Gamedad lived with us for a few months after a split from his new wife. Without going into too many details she made off with a lot of his modest pension.
During the 8 months he lived with us he paid us a couple hundred dollars in rent each month. This helped with our increased bills, but our main reasoning was for him to stay in the habit of paying bills. My husband worked out a savings plan for him so that he could accrue a bit of an emergency fund. Then he moved out.
We helped him get set up in the new place, shopping for furniture and housewares. My husband sat down with him and talked about his finances. He told him that he could take a couple hundred each month to spend, but after bills he should save the rest. His rent is about 1/3 of his pension and the rest of his bills aren't too much more. At this point he had somewhere between $4,000 to $5,000 in the bank.
Fast forward to last month. My husband finds out that their shared account is overdrawn. We go to his house to talk, which became yelling when my husband found out that he only had a few hundred left. It was a lesson in how not to spend. Lot's of cash withdrawn, infomercial products galore, and more money than anyone needs to spend at a casino. There were a few other charges made us think someone was taking advantage of him.
That night my husband took his cards. He gave him a reasonable amount of cash for the next week. In the time since we've been taking him grocery shopping (the offer had always been on the table) and giving him a bit of spending money each week.
Last week he and I sat down to draw up an official budget. We went over his income (pension), his annual expenses, and what a reasonable amount of spending money would be. I let him know that the infomercial shopping has to stop. We agreed that each month we'd deposit that amount into a new account at the bank across the street for his spending money.
We think there are some other changes that need to be made to his financial system. Currently his pension is deposited in a bank with no local branches. He also needs to get in the habit of regularly reviewing his finances. Eventually we'll also need to get him set up with an online checking account to increase the interest he earns on his savings.
Here's hoping that my financial talk will sink in.