tension with your brother and no tension at all with your husband.


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## Lumber Joe (May 29, 2009)

Alexandra said:


> My little brother just asked to borrow ten thousand dollars from me in order to dig himself out of debt (he intends to pay it back, with interest, in one year). I have confidence that he will pay the money back. He has borrowed money before and is as good as his word.
> 
> But how do I address the financial irresponsibility that led him to this point? He takes huge risks with money, he does not save when he has a windfall, and he does not agree with the concept of delayed gratification.
> 
> I know that money does not solve money problems. Behaviour change does. How do I get him to see the light?


Maybe you should do anything and as he faces such problems several times, it will trigger him to change this behavior.


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